Burger King represents a unique opportunity to own equity of the second largest QSR branded franchise in the world's fastest going market India. Learn how Burger King is ramping up to emerge as the fastest-growing food chain. given its fiery pace, global brand, and strong execution we believe that it presents an opportunity for multi-bagger value creation. In this webinar, we explore how any business should be analyzed to evaluate its true value. And this is the exact process taught in the Mastercourse in Equity Research and Valuation https://wa.me/message/6ALEXA634QLGK1 For the webinar replay https://youtu.be/_WX7t5fRdrM The Mastercourse is conducted bu Vinit Bolinjkar who has 29 years of experience investing and trading

1. Burger King
IPO

2. Market Size & Opportunity
◦ The Food and Beverage Industry is valued at INR 4096bn
◦ Changing consumer patterns that have seen an increase in eating out has
led to a CAGR of 9% over FY14-19
◦ QSR forms 7.5% of the overall F&B market
◦ The F&B industry is expected to post a consistent CAGR of 11% over
FY19-24

3. Investment Rationale
◦ Quick Service Restaurant (QSR) INR 307 bn, CAGR of 11% over FY19-24.
T
highly fragmented - opportunity for the shift from
unorganized to organized.
◦ CEO, Rajeev Verman 20 years of experience in the F&B industry.
Parent, QSR Asia - 18,675 restaurants across 100 countries.
◦ Strong growth visibility 700 stores by CY26 (current count of 261 stores.)

4. Investment Rationale
◦ Revenues CAGR of 17% to INR1361 by FY23
◦ number of outlets CAGR 13%
◦ improving footfalls and
◦ strong SSSG .
◦ Royalties and Ad expenses capped at around 5% of sales (current 9%) of
sales to come down sharply.
◦ Listing to boost global awareness of the brand.
◦ Part of issue proceeds is to repay total debt of INR 162.24 crores.

5. Significant operating leverage
◦ EBITDA positive by FY22 at INR 2 cr (post IND AS 116 EBITDA+ FY21 at Rs.46 cr).
◦ EBITDA margin to expand from -1.0% to 2.7% (post IND AS 116 12.4% to 15.8%) by FY23.
◦ EBIT and PAT to turnaround by FY25 to touch INR 24 cr and INR 30 cr respectively (post
IND AS 116 EBIT will turn positive in FY22 at Rs. 17 cr and PAT in FY25 at Rs.30 cr).
◦ Accumulated losses provide tax break till FY27.
◦ Negative working capital of 69 crores improve to negative 246 crores.
As a prudent measure Burger King will be maintaining a cash balance equal to the negative
working capital on its books.
FY19 FY20 FY21E FY22E FY23E FY24E FY25E
CFO 23.4 35.2 -41.0 154.2 123.8 188.1 245.4
CFO/EBITDA -2.3 -4.1 0.5 78.7 3.3 2.1 1.5

6. Valuation
At the CMP of Rs.60,
Burger King 1.5X FY23 EV/Sales basis (on the fully diluted equity).
Jubilant FoodWorks 5.7X FY23 EV/Sales and
Westlife Development 3.5X FY23 EV/Sales
Recommend a subscribe for both listing gains and long-term investing.

7. DCF Valuation
◦ Considered the beta of Westside Development to calculate the unlevered beta of Burger
King, which came at 0.89X
◦ Used CAPM method to calculate Cost of Equity, which would also be used as WACC due
to repayment of entire debt by the company by the end of FY21
◦ At terminal value growth of 5%, the per share intrinsic value of the stock is Rs.87
Fig in Rs Cr FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30
NOPLAT -71.6 -53.6 -20.8 18.0 68.4 134.1 217.0 319.0 442.0
FCFF -38.3 -93.7 -71.1 -16.0 39.7 110.3 197.5 302.8 427.9
Discount Factor* 0.90 0.81 0.72 0.65 0.58 0.53 0.47 0.42 0.38
Discounted FCFF -34.4 -75.6 -51.5 -10.4 23.2 57.9 93.1 128.3 162.8
* Discount Rate of 11.3%

