Nifty 50 closed at 13,760.55, up 1.82 per cent for the week.
Nifty 500 closed at 11,355, up 1.64 per cent for the week.
Burger King India lists at a premium of 131%
The shares of Burger King India listed on Monday at ₹138 apiece, over its issue price of ₹60, a gain of 131 per cent. On Monday, the stock closed at ₹135. On Tuesday, the stock made another 20 per cent gain, closing at ₹162. On Wednesday, a further 20% gain took the stock price to ₹194.40. At ₹194.40, the stock is up 224 per cent from its issue price of ₹60. On Thursday, the stock declined 10% to ₹175, and on Friday another 10 per cent decline send the stock price to ₹157.50. At Friday’s close, the stock is trading at a premium of 162 per cent to its issue price. At the current market price, Burger King India has a market capitalisation of ₹6,161.81 crores.
As at September 30, 2020, the company had a net-worth of ₹218.89 crores. For the year ended March 31, 2020, total revenue from operations were ₹841.23 crores and made a loss of ₹-77.58 crores. Burger King India has reported losses in the last 3 financial years. Company hasn’t paid any dividend during the last 3 financial years.
Since there are no earnings and dividend its is not possible to value the stock based on earnings and dividends. With a net-worth of ₹218.89 crores as at Sep 30, 2020, the stock is trading at Price to book value (P/B) ratio of 28.15.
Jubilant Foodworks, another listed company in the Quick Service Restaurant (QSR) sector, trades at P/B ratio of 32.39. Jubilant Foodworks is profitable and made a profit of 280 crores in the financial year 2019-20 on sales of 3,927 crores. Nifty 50, the benchmark index of National Stock Exchange (NSE), trades has a P/B ratio of 3.89.
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CPI Inflation @ 6.93% for Nov 2020
Inflation rate, based on Consumer Price Index (CPI), came at 6.93 per cent for the month of November 2020. The data was released on Monday by National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI). The inflation rate is lower than the 7.61 per cent reported in October 2020. Food inflation, which was the major contributor to the high inflation of the last few months, also cooled though still remaining at elevated levels. Food inflation rate for November 2020 was 9.43 per cent compared to the 11.00 per cent reported for the month of October 2020.
Commodities constituting CPI is grouped into 6 groups. The 6 groups and their weights in CPI is shown in Figure 1.
As can be understood from figure 1, Food and beverages has the highest weight followed by miscellaneous group. These groups have several sub-groups. The sub-groups along with their weights in CPI is shown in Figure 2.
There are 23 sub-groups and in them 9 of them have a weightage greater than 5%. These 9 sub-groups are selected for a detailed look. They together has a weightage of 65% in CPI. Figure 3 illustrates these 9 sub-groups, their weightage in CPI, and inflation rate for each sub-group.
The RBI target rate for inflation is 4 per cent, with a range of +/-2 per cent. Among these 9 sub-groups, 5 of them have an inflation rate greater than 4 per cent. These 5 sub-groups and their values during the last 4 months are illustrated in Figure 4.
The value of the sub-groups, other than vegetables, has stabilized. In the case of vegetables, value seems stabilized in Nov 2020, even though, they have accelerated in the previous months. These values indicate inflationary pressures are not present, and inflation rate based on CPI is expected to come down in the coming months. Lower inflation gives government and central bank more flexibility in taking measures that have the potential to stimulate the economy.
Meanwhile, inflation rate based on Wholesale Price Index (WPI) for November was reported at 1.55 per cent. Inflation based on WPI was 1.32 per cent and 1.48 per cent for the month of Sep 2020 and Oct 2020 respectively.
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