The F&B food-service industry provides both direct and indirect employment to millions of Indians. Latest industry estimates place direct employment at 5 million workers. The industry also makes a significant contribution in terms of tax revenue to the government. It currently contributes $220 million to government coffers, which has the potential to reach $770 million, according to industry analysts. According to the National Restaurant Association of India (NRAI), the F&B foodservice industry is growing at a rate of 5-6% per annum with revenues amounting to $8.6 billion.
Galaxy Entertainment is a concept stock from my side. There is nothing to suggest that the company should be trading in a multibagger perspective. But, yes, if someone takes a call on the core business, I feel this is one lifestyle product that should be part of one's portfolio. Pantaloon, at one point in time was available close to Rs 50-60 and it became a true multibagger.
Now the same promoter of that group is actually promoting this particular stock which was bought back in 2007 by other promoters of the company. The firm changed submits mid 2007; one of the biggest and most experienced sorted out retailing chains, Pantaloon, purchased 15.73% stake in it(now it holds around 31% stake).It additionally amalgamated Pan India Restaurants with itself which had nourishment courts. Pantaloons is by Future Retail group ( Biyani Family ). Mumbai-based land firm Phoenix Mills holds a 34 percent stake in Galaxy.
( Kishore Biyani from Future Group )
Galaxy Entertainment Corporation(GECL), a public limited company is India's premier professionaly managed leisure and entertainment organisation. It operates South Asia's largest state of the art premium family entertainment centre. This entertainment centre at Mumbai comprises Bowling and other game facility, bars and banquet halls. The company owns Sports Bar, along with 38 resto-bars across the country.
SBX: The Company continues to enjoy the premium brand equity with SBX, as the expansion plan is on track and efforts to innovate and delight consumers continue. The Company continues to focus on increasing its reach geographically and tapping new areas with high potential.
Food Stop: The Food courts still play the role of mini anchor tenant in a mall. As shopping malls evolved, so did food courts. The latest designs are geared towards entertainment, relaxation and leisurely dining. As a result, people of all age now go to malls specifically for what food courts offer. Out of the total spend of any family shopping basket, the total spending on eating out has gone up significantly.
Shanghai Street: The Chinese QSR format has been a success with people of all ages. Low cost setup is an added advantage and offers faster roll out of the model.
Punjabi Adda: The Punjabi and North India food counter model designed for the food courts are tasting success across all the locations that they are being operated.
Cmp 22
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Buy Kitex Garments around 510, its base low. ( Results announced very early, much before the rest which is a positive sign of a good result )
At CMP of Rs.516.25, KGL is trading at 14.2x its FY16E EPS of Rs.38.3 which is at an attractive valuation (PEG of 0.3x only). With 25% sales CAGR (FY15E- FY18E), debt free status by FY18E, strong margin improvement (1000 basis points by FY18E) with sales from its own brand and licensing of private labels and strong return ratios (50% plus roe and 40% ROCE), We expect stock to trade at 20x its FY16E EPS of Rs.38.3. I assign a BUY rating on the stock with a price target of 700+ in next few weeks which is more than 40% upside from current levels.
Galaxy Entertainment is a concept stock from my side. There is nothing to suggest that the company should be trading in a multibagger perspective. But, yes, if someone takes a call on the core business, I feel this is one lifestyle product that should be part of one's portfolio. Pantaloon, at one point in time was available close to Rs 50-60 and it became a true multibagger.
Now the same promoter of that group is actually promoting this particular stock which was bought back in 2007 by other promoters of the company. The firm changed submits mid 2007; one of the biggest and most experienced sorted out retailing chains, Pantaloon, purchased 15.73% stake in it(now it holds around 31% stake).It additionally amalgamated Pan India Restaurants with itself which had nourishment courts. Pantaloons is by Future Retail group ( Biyani Family ). Mumbai-based land firm Phoenix Mills holds a 34 percent stake in Galaxy.
