Devyani International
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
Devyani International Limited (DIL) is positioned for growth, driven by robust same-store sales growth (SSSG) across its key brands, particularly KFC, and a strategic merger with Sapphire Foods expected to enhance operational synergies. Management's focus on expanding its footprint beyond metro areas and enhancing digital capabilities supports revenue growth, despite challenges from inflationary pressures on raw materials and labor costs. The company's recent performance indicates improving margins, bolstered by disciplined cost management and a pivot towards dine-in services. However, the ongoing struggles of the Pizza Hut segment and potential external risks, such as geopolitical tensions and seasonal demand fluctuations, warrant caution. Vista's financial outlook reflects a moderate revenue growth trajectory, with margins expected to improve as operational efficiencies are realized. The merger is anticipated to unlock significant value, although the current valuation suggests limited upside potential. Over the next 12-24 months, DIL's ability to navigate these challenges while capitalizing on growth opportunities will be critical to its performance
Why We Like This Stock
- Strong same-store sales growth at KFC indicates robust consumer demand and operational efficiency
- The merger with Sapphire Foods is expected to create synergies and enhance market positioning
- Expansion into underpenetrated markets and improved digital capabilities support long-term revenue growth
Things To Watch Out For
- Pizza Hut continues to struggle with negative same-store sales growth, impacting overall performance
- Inflationary pressures on raw materials and labor costs pose risks to margin stability
- Geopolitical tensions and seasonal demand fluctuations could disrupt operational consistency
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 3,556 | 4,951 | 5,611 | 5,657 | 6,310 |
| Profit Before Tax (Cr.) | 18 | 17 | -36 | -34 | -12 |
| PBT Margin | 0.5% | 0.3% | -0.6% | -0.6% | -0.2% |
| Net Profit (Cr.) | -192 | -14 | -48 | -25 | -9 |
| Earnings Per Share | -1.1 | 0.0 | -0.4 | -0.2 | -0.1 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Macguire | ▲ Outperform | 190 | 26-Aug-2026 |
| Anand Rathi | ▲ Buy | 160 | 31-Jul-2026 |
| Elara Capital | ▲ Buy | 140 | 30-Jul-2026 |
| Motilal Oswal | ▲ Buy | 160 | 30-Jul-2026 |
| Deven Choksey | ▲ Buy | 133 | 20-May-2026 |
| Goldman Sachs | ▲ Buy | 142 | 18-May-2026 |
| Jeffries | ▲ Buy | 155 | 18-May-2026 |
| Kotak Securities | ▲ Buy | 155 | 18-May-2026 |
Company Overview
Show Company Profile
Devyani International Limited develops, manages, and operates quick service restaurants and food courts in India, Nepal, Nigeria, Thailand, and internationally. It operates outlets under the KFC, Pizza Hut, Costa Coffee, Vaango and other brands. The company serves retail consumers for quick service food and beverages through dine in, takeaway, and delivery channels. The company was incorporated in 1991 and is based in Gurugram, India. Devyani International Limited operates as a subsidiary of RJ Corp Limited.