Burger King shares take first fall, hit 10% lower circuit after rallying 265%

The share price is still199 percent higher than the issue price of Rs 60.

Shares of the quick-service restaurant (QSR) chain Burger King India plunged 18 percent from the intraday high in the afternoon trade and closed 10 percent lower on December 17 after surging for three days.

The stock opened in the upper circuit and rose 10 percent to Rs 219.15 on the BSE, taking the four-day gains to 265 percent over its issue price of Rs 60 per share. But in the afternoon, it wiped out all its gains and was locked in 10 percent lower circuit as it closed at Rs 179.35, the first fall for the counter after its market debut.

As a result, the company’s market capitalisation also dropped to Rs 6,844.98 crore, compared to Rs 8,363.96 crore in the morning. It was, however, still higher than that of its closest peer Westlife Development's Rs 6,802.47 crore as the shares of the McDonald's operator also corrected 7 percent.

Burger King opened with a gain of 93 percent on December 14, the listing day, and closed 131 percent higher. It hit 20 percent upper circuit the following two days but the winning streak snapped on December 17.

The stock has managed to register 199 percent gains from its issue price on the back of previous three-day rally.

One of the fastest growing international QSR chains in India, Burger King India’s IPO was subscribed 157 times. The company operates 268 restaurants in 57 cities In India.

The company enjoys exclusive national master franchisee rights in India till December 31, 2039, with an obligation to develop and open at least 700 restaurants by December 31, 2026.

Westlife Development, through its wholly owned subsidiary Hardcastle Restaurants, operates 319 McDonald's restaurants in India.

In the financial year ended March 2020, Burger King reported a loss of Rs 76.6 crore on revenue of Rs 841.2 crore. Westlife Development had a profit at Rs 36.6 crore on revenue of Rs 1,547.8 crore.

At operating level, Burger King's earnings before interest, tax, depreciation and amortisation (EBITDA) stood at Rs 103.9 crore with margin at 12.4 percent, while Westlife had an EBITDA at Rs 144 crore with margin at 9.7 percent for FY20.

Westlife's same-store revenue growth strengthened 4 percent during the year FY20, whereas Burger King's same-store sales growth declined by 0.3 percent the same year.