( Kishore Biyani from Future Group )
Galaxy Entertainment Corporation(GECL), a public limited company is India's premier professionaly managed leisure and entertainment organisation. It operates South Asia's largest state of the art premium family entertainment centre. This entertainment centre at Mumbai comprises Bowling and other game facility, bars and banquet halls. The company owns Sports Bar, along with 38 resto-bars across the country.
Food Stop: The Food courts still play the role of mini anchor tenant in a mall. As shopping malls evolved, so did food courts. The latest designs are geared towards entertainment, relaxation and leisurely dining. As a result, people of all age now go to malls specifically for what food courts offer. Out of the total spend of any family shopping basket, the total spending on eating out has gone up significantly.
Shanghai Street: The Chinese QSR format has been a success with people of all ages. Low cost setup is an added advantage and offers faster roll out of the model.
Punjabi Adda: The Punjabi and North India food counter model designed for the food courts are tasting success across all the locations that they are being operated.
On words of Sunil Biyani:"The Indian food service industry is growing on the back of increasing income and changes in food consumption pattern.Besides, food courts are driving this industry as malls are expanding to smaller towns.Food-courts play the role of anchor tenant in a mall. Along with complimenting businesses such as books, games, fine dining restaurants and movies,they provide good recreational space to the customers.However, there is a huge vacuum and the latest offerings are geared towards entertainment, relaxation and leisure dining. We plan to open 22-24 food-courts this fiscal at an investment of 10 crore".It currently runs 11 food courts, and has tie-ups with various malls to operate and manage food outlets through a minimum-guarantee-plus-revenue-sharing model.
I was looking at it from a US economy perspective where these kinds of lifestyle sports bar businesses actually become multibaggers both in the US, UK and in Australia. There is nothing to suggest as of now to buy the stock from a short-term perspective. The stock can bore the investor for another one-two years but this is one stock which we would be definitely looking at because Pantaloon promotes the company and they will definitely chalk out some good plans.
If I see the Phoenix Mills property arrangement that they have got with the Ruia?s, all the future expansion will come to Galaxy Entertainment. Thus, this is one stock, which will definitely hog the limelight. I was just looking at their projection in terms of percentage to the total lifestyle business that the company can get. Even if I mark through a 4.5-5% potential for the company in the next five-six years, the stock can easily trade Rs 400-500 but that is a longer-term call.
So the scaling up of business is occurring at a fast speed.Its citing at a mcap of only 46crs.The organization's business of gaming and restaurants contributed 17crs on last fiscal.So around 2.7x of its trailing revenues.We are discussing a business with a lot of edge of safety.Valuation savvy too,at 2.7x trailing incomes ,in examination to the aforementioned deals,sounds really cheap.Scaling up of business with family of Biyani,nearly zero obligation organization with high negative working capital and heaps of money streams makes it a fascinating purchase at present levels.There's no recorded tantamount peer,hardly any coasting stock to discuss too.Even above normal numbers can make the stock move truly high.
Galaxy Entertainment is one stock, where I feel that the stock can easily trade in that Rs35-40 mark currently but if someone actually looks into the prospects of the business this is a true multibagger from a very longer-term perspective.
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Buy Kitex Garments around 510, its base low. ( Results announced very early, much before the rest which is a positive sign of a good result )
At CMP of Rs.516.25, KGL is trading at 14.2x its FY16E EPS of Rs.38.3 which is at an attractive valuation (PEG of 0.3x only). With 25% sales CAGR (FY15E- FY18E), debt free status by FY18E, strong margin improvement (1000 basis points by FY18E) with sales from its own brand and licensing of private labels and strong return ratios (50% plus roe and 40% ROCE), We expect stock to trade at 20x its FY16E EPS of Rs.38.3. I assign a BUY rating on the stock with a price target of 700+ in next few weeks which is more than 40% upside from current levels.
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