BE FINANCIALLY INDEPENDENT
Looks better to stay away from QSR companies like Sapphire, Devyani, Zomato, Jubilant food
Dated 25-feb-23
Dated 25Apr-23 –Decision paid off well –even in the recent rally , these stocks did not run
Time is coming to accumulate slowly after one correction
The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that
Sapphire foods IPO-Sapphire Foods India is YUM brand’s largest franchise operator in the Indian subcontinent in terms of revenue as of FY’20. It is also Sri Lanka’s largest international QSR chain in terms of revenue for FY’ 2021 and the number of restaurants operated as of March 31, 2021. .
Business — Company owned and operated 204 KFC restaurants in India and the Maldives, 231 Pizza Hut restaurants in India, Sri Lanka and the Maldives, and 2 Taco Bell restaurants in Sri Lanka.The company has an in-house supply chain function and works with vendor partners for food ingredients, packaging, warehousing, and logistics. The company operates warehouses across 5 Indian cities and has invested in building technology solutions in their restaurants. The company operates its restaurants at high traffic and high visibility locations in key metropolitan areas and cities across India and develop new restaurants in new cities as part of its expansion strategy.
Region of Operation -It serves clients in India and Srilanka with KFC, Pizza hut and Taco bell outlets
Offer purpose — The IPO comprises a complete offer for sale of 2000 cr. Proceeds will not go company
Risks —
Decreasing revenues from same stores
Operating losses continuing
High competition
Strength
One of India’s largest restaurant franchisee operators and Sri Lanka’s largest international QSR chain
YUM’s largest franchise operator in the Indian subcontinent in terms of revenue
Focus on delivering excellent customer experience
Quality control and operational excellence
Scalable business model
Experienced management team with robust corporate governance practices.
Future
Company has been working to reduce costs on multiple fronts like store size etc which is yet to show up in financials. Similarly Increasing delivery revenues and opening new stores, driving same store sales growth is a work in progress. Model is scalable and with demographic advantage, it should be able to sustain and turnaround over a long period
Valuations
Valuations are comparable to peers and lower wrt some peers in this bull marlet. Looking in isolation, valuations are not attractive though
Should we apply?
Long term investors need to wait and watch company progress before investing.
Risk takers can apply for IPO and exit on listing gains if any
In case you have any questions/ queries, please feel free to reach me through Contact Form
Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.
The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that
Devyani Internationals Limited IPO-“DIL” is the largest franchisee of Yum Brands in India and is amongst the largest operators of chain quick service restaurants in India and are among the largest operators of chain quick service restaurants (“QSR”) in India on a non-exclusive basis. DIL is also a franchisee of the Costa Coffee brand in India, which is owned by Costa,
Business — DIL’s business is broadly classified into three verticals that includes stores of KFC, Pizza Hut and Costa Coffee operated in India (KFC, Pizza Hut and Costa Coffee referred to as “Core Brands”, stores operated outside India primarily comprising KFC and Pizza Hut stores operated in Nepal and Nigeria (“International Business”); and certain other operations in the F&B industry, including stores of our own brands such as Vaango and Food Street
Region of operation — Major cities in India and in Nepal, Nigeria
Offer purpose — The IPO is issuance of shares worth ₹1838 crore for debt clearance and general corporate purposes.
Risks —
Termination of or inability to renew long term contracts with brands
Loss making company
High and intense competition in QSR space
Outstanding litigation proceedings against the Company, Subsidiaries, Directors, and Promoters
Strength
Presence across key consumption markets
Highly recognized global brands catering to a range of customer preferences
Multi-dimensional comprehensive QSR player
Future
The quick-service restaurant channel has been rapidly growing in popularity in India, owing to factors such as rise in literacy, exposure to media, increase in disposable incomes, and easier and greater availability. Affordability has also been a key factor.
Valuations
Valuations are high and bit lesser than peers
Should we apply?
People can subscribe only for listing gains. Sell on listing day
Also Read
Burger King IPO crisp Summary — Listing with huge gains as shared
CAMS IPO crisp summary — Listed with 20% gains as shared
Happiest Minds IPO crisp summary –Listed with substantial gains as shared
In case you have any questions/ queries, please feel free to reach me through Contact Form
Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.
Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.
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