Tag: Devyani International

Devyani International shares decline in 12 out of last 13 sessions to hit a new 52-week low

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Shares of Devyani International Ltd. dropped more than 3.5 percent on Friday to hit their lowest level in 52 weeks after falling in 12 of the last 13 sessions.

The stock fell as much as 3.5 percent in intra-day trade on Friday to hit a low of Rs 136.25. Shares have fallen 10.5 percent in the last 13 sessions and over 25 percent in the last six months.

Devyani International is primarily engaged in the business of developing, managing and operating quick service restaurants and food courts for brands such as Pizza Hut, KFC, Costa Coffee, Vaango etc.

During the quarter ended December 2022, Devyani International’s revenue grew 27 percent year-on-year to Rs 790.6 crore from Rs 624.4 crore in the year-ago quarter.

The company’s profit after tax (PAT) stood at Rs 71 crore during the December quarter, an increase of 7.6 percent on a year-on-year basis.

The company also said that it opened 81 new stores during the December quarter, bringing the total number to 1,177. During this period, the company opened 17 Pizza Hut stores and 38 KFC stores and expanded its presence from 224 cities at the end of September 2022 to 227 cities at the end of December 2022.

After its results, brokerage firm KRChoksey gave a ‘buy’ call on the stock with a target price of Rs 230 per share.

“Devyani International has shown strong performance in a seasonally soft quarter and continues to add stores in core brands, which is helping the company grow at a faster rate,” the brokerage firm said in a report dated February 16.

“The company’s store additions are in line with its expansion plans, adding 250 stores every year until financial year 2026. We expect Devyani International to continue expanding its presence into new geographies and penetrate deeply into existing cities,” it added.

Shares of Devyani International are trading 3.5 percent lower at Rs 136.75.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Here’s why Citi prefers Devyani International over Jubilant Foodworks

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

[wealthdesk shortname=”Devyani Int” isinid=”INE872J01023″ bseid=”543330″ nseid=”DEVYANI” sector=”Consumer Food” exchange=”nse”]

Citi has initiated coverage on Devyani International and assigned a ‘Buy’ rating with a target price of Rs 232 per share, which is around 38 percent upside to the current trading price.

The global brokerage expects Devyani International’s decision to exit loss-making formats and improve average daily sales to drive its business.

Devyani International Ltd. (DIL) is the largest franchisee of Yum Brands in India and is among the largest operators of quick-service restaurant chains in the country. The company operates KFC, Pizza Hut, TWG Tea, and Costa Coffee restaurants in India. It is also a franchisee of KFC and Pizza Hut in Nigeria and Nepal.

Citi expects DIL to clock a 30 percent revenue CAGR over the financial year 2023-2025 period. The profit-before-tax margins are expected to improve by 550 basis points during this period. Cumulative free cash generation is seen at Rs 450 crore.

DIL is expected to report a profit after tax of Rs 400 crore in the financial year 2025.

Citi has also preferred Devyani to Jubilant Foodworks Ltd. given better near-term growth prospects.

Jubilant Foodworks is the master franchise for Domino’s Pizza in India, Nepal, Sri Lanka, and Bangladesh.

Citi noted that while Devyani trades at 44X of 25 PE ratio against Jubilant Foodworks at 39X, the premium is justified due to higher revenue growth and ROE expectations.

Devyani reported a consolidated income of Rs 751.94 crore in the September quarter. It posted a profit after tax of Rs 56.83 crore for the September quarter.

Shares of Devyani ended 2.16 percent lower at Rs 167.70 on the BSE on Monday.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Inside Out: Go Fashion to add 120-130 stores every year

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

[wealthdesk shortname=”Go Fashion” isinid=”INE0BJS01011″ bseid=”543401″ nseid=”GOCOLORS” sector=”Retailing” exchange=”nse”]

In this special show ‘Inside Out’, the focus is on Go Fashion which is going to complete a year soon on the bourses. It was listed in November 2021 with massive listing gains of 91 percent. Go Fashion has seen the first mover advantage in the women’s bottom wear segments. It operated under the brand Go Colors and saw a shift from the unorganised to organised market here.

In terms of what they do via distribution as any retailer would do, they have exclusive brand outlets (EBO) and also large format stores with 533 EBOs and around 1,700 large format stores.

As much as 70 percent of their revenues coming from EBO’s; 23 percent from large format stores and 2.50 percent from online stores. Their revenue for FY22 was Rs 400 crore, which doubled on a year-on-year basis because of a low base margins of 30 percent and profits of Rs 58 crore.

