Devyani International wins on recovery in Q2 performance

Devyani International rose 3.34% to Rs 126.80 after the company announced consolidated net profit of Rs 46.6 crore in Q2 FY22 against a net loss of Rs 65.5 crore in Q2 FY21.

Second quarter operating income rose 124% to Rs 516.1 crore from Rs 229.9 crore reported in the same period last year.

“Healthy operating revenue growth, new store additions and sustainable cost optimizations enabled the company to become profitable during the quarter,” said Devyani International.

Company revenue in India – KFC grew 141% year-on-year and Pizza Hut revenue grew 111% year-on-year in the quarter. It recorded healthy growth in international business, which recorded 90% year-over-year revenue growth to Rs 500 crore. The reported same-store sales (SSSG) growth of KFC and Pizza Hut was 72% