Burger King’s IPO of Rs 810 crore will be listed 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 in this segment as such. In our portfolios, we already have Westlife Development. He is a competitor to Burger King and runs the McDonald’s chain. Burger Kings had set a very attractive price for the IPO and the timing was in their favor. Right now, people are in the mood to take risks because the markets are raging and everyone is in the mood to join the party. That is why they have had such a good response and the price was also quite attractive.
In terms of fundamentals, both companies are equally good. We have had a positive view of Westlife for a long time and on traditional valuation parameters, you will find that all of these companies are expensive, but you have to see what kind of numbers they can generate over a period of time. The prospects for the next three to five years should be examined. We are positive in both actions.
Staples were recovered last week. Do you see any opportunity there?
We have a positive opinion of most of these companies because, one, they usually have a perfect price and therefore do not give much comfort in the valuation. Second, the appreciation of other stocks is usually relatively better. One tends to prefer the other sectors or other stocks, but if someone wants a conservative portfolio, these are all good stocks and should continue. Within these commodities, Unilever and Nestlé are the two preferred options. We have been avoiding ITC for quite some time, although in the last few days it has worked. But Unilever and Nestlé have shown much better capital efficiency, much better market resilience than ITC, even though the subsequent ITC has always traded much lower valuation. Our preference has been Unilever and Nestlé and we continue with that.
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