Speaking to CNBC-TV18, Gautam Saraogi, CEO of Go Fashion said, “We have a very small market share in a very large addressable market. We have an 8 percent market share in 4,000 crore addressable market which will become 11,000 crore by 2025. So, the opportunity for growth is very large for us. Today have about 533 stores so, we are going to keep adding 120 to 130 stores, we are going to have very strong same-store sales growth. So, the opportunity for growth in this segment is very, very large.”

In the ‘Swotlight’ segment, CNBC-TV18’s Nigel D’Souza speaks about the valuation gap between Sapphire Foods and Devyani International.

Watch video for more

Also Read: Phoenix Mills on mall adding spree as it expects unprecedented festive season

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Mauritius-based Dunearn Investments to sell nearly 3% stake in Devyani International, shares fall 7%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Mauritius-based Dunearn Investments Pte Ltd is planning to sell nearly three percent stake in quick service restaurants chain operator Devyani International via a block deal, sources told CNBC-TV18. Dunearn Investments currently holds 16.26 percent stake in Devyani International.

Kotak Securities will be the broker for the deal.

Shares of Devyani International opened 5.18 percent lower on Tuesday on the BSE. The stock touched an intraday low of 6.91 percent. Devyani International’s stock has been losing for the last four days and has fallen 11.68 percent in the period.

The price range has been fixed at Rs 182-196.25 per share, at a 7 percent discount. The base offer is of 2.6 crore shares (2.19 percent equity) with an upsize option of 87.76 lakh shares (0.73 percent equity). The total deal size is of USD 80-86 million.

Also Read: Infosys cuts variable pay to 70% for June quarter amid margin squeeze

Devyani International is the largest franchisee of Yum Brands in India. The company operates 655 stores across 155 cities in the country, as of March 31, 2021. These includes brands like KFC, Pizza Hut, Costa Coffee, Vaango, The Food Street and more.

The company had reported a 100 percent year-on-year growth in revenue from operations at Rs 705 crore, up from Rs 353 crore in the year ago quarter. Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 167 percent from year-ago period to Rs 164 crore. The EBITDA margin stood at 23.3 percent for the quarter.

The margin improved by 590 bps, from 17.4 percent in the corresponding period  in the previous fiscal. The margins fell 100 bps sequentially from 24.3 percent from the previous quarter. Profit after tax (PAT) stood at Rs 74.5 crore, up from Rs 33.4 crore in the corresponding period  in the previous fiscal and Rs 75.9 crore in the previous quarter.

Catch latest market updates with CNBCTV18.com’s blog

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Hotels and restaurants may take a hit from ‘no service charge’ rule but D-Street doesn’t mind

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Shares of most hotels and restaurant chains including Indian Hotels, Sapphire Foods, and Barbeque Nation Hospitality among others were in the green territory on Tuesday, a day after the government banned hotels and restaurants from levying service charges.

Shares of Indian Hotels, Oriental Hotels, Jubilant Foodworks, Sapphire Foods and Devyani International among others rose in the range of 0.5 to 3.45 percent following the development. ITC and Mahindra Holidays and Resorts were trading lower.

Here’s how the stocks of the companies that will be impacted by the service charge development fared on Tuesday:

Following an increase in consumer complaints, the Central Consumer Protection Authority (CCPA) barred hotels and restaurants from levying service charge automatically or by default on food bills and allowed customers to file complaints in case of violation.

The CCPA has issued guidelines for preventing unfair trade practices and violation of consumer rights with regard to levying of service charges. Restaurants and hotels generally levy a service charge of 10 percent on the food bill.

“No hotels or restaurants shall add service charge automatically or by default in the bill,” CCPA Chief Commissioner said in the guideline.

A restaurant or hotel must inform the consumer that the service charge is voluntary, optional and at the consumer’s discretion.

Also Read: Consumers cut spending on clothing, fuel, gadgets as inflation eats into budget: Survey

In case a consumer finds a restaurant or hotel levying service charge, s/he can request the concerned hotel or restaurant to remove it from the bill amount, lodge a complaint on the National Consumer Helpline (NCH), file a complaint against unfair trade practice with the Consumer Commission or to the district collector for investigation and subsequent proceeding by the CCPA.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Pizza Hut plans to scale up to Domino’s size

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

[wealthdesk shortname=”Devyani Int” isinid=”INE872J01023″ bseid=”543330″ nseid=”DEVYANI” sector=”Consumer Food” exchange=”nse”]

Devyani International launched Pizza Hut in June 1996 in Bengaluru and after more than 26 years it opened its thousandth outlet. The company, which also has the likes of KFC and Costa Coffee brands under its wing, now has serious expansion plans and wants to open 1,000 more outlets in the next four years.