8. Leadership Team
Rajeev
Verman
CEO & Whole
Time Director
20 yrs in F&B
Industry, Taco Bell,
Lal enterprises &
Burger King
Sumit Zaveri
CFO
Natures Basket,
Tata Starbucks,
Tata Global
Beverages, Indian
Hotels
Prashant
Desai
Strategy and IR
officer
63 Moons
Technology Ltd
Abhishek
Gupta
Chief of Business
Development &
Operations
Support Officer
Tata Starbucks,
Tata Services,
Indian Hotels,
Career Forum,
North Delhi
Power
Namrata
Tiwari
Chief People
Officer
Kaya, Marico,
Pfizer, Mahindra
British Telecom,
Toyo Engineering
Srinivas
Adapa
Marketing Officer
Kellogg

9. Board of Directors
Shivakumar
Pullaya Dega
Chairman &
Independent
Director
Previous
chairman and
CEO of
PepsiCo India,
MD of Nokia
India
Rajeev
Verman
CEO & Whole
Time Director
20 yrs in F&B
Industry,
experience in
Taco Bell, Lal
enterprises and
Burger King
Corporation
Ajay Kaul
Non-
Executive
Director
Previous CEO
and Whole
Time Director
of Jubilant
Food Works
Amit
Manocha
Non-
Executive
Director
MD at
Everstone
Capital
Jaspal Singh
Sabharwal
Non-
Executive
Director
Previous
partner at
Everstone
Capital and 10
years
experience in
Coca-Cola
Peter Perdue
Non-
Executive
Director
Joined
Resturant
Brand
International
in 2013
Sandeep
Chaudhary
Independent
Director
17 years in
Aon
Consulting
Pvt. Ltd. And
was CEO for
5 years
Tara
Subramaniu
m
Independent
Director
34 years in
banking, real
estate, project
financing and
business
development

10. Strategy
◦ Own supply chain right from scratch so that they don’t have to pay a premium to the already
established players
◦ Tailored product offerings, pricing and promotions to Indian tastes & preferences
◦ Favourable royalty fees (<5% of sales) and advertising fees (< 5% of sales going ahead)
◦ National master franchisee & enjoys exclusive Pan India rights
◦ Fastest to scale up in terms of reaching 200 outlets in the country
◦ Cluster Approach – 6 clusters. To launch flagship stores in new locations with high impact and
visibility
◦ Globally a premium brand. In India value brand - value range priced below Rs.100 & premium range
above Rs.149
◦ Capital raise rightly timed given buoyancy in capital markets. Listing on the stock exchanges to boost
awareness of the brand.
◦ Softness in Real Estate market coupled with ability to lock in long term rentals at depressed prices to
cushion margins.

11. Promoter Holding Pre IPO
BK Asiapac Pte. Ltd.
(10.38%)
QSR Asia Pte. Ltd.
(Singapore) (94.34%)
Burger King India Ltd
Others (1.97%)
F&B Asia Vetures
(Singapore) Pte. Ltd.
(87.64%)

12. Ownership Pattern
Burger King
Promoters
(94.3%)
Institutions
(5.66%)
Burger King
Promoters
(60.08%)
Institutions and
Public (39.92%)
Pre IPO Post IPO

13. Issue Details
• Fresh Issue – Rs.4500 mn
• Offer for Sale – Rs.60mn
Offer Details
• Repayment of o/s borrowings
• Capital expenditure for setting up new
resturants
• General corporate purposes
Net Proceeds of Fresh Issue to
be Utilized in
• Rs.59-60/share
Price Band
• 250 Equity shares and in multiples of 250 thereafter
and capped at 3250
Bid Lot
• Anchor book – December 1
• Offer opens – December 2
• Offer Closes – December 4
Offer Period
• QIBs >= 75%
• Anchor Investor <= 60% of QIB portion
• NII <= 15% of net offer
• RIIs <= 10% of net offer
Offer Structure

14. Number of Outlets
726
476
369
328
876
476
369 352
12
1026
568
393
310
49
1127
613
424
310
88
1134
638
447
342
129
1227
638
464
380
187
1335
671
489
443
260
0
200
400
600
800
1000
1200
1400
1600
Domino's CAGR 11% Subway CAGR 6% Mc Donald's CAGR 5% KFC CAGR 5% Burger King CAGR 85%
FY14 FY15 FY16 FY17 FY18 FY19 FY20

15. Number of Additional Outlets
0
24
31
23
17
2524
-42
0
32
38
63
0
92
45
25
0
33
160 160
101
7
93
108
12
37 39 41
58
73
-100
-50
0
50
100
150
200
FY15 FY16 FY17 FY18 FY19 FY20
McDonalds KFC Subway Domino's Burger King

