Top buzzing stock: Burger King

Is Burger King ready to pick up the momentum? Let's find out.

Burger King India is engaged in the business of operating quick-service restaurants (QSR) in India. Having total outlets of about 469, Burger King has become the fastest QSR brand in India and clocked over 200 stores in a matter of 5 years. It is a midcap company with a market cap of Rs 6,246 crore. The company has reported increasing revenues but has, in fact, increased its net losses owing to its operating margins. However, the business management believes in their practices to revive the company’s financials.

The majority stake of the company lies with the promotors which is about 52.56%, while the foreign investors and public hold 16.63% and 25.59% of the stake, respectively. The DIIs hold just a 5% portion of the company.

Burger King made a blockbuster listing on the exchange last year in December and was the hot topic in the IPO market. Since then, the stock has not been able to perform better as the YTD returns stand negative 7% while 3-month performance stands at just 1.47%. The stock has also been beaten for quite some time.

However, in the last two trading sessions, the stock has rallied about 10%, with today’s contribution of over 6%. It has crossed above its 20, 50, and 200-DMA indicator and now the only hurdle to par is the 100-DMA which lies at 163. Currently, the stock trades at 162. Moreover, the MACD has given a bullish crossover and RSI has jumped from 39 to 58 in the last two days which indicates that the stock has gained some strength and is ready for an up move. Also, rising volumes in the past few days suggest huge buying and the stock can witness some good price action in the coming days.

What’s more interesting is that the moving averages have been closely placed to one another, which shows that the stock hasn’t made any volatile moves in the past. If it closes above its 100-DMA in near future, the stock is expected to show a big rally the following days.

With all the technical parameters suggesting bullishness of the stock, along with price action and huge volumes, one can expect the stock to be trading higher in the coming days.