Buy Devyani International; target of Rs 215: Motilal Oswal

Motilal Oswal is bullish on Devyani International recommended buy rating on the stock with a target price of Rs 215 in its research report dated November 11, 2024.

Broker Research

November 13, 2024 / 11:06 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on Devyani International

Devyani International Ltd’s (DEVYANI) consol. revenue grew 49% YoY (est. +42%), including the recent acquisition in Thailand. India revenue was up 7% YoY, despite a 20% YoY store growth, which was offset by weak Same Store Sales Growth (SSSG) across brands. SSSG declined 7% for KFC (-8% for Sapphire) and 5.7% for PH (-3% for Sapphire). Costa Coffee SSSG increased 8.7%. Revenue growth for KFC was 7% YoY, Costa Coffee was up 42% YoY, while PH revenue was flat YoY. Growth metrics (SSSG, ADS) sustained a weakness; a similar trend was witnessed across its QSR peers. The Indian business ROM was down 7% and margin contracted 200bp to 13.2%, an all-time low (exclu. COVID quarters), owing to operating deleverage. KFC’s ROM contracted 280bp YoY to 16.6% (16.5% for Sapphire) and PH’s ROM contracted 460bp YoY/180bp QoQ to 3.1% (4.1% for Sapphire).

Outlook

We maintain our cautious stance on Quick-Service Restaurants (QSR) due to sustained competition and ongoing demand challenges. We reiterate our BUY rating on the stock with a TP of INR215 (premised on 35x Sep’26E PreInd-AS EV/EBITDA).

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