Accumulate Devyani International; target of Rs 193: Deven Choksey

Deven Choksey's research report on Devyani International

Devyani International’s Q1FY26 performance stood below our estimates across the metrics, led by subdued SSSG growth in domestic market and lower traction in international markets, compounded by weaker operational performance. Devyani’s consolidated revenue grew by 11.1% YoY (+11.9% QoQ) to INR 13,570 Mn., led by strong growth in KFC (+10.5% YoY), Costa (+14.1% YoY), and the food court business in India, aided by 11.2% YoY growth in international operations. The company added a 103 net stores in India and 3 stores in international markets, taking the total store count (Inc. Sky Gate) to 2,145. Moreover, during Q1FY26, it acquired an 86.13% stake in Sky Gate Hospitality (with total 105 outlets), enhancing its footprint in Biryani and Indian cuisine.

Outlook

We have rolled forward our valuation basis to Jun’27 estimates. We value Devyani at 22.5x Jun’27 EBITDA, implying a target price of INR 193. We reiterate our “ACCUMULATE” rating on the stock.