Buy Devyani International; target of Rs 190: Emkay Global Financial

Emkay Global Financial is bullish on Devyani International has recommended buy rating on the stock with a target price of Rs 190 in its research report dated January 07, 2026.

Broker Research

January 07, 2026 / 13:26 IST

Buy

Emkay Global Financial' research report on Devyani International

The promoters and management teams of Devyani International (DIL) and Sapphire Foods (SFIL) jointly held an investor call, to explain the deal contours, potential merger synergies, and planned growth investments. DIL has been able to negotiate a favorable agreement with Yum!, in terms of significant cost waivers in PH, phased transition of key business functions like tech/supplychain management (SCM) for PH/KFC, and additional marketing/innovation rights for PH. Some of these new functions, though, will require new tech/team capabilities; DIL has already started investing in leadership gaps and shortlisted a global tech partner. Encouragingly, the expected synergy benefits of Rs2.10-2.25bn are net of these investments; 60% of the savings should likely accrue in FY28E itself, with the complete benefit expected in FY29E. With relaxed store targets in the new agreement along with cost waivers, DIL expects revival of the PH brand and return of double-digit brand contribution for the format (vs largely having achieved breakeven currently). Factoring in a sluggish demand environment, we cut our near-term earnings by 7-9%.

Outlook

However, rollover to Dec-27E earnings keeps the TP intact at Rs 190 (33x Dec27E EBITDA); we reiterate BUY on Devyani.

For all recommendations report, click here