Speciality Restaurants - Rating: Buy; Target price: Rs165 - Centrum

We expect sales to grow by 15.7% in Q3FY14 led by new restaurant openings and price hikes taken in the month of August and December.

Operating profit will grow by 6.3% to Rs110mn. Operating margins are expected to compress by 136bps on the back of higher other expenditure as the company launched an advertisement campaign in the month of December.

Adjusted PAT is expected to decline by 7% at Rs62mn.

We maintain Buy rating on the stock and increase our target price to Rs165 (20x Dec 2015) on the back of a second menu price hike taken across restaurants along with traction in opening new restaurants.

Source : Equity Bulls

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