We are very positive on the QSR segment and both Burger King as well as Westlife Development which runs the McDonald’s chain, says Daljeet Singh Kohli, CIO, Stockaxis.com.
The Rs 810-crore Burger King IPO is going to list today. There has been a massive response to the IPO. What do you think of the company, its peers and the QSR segment?
We are very positive on this segment as such. In our portfolios, we already have Westlife Development. It is a competitor of Burger King and runs the McDonald’s chain. Burger Kings had priced the IPO very attractively plus the timing was in their favour. At this time people are in a mood to take on risk because markets are at peak and Everybody is in the mood to join the party. That is why they have got such a good response and the pricing also was quite attractive.
In terms of fundamentals, both the companies are equally good. We have had a positive view on Westlife for a very long time and on traditional parameters of valuations, you will find all these companies to be costly but one has to see what kind of numbers they can generate over a period of time. The next three years’, five years’ outlooks should be looked at. We are positive on both the stocks.
Staples rebounded last week. Do you see any opportunity there?
We have a positive view on most of these companies because one, they are normally priced to perfection and so they do not give too much comfort on the valuation. Second, the appreciation in other stocks is normally relatively better. One tends to prefer the other sectors or other stocks but if somebody wants a conservative portfolio, these are all good stocks and one should continue. Within these staples, Unilever and Nestle are the two preferred picks. We have been avoiding ITC for quite some time although in the last few days, it has performed. But Unilever and Nestle both have shown much better capital efficiency, much better market resilience than what ITC even though the later ITC has always traded at much lower valuation. Our preference has been Unilever and Nestle and we continue with that.
