Business

Burger King Gains After Credit Rating Upgrade From ICRA

Shares of quick service restaurant chain operator Burger King rose as much as 4 per cent to hit an intraday high of Rs 132.60 after the credit rating agency ICRA upgraded its credit rating to stable from negative. ICRA upgraded its outlook on long-term loan worth Rs 210 crore, long-term bank overdraft worth Rs 20 crore and short-term bank guarantee of Rs 10 crore to A2 from BBB+ and revised outlook from Negative to Stable.

“The ratings upgrade takes into account significant improvement credit metrics of Burger King India Limited’s (BKIL or the company) due to prepayment of entire debt on its balance sheet following successful completion of IPO in Dec 2020,” ICRA said in a note.

The ratings upgrade also considers the recovery witnessed in sales with break-even achieved for the quarter Q3FY2021. The company reported an operating profit of Rs.0.3 crore on an operating income of Rs 163.2 crore in Q3FY2021 compared to an operating loss of Rs. 52.4 crore and Rs. 10.2 crore on an operating income of Rs38.3 crore and 96.7 crore in QIFY2021 and Q2FY2021, respectively.

The Stable outlook on the [ICRA]A- rating reflects ICRA’s opinion that BKIL will continue to benefit from healthy growth prospects of the QSR industry and acceptability as a well-recognised burger brand with wide range of offerings in India, ICRA added.

As of 12:10 pm, Burger King shares traded 2.39 per cent higher at Rs 130.45, outperforming the Sensex which was up 0.45 per cent.

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