In the process, they want to take Pizza Hut to a position where it can compete with the giant of the game — Dominos. As per a few reports, by the end of 2021, Dominos had 1,400 stores in India.

Devyani International’s chairman Ravi Jaipuria and chief executive officer Virag Joshi spoke to CNBC-TV18 and elaborated on this.

“Today, we are opening the 1,000th store and we are looking at another 1,000 stores in the next four years. That is the average we are looking at across four brands, which is Pizza Hut, KFC, Costa Coffee, and our own brand, Vaango,” said Jaipuria.

Also Read: Kotak Institutional Equities adds Yum franchisees to coverage basket

The split in terms of additional stores, Jaipuria said, will be equal. “We are targeting about 100 stores each (Pizza Hut and KFC) per year and the balance would be for Costa Coffee and Vaango.”

The management said it was aware that it was a long journey towards reaching the size of Dominos, but believes that the key difference is the number of stores.

“Our key issue is going to be how fast we can scale it to a level where when a person wants to order a pizza from Pizza Hut, we are able to deliver it,” Jaipuria explained.

“We are as profitable as Dominos, practically, and with the volume that is much lower than theirs,” he added.

Devyani International’s stock is up 25 percent in the past year but has seen a dip of 6 percent odd in the past six months as the markets have corrected. Comparatively, Jubilant FoodWorks, which runs Dominos, has dropped 26 percent in the same period.

On same-store-sales growth, Joshi said: “We have already said that we are looking at about 4-5 percent growth in KFC and about 6-7 percent in Pizza Hut.”

However, it is the delivery business that is the most important growth path for both the chains and the numbers on that front are looking robust.

“Our delivery business in Pizza Hut is going up to about 50-60 percent of our business. So, the experience on the delivery piece, keeping in hygiene, safety and all in mind, we are in the sweet spot today,” said Joshi.

For the entire discussion, watch the accompanying video

Catch the latest stock market updates with CNBCTV18.com’s blog

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Kotak Institutional Equities adds Yum franchisees to coverage basket

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Kotak Institutional Equities has initiated its coverage on Devyani International, the largest franchisee of Yum! Brands in India, with an ‘add’ rating and target price of Rs 151. It also initiated coverage on Sapphire Foods India, another big franchisee of Yum! Brands, with a ‘buy’ call and target price of Rs 1,425.

“Yum franchisees Devyani International (DIL) and Sapphire Foods (SF) have emerged as the fastest-growing quick-service restaurants (QSRs) in India,” said the domestic brokerage firm in a note.

Reduction of cost structure and shutdown of loss-making stores have helped both the companies to accelerate store additions. Lower discounting by aggregators and reduced competition from cloud kitchens also worked for quick-service restaurants.

Devyani International and Sapphire Foods India operate outlets of KFC and Pizza Hut restaurants in India.

The brokerage firm expects Sapphire Foods to be one of the fastest-growing QSRs in India over the next 2-3 years with margin expansion and an improving return profile.

It believes that the company is well placed to rise on the industry tailwinds and capitalise on the under-penetration of KFC and Pizza Hut in India. Plus, valuations appear attractive which provides comfort to the brokerage firm.

Devyani International has also shown an impressive turnaround in profitability, as per the firm. The brokerage firm expects the growth momentum to continue on the back of sharper execution, incentives from Yum, and KFC and Pizza Hut’s under-penetration.

On the valuation front, Kotak Institutional Equities said, “Valuations are stretched but can sustain in view of strong earnings growth and optionality”.

Devyani International merits valuation premium over Sapphire Foods in view of the larger market opportunity, it said.

Also Read | Some QSR stocks are looking tempting as India heads out to eat more frequently

“Our bottom-up analysis indicates 58:42 split of KFC India market opportunity and 67:33 split of PH (Pizza Hut) India market opportunity between DIL:SF,” as per the brokerage firm’s analysis.

“On a blended basis, DIL:SF have 61:39 share of Yum India market opportunity,” Kotak Institutional Equities added.

Pizza Hut which is the second-largest Pizza quick-service restaurant in India can unlock meaningful value for both Devyani International and Sapphire Foods, as per the brokerage firm.

Additionally, the brokerage firm likes the growth focus of Devyani International’s Promoters and their track record of unlocking optionality.

“We expect the execution gap between the two players to continue to narrow as they compete and emulate each other’s best practices,” it said.

Shares of Devyani International rose 3.7 percent on the BSE while those of Sapphire Foods were up 2.2 percent.

Devyani International operates 777 outlets in India, including 364 outlets of KFC and 413 outlets of Pizza Hut, across 204 cities in India as of March 2022.

