Why Mc Donald’s is our top holding ??
How could anyone get wrong with this?
Westlife development is the franchise for McDonald’s in India (West and South )
- Westlife Development is the franchise of Mac Donald’s for West and south region.
- 232 stores are already there and expected to be doubled in in next five years.
World average margin for net profits is 6%.
- India has the second highest population in the word (130 Crore ) and it’s like you can have a McDonald every 100 Kms.
- Driveway concept is still very new here and will be flourishing with time.We are 5 years behind the USA.
- MC Donald spends Millions of dollars on research to keep people hooked to their burgers, and once you ar hooked you are a customer of a lifetime. Westlife has to pay 4% per annum for this Research.
Valuations — (@ 175 when we loaded it )2300 crore market capitalization and Sales are expected to touch 1000 cr in Fy 2016-17.
We at Shikhar capita always wanted to buy a business which we believe will be doing fantastically well even 30 years from now. Mc Donalds, with the brand name and worldwide recognition and with such a small presence has brought us with this opportunity. Just go to any Mc Donald’s store and see the kids hanging there .. they will be the loyalist customers of it for coming decades.
1. Inflation is headed high… burgers cost goes higher but Rich /middle Indians don’t care.
2. Inflation is lower .. profits are much more as input cost decreases.
3. 2008 when the recession hit the USA .. see the sales of USA MC Donald’s and the stock price, the pointer it’s a recession proof business.
4. Businesses have a moat and competitive advantage. No one makes better burgers than Mc Donalds
5. Last which I shall not write but seeing kids around me .. just want to go to Mc Donald’s to have the toy…. Read Charlie Munger and you will get it. These kids are going to be looooooooooooooooong term loyaaallll customers …!!
In India everyday, the population increases by more than a crore. Stat says India will have some smart cities and there is going to be a huge migration of rural population to cities and if all people who will migrate will have a burger once at McDonolds.
I believe this stock has been presented on a platter to us. The liquidity is low, Presence is low and as India catches up, Population grows earnings will catch up and …
SBI MF bought some chunk at 250 RS.
63 percent with Promoters. Even at a very short term, you can get an appreciation of 100 RS I.e is a range of 50 to 70 percent.