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Buy Devyani International; target of Rs 210: Motilal Oswal

Motilal Oswal is bullish on Devyani International recommended buy rating on the stock with a target price of Rs 210 in its research report dated May 02, 2022.

May 03, 2022 / 08:24 PM IST
 
 
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Motilal Oswal's research report on Devyani International


Omicron-led disruptions impacted operations for four-to-six weeks in 4QFY22, leading to ~8% miss on our sales and EBITDA forecasts, even as YoY growth was healthy on both fronts. Average daily sales (ADS) in Mar'22 returned to pre-COVID levels. Despite the RM inflation, the management expects to maintain KFC's brand contribution margin near 22% in FY23. It raised prices by 8-9% in KFC in Apr'22 and may take further hikes depending on the movement of input cost.



Outlook


We maintain our Buy rating with a SoTP-based TP of INR210 per share (FY24E EV/EBITDA of 45x/35x for KFC/PH on a pre-Ind AS basis).

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first published: May 3, 2022 08:24 pm
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