16. Region wise percentage of total outlets
32
29
2
37
31
40
14
15
35
29
7
29
31
30
11
28
47
24
1
28
0
5
10
15
20
25
30
35
40
45
50
North South East West
McDonalds KFC Subway Domino's Burger King

17. Revenue Growth
24.4
8.3
1.4
25.6
9.3
2.3
30.4
11.3
3.8
36.1
14.0
6.2
38.8
15.4
8.4
34.165
10.899
5.7
47.332
16.469
10.71
54.2
18.933
13.61
0
10
20
30
40
50
60
Domino's CAGR 12% Westlife CAGR 17% Burger King CAGR 38.4%
2016 2017 2018 2019 2020 2021E 2022E 2023E

18. Revenue/Store
3
4.1
2.9
3
4.74
3.4
3
4.85
3.2
0
1
2
3
4
5
6
Jubilant CAGR 0% Westlife CAGR 9% Burger King CAGR 5%
FY18 FY19 FY20

19. Presence of Key International Brands by
Outlets in India as of September 30, 2020
490 454
541
1354
261
90 70 97
282
570
200
400
600
800
1000
1200
1400
1600
Mc Donald's KFC Subway Domino's Burger King
Total Outlets No. of Cities

20. Same Store Sales Growth (%)
0.05
3.2
-2.4
13.9
16.4
3.2
-5.9
1.8
4
15.7
17.4
4
-5
-13
9.5
19.5
0 00 0 0
12.2
29.2
-0.3
-20
-15
-10
-5
0
5
10
15
20
25
30
35
FY15 FY16 FY17 FY18 FY19 FY20
Domino's Westlife Yum Burger King

21. Product Offerings and Pricing
19
4
19
5
29
19
81
19
3 3
33
7
0
10
20
30
40
50
60
70
80
90
No. of burger varieties No of beverage varieties No. of meal options No. of side options
Burger King Mc Donald's KFC
127
98
225
92
149
173
300
158
170 177
392
147
0
50
100
150
200
250
300
350
400
450
Average burger price Average beverage price Average meal option
price
Average sales option
pricing
Burger King Mc Donald's KFC

22. Cost Break-Up
1050 25791276 4402963 6431328 3051 850
-20%
0%
20%
40%
60%
80%
100%
120%
FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20
Westlife Jubilant Burger King
Cost Break-Up
RM Cost Royalty Cost Other Costs Advertising & Promotional Costs EmployeeCost

23. Burger King – Story in Charts
-35.0%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
-400.0
-200.0
0.0
200.0
400.0
600.0
800.0
1,000.0
FY18 FY19 FY20 FY21E FY22E FY23E
Gross Profit EBITDA EBIT PAT ROE ROCE

24. Burger King – Story in Charts
-20.00
-10.00
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
-300.0
-250.0
-200.0
-150.0
-100.0
-50.0
0.0
50.0
100.0
FY18 FY19 FY20 FY21E FY22E FY23E
Cash Operating Profit Working Capital CFO as a % of EBITDA

