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.
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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