Devyani International Q1 Results Review - Weakness Sustains; All Eyes On Recovery In H2: Motilal Oswal

Motilal Oswal Report

Devyani International Ltd.’s consolidated revenue grew 44% YoY (in line) including the recent acquisition in Thailand. India revenue up 6% YoY, despite a 20% YoY store growth, which was offset by weak same-store sales growth across brands. KFC’s SSS declined 7%, Pizza Hut at -8.6%, and Costa Coffee at +0.6%.

Devaluation of the Nigerian Naira also hit revenue growth. KFC’s revenue grew 7% YoY, while Pizza Hut’s revenue contracted 1% YoY. Growth metrics sustained a weakness; a similar trend was witnessed across its quick service restaurant peers.

India business ROM contracted 2% YoY to Rs 1.4 billion with a margin contraction of 140 basis points YoY to 16.2% (14.9% in Q4). KFC’s ROM dipped 160 bp YoY to 19.5% (19.0% in Q4), and Pizza Hut’s ROM contracted 510 bp YoY to 4.9% (4.4% in Q4).

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