25. Figures in Rs Cr FY19 FY20 FY21E FY22E FY23E FY19 FY20 FY21E FY22E FY23E
Income Statement Per Share Data & Yields
Store Count 187 260 270 315 377 Adjusted EPS (Rs) -1.0 -2.0 -3.9 -1.5 -1.0
Revenue per Store 3.4 3.2 2.1 3.4 3.6 Adj Cash EPS (Rs) 0.0 -0.4 -2.2 0.5 1.5
Revenue 632.7 841.2 567.2 1,071.0 1,361.3 Adj Book Value per share (Rs) 6.5 7.2 16.6 15.1 14.1
YoY Growth (%) 67.3 33.0 -32.6 88.8 27.1 CFO Yield (%) 1.0 1.5 -1.8 6.7 5.4
Raw Material Cost 230.1 301.5 204.2 382.9 483.3 FCF Yield (%) -7.1 -9.6 -2.8 -1.9 -4.3
YoY Growth (%) 59.9 31.0 -32.3 87.5 26.2
Gross Profit 402.7 539.7 363.0 688.1 878.0 Solvency Ratios (X)
Margin (%) 63.6 64.2 64.0 64.3 64.5 Total Debt to Equity 0.4 0.7 0.0 0.0 0.0
Operating Expenses 412.7 548.4 449.8 686.2 841.0 Net Debt to Equity 0.2 0.6 -0.5 -0.6 -0.6
YoY Growth (%) 39.4 32.9 -18.0 52.6 22.6 Net Debt to EBITDA -4.5 -17.6 3.6 -175.9 -8.1
EBITDA -10.0 -8.6 -86.8 2.0 37.0 Interest Coverage Ratio -198.8 -10.2 -10.1 0.0 0.0
Margin (%) -1.6 -1.0 -15.3 0.2 2.7
Depreciation 39.5 62.3 65.3 78.3 95.7 Working Capital Ratios
Depreciation to Gross Block (%) 8.9 10.0 10.0 10.0 10.0 Payable Days 35 35 83 75 70
EBIT -49.5 -70.9 -152.0 -76.4 -58.7 Receivable Days 3 1 1 1 1
Margin (%) -7.8 -8.4 -26.8 -7.1 -4.3 Inventory Days 4 4 3 3 3
Other Income 11.4 5.6 20.0 18.7 20.4 Gross Working Capital Days 7 5 4 4 4
Finance Cost 0.2 6.9 15.1 0.0 0.0 Net Working Capital Days -28 -30 -79 -71 -66
Exceptional Item 0.0 4.3 2.1 0.0 0.0
PBT -38.3 -76.6 -149.3 -57.6 -38.3 Return Ratios (%)
Margin (%) -6.1 -9.1 -26.3 -5.4 -2.8 Return on Equity -15.5 -28.2 -23.5 -10.0 -7.1
Reported Tax 0.3 1.0 0.0 0.0 0.0 Return on Capital Employed -14.2 -15.0 -24.0 -13.2 -10.9
PAT -38.6 -77.6 -149.3 -57.6 -38.3 Return on Invested Capital -16.8 -16.6 -47.2 -32.9 -24.7
Margin (%) -6.1 -9.2 -26.3 -5.4 -2.8
Valuation (X)
Balance Sheet P/BV 9.2 8.3 3.6 4.0 4.3
Share Capital 265.0 277.7 381.7 381.7 381.7 EV/Sales 3.7 2.9 3.5 1.8 1.5
Total Reserves -15.4 -2.3 252.6 195.0 156.6
Shareholders' Fund 249.6 275.4 634.2 576.6 538.3 Cash Flow Statement
Long Term Borrowings 0.0 178.8 0.0 0.0 0.0 Profit Before Tax -38.3 -76.6 -149.3 -57.6 -38.3
Long Term Provisions 5.2 18.7 14.8 21.6 26.4 Adjustments 49.5 92.0 54.4 126.3 124.4
Other Long Term Liabilities 45.6 60.6 40.9 77.2 98.1 Change in Working Capital 12.5 20.8 53.8 85.6 37.8
Total Liabilities 300.4 533.6 689.9 675.4 662.8 Less: Tax Paid -0.3 -1.0 0.0 0.0 0.0
Gross Block 441.7 622.7 652.7 783.2 956.8 Cash Flow from Operations 23.4 35.2 -41.0 154.3 123.8
Less: Accumulated Depreciation 94.4 148.5 213.7 292.0 387.7 Capital Expenditure -165.4 -227.5 -30.0 -130.5 -173.6
Net Block 347.3 474.2 439.0 491.1 569.1 Change in Investments -49.1 112.8 -140.4 9.2 105.3
Capital WIP 20.2 47.6 0.0 0.0 0.0 Cash Flow from Investing -214.5 -114.7 -170.4 -121.3 -68.3
Intangible Assets 15.8 24.5 25.5 25.5 25.5 Change in Borrowings 100.0 98.5 -198.5 0.0 0.0
Loans & Advances 21.3 29.1 29.6 29.6 29.6 Less: Finance Cost -0.2 -6.9 -15.1 0.0 0.0
Other Non Current Financial Assets 0.1 0.1 0.0 0.0 0.0 Proceeds from Issue of Equity 100.0 0.0 508.1 0.0 0.0
Income Tax Assets 0.8 1.0 0.2 0.2 0.2 Cash Flow from Financing 199.8 91.6 294.5 0.0 0.0
Other Non Current Assets 3.9 3.3 3.3 3.3 3.3 Net Cash Flow 8.6 12.0 83.1 33.0 55.5
Net Current Assets -109.1 -46.3 192.2 125.5 34.9 Opening Balance of Cash 7.4 16.0 28.0 111.8 144.8
Total Assets 300.4 533.6 689.9 675.4 662.8 Closing Balance of Cash 16.0 28.0 111.1 144.8 200.3