Hold Devyani International; target of Rs 185: KR Choksey

KR Choksey recommended hold rating on Devyani International with a target price of Rs 185 in its research report dated August 23, 2024.

Broker Research

August 26, 2024 / 14:42 IST

hold

live

bselive
nselive

Volume

Todays L/H

KR Choksey's research report on Devyani International

For Q1FY25, DEVYANI’s revenue was INR 12,219 Mn, a growth of 44.3% YoY (+16.7% QoQ), which outperformed our estimates. EBITDA for the quarter was INR 2,234 Mn, which grew by 28.8% YoY (+29.4% QoQ). The growth was primarily driven by robust growth in the top line. EBITDA outperformed our estimates due to better-than-expected top-line growth. EBITDA margin was under pressure due to higher-than-expected operational expenses (-221 bps YoY,+180 bps QoQ). Adj PAT for the quarter was at INR 377 Mn, (-36.3% YoY,+8.0% QoQ). Adj PAT was higher than our estimate due to better operating performance and a significant difference in minority interest. Adj PAT margin decreased 390 bps YoY (-25 bps QoQ).

Outlook

We lower our FY26E EBITDA estimates by 6.9% due to increased competition intensity in the QSR industry and multiple headwinds in the Pizza Hut segment. We assign the EV/EBITDA multiple of 23.0x (previously: 20.1x) due to healthy growth prospects, resulting in a revised target price of INR 185/share (previously INR 152). Given the 2.2% upside from the CMP, we downgrade our previous rating of “ACCUMULATE” to “HOLD” on the shares of Devyani International Ltd.

For all recommendations report, click here