Neutral Westlife Development Ltd : Second wave restrictions lead to temporary overhang - Motilal Oswal
![](https://portfolio.investmentguruindia.com/investmentguruimages/upload/post/2021/04/8a52124face92e5c78fc5bb828a65cdc.jpg)
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
Second wave restrictions lead to temporary overhang
Structural opportunity intact
* Amid the rising second wave of COVID cases, Maharashtra has imposed stringent restrictions from 5th to 30th Apr’21. Accordingly, restaurant players have been directed to stop dine-ins, though deliveries are permitted 24x7. This offers some respite, especially for QSR players, which depend heavily on the channel.
* On account of the high delivery salience and best practices in hygiene and safety, QSRs are better placed vis-à-vis other formats. 50% of Westlife Development (WLDL)’s sales come from convenience channels (delivery, drive-thru, and on-the-go).
* Of the count of 304 stores as of Dec’20, we estimate ~140 of WLDL’s stores in Maharashtra (46% of total stores). Hence, the state-wide restrictions could put pressure on a significant portion of WLDL’s store network.
* We estimate the restrictions in Maharashtra to impact WLDL’s FY22E sales by 1.1–1.8%. We cut our FY22E sales estimates by 1.5% which leads to a ~12% cut in our PAT estimates for the year. We maintain our FY23E estimates.
* Further risks cannot be ruled out yet in case the curve of COVID cases isn’t flattened. These include: a) restrictions being imposed in other states, and b) restrictions being extended beyond 30th Apr’21.
* The vaccination drive offers hope that the situation may not extend beyond 30th Apr’21.
* While the current scenario poses short-term pain, the attractive structural opportunity for WLDL remains intact. We had indicated our caution on WLDL in our initiating coverage note in Dec’20 – due to near-term uncertainties and delayed recovery in the dine-in channel. Maintain Neutral.
To Read Complete Report & Disclaimer Click Here
For More Motilal Oswal Securities Ltd Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html SEBI Registration number is INH000000412
Above views are of the author and not of the website kindly read disclaimer
![](https://portfolio.investmentguruindia.com/uploads/news/Nilesh Shah, Managing Director at Kotak Mahindra Asset Management Co. Ltd.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Mining Sector_438.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/IPO 6.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/yes bank_78.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Gv_Couple_Tourism.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Shiping_123.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/real estate 25.01.2024.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Amara Raja Batteries Ltd.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Signature 2.jpg)
![](https://portfolio.investmentguruindia.com/uploads/news/Amara Raja Batteries Ltd.jpg)
More News
![](https://portfolio.investmentguruindia.com/investmentguruimages/upload/post/2021/05/f7c7e666eb6ca8c9edc05b33fde4bce7.jpg)
Large Cap : Buy Titan Company Ltd For Target Rs.1,660 - Geojit Financial
![Orient Electric Ltd : B2C business continues strong growth momentum with market share gains; maintain ADD - Yes Securities](https://portfolio.investmentguruindia.com/investmentguruimages/upload/post/2021/08/407e434b2fe7a81c4d8bcf1ff50a5c81.jpg)
![National Aluminium Company Ltd : Strong quarter but outlook remains weak; maintain Sell - Emkay Global](https://portfolio.investmentguruindia.com/investmentguruimages/upload/post/2021/02/f4c10cb3feb6b5fce8777b5fb777bc30.jpg)
![Nestle India Ltd : Sustained share of new products, increasing rural focus - Motilal Oswal](https://portfolio.investmentguruindia.com/investmentguruimages/upload/post/2021/03/57becfeab961dcb7e5cbf934d9a9d4c8.jpg)