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Barbeque Nation is India’s leading casual dining restaurant (CDR) chains (in terms of outlet count as of September 30, 2020), and International Barbeque Nation Restaurants. Company own and operate Toscano Restaurants and UBQ by Barbeque Nation Restaurant. Company has launched its first Barbeque Nation Restaurant in 2008, and subsequently acquired five Barbeque Nation Restaurants owned by SHL (Sayaji Hotels Ltd) in 2012. As of December 31, 2020, Barbeque Nation Restaurant network has reached to 147 Restaurants chain across 77 cities in India and six International Barbeque Nation Restaurants in three countries outside India.

Positives:

(a) Barbeque Nation is one of India’s fastest growing and widely recognized restaurant brands in the rapidly growing CDR Market (b) Attractive offerings based on constant menu innovation and customer focus. (c) Strong business processes and back-end systems leading to efficient operations (d) Experienced staff and value-oriented business culture led by some of Promoters and senior management team bringing experience from well-known hospitality brands.

Investment concerns:

(a) The outbreak of COVID-19 pandemic, as well as GoI measures to reduce the spread of, have had a substantial impact on restaurant operations. (b) Deterioration in the performance of, or relationships with, thirdparty delivery aggregators, may adversely affect business. (c) Failure in implementing growth strategy including in relation to selecting cities and locations for new restaurants etc. (d) Unable to continue & build the Barbeque Nation brand or the Toscano brand, business, reputation and results of operations may be adversely affected.

Outlook & Valuation:

While the company has posted revenue growth of 20% CAGR between FY18-FY20 it has been continuously incurring losses at PAT level despite topline growth. The Covid-19 pandemic too has had an adverse impact on the operations of the company hence we expect profits will remain under pressure over the medium term. At the higher end of the price band the company is asking for a valuation of 2.4x FY20 EV/Sales which we believe is expensive given the current environment and hence we recommend a "NEUTRAL" rating to the IPO.

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SEBI Registration number is INH000000164

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