Sapphire Foods operates 482 restaurants in India as of March 2022, including 263 outlets of KFC India and 219 outlets of Pizza Hut India.

Catch up on all LIVE stock market updates here.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

4 reasons why Motilal Oswal Financial Services remains bullish on Devyani International

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Motilal Oswal Financial Services has a ‘buy’ call on Devyani International — an operator of KFC and Pizza Hut restaurants in India — with a target price of Rs 210. The brokerage is positive on the company’s strong performance in the October-December period with an overall improvement.

According to Motilal Oswal Financial Services, both KFC and Pizza Hut saw sequential growth in average daily sales (ADS) in the third quarter of FY22 despite adding a large number of stores in the past five quarters.

ALSO READ: How Street is reading new age co Q3 results

The brokerage remains bullish on Devyani International’s prospects on :

• KFC’s strong brand equity
• Turnaround in Pizza Hut led by a focus on delivery
• Sharp network expansion across the portfolio
• Healthy mid-teen operating profitability

Devyani has managed to migrate from a dine-in company to a delivery-focused one, and its management expects this to strengthen further as most new stores are delivery-focused, Motilal Oswal Financial Services added.

Earlier this month, Devyani reported a net profit of Rs 63.1 crore for the December quarter, up 44.1 percent on a year-on-year basis. Its quarterly revenue increased 64.7 percent on year to Rs 624.4 crore, according to a regulatory filing.

ALSO READ: CLSA initiates coverage on Devyani

Devyani International operated 339 KFC stores, 391 Pizza Hut stores and 50 Costa Coffee stores in India, as of December 31, 2021, its management said after the earnings announcement.

The company opened 192 net new stores across core brands in the nine months to December 31, 2021, with 81 net new stores in Q3, it added.

Catch latest stock market updates with CNBCTV18.com’s blog

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Devyani International Q3 Earnings: Net profit up 44% at Rs 63 crore, revenue up 65%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Devyani International on Friday reported a net profit of Rs 63.1 crore for the October-December period, up 44.1 percent on a year-on-year basis. The stock of Devyani International – which operates brands such as KFC and Pizza Hut in India – fell as much as 3.6 percent to Rs 177.5 after the earnings announcement.

Its quarterly revenue increased 64.7 percent on-year to Rs 624.4 crore, according to a regulatory filing.

Devyani International has continued to build on the momentum in its business by way of store additions, revenue enhancement and profitability, said Chairman Ravi Jaipuria.

“At Devyani, our focus has remained on constantly improving the quality and safety of our operations and ensuring that we enable greater number of customers to experience the globally renowned brands at an accessible price point, through our omni-channel network,” he said.

“As on December 31, 2021, we operated 339 KFC stores, 391 Pizza Hut stores and 50 Costa Coffee stores in India. Including our own brands’ stores, our total system stores stand at 884. We continue to accelerate the expansion across our markets. We have opened 192 net new stores across core brands in the nine months ended December 31, 2021 with 81 net new stores in Q3 FY22,” he added.

The company reported Rs 147.8 crore in earnings before interest, taxes, depreciation and ammortisation (EBITDA), up 61.7 percent compared with the corresponding period a year ago.

Devyani’s EBITDA margin came in at 23.7 percent in the third quarter of the current financial year, as against 24.1 percent in the year-ago period.

Devyani International shares debuted on stock exchanges BSE and NSE in 2021. It is among the top Dalal Street debutants of recent times.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CLSA initiates coverage on Devyani International, target price Rs 207/share

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

CLSA has initiated coverage on Devyani International with an ‘outperform’ rating and assigned a target price of Rs 207 per share. The brokerage is positive on the company’s expansion spree and expects its operating leverage benefits to kick at some point. The stock has already rallied about 56-57 percent over the last three months.

According to CLSA, the EBITDA levels the company posted for FY21 could quadruple over the next three years, for three reasons:

• Aggressive store expansion
• Pizza Hut to start seeing improved unit economics
• Company to start to see improved operating leverage benefits

On Tuesday, the Devyani stock rose as much as 5.7 percent to Rs 197.2 apiece on BSE, coming within one percent of a 52-week high of Rs 198.9 apiece, hit in mid-December. It has more than doubled from its IPO price of Rs 90.

CLSA values the company at 26 times its FY24 EV-to-EBITDA ratio. Assuming that the EBITDA has quadrupled from FY21 levels, it is at a discount of around 10 percent to Jubilant FoodWorks, according to the brokerage.

It values the company at 77 times FY24 earnings. The brokerage is optimistic giving the extremely large opportunity in India’s QSR space.

Catch all stock market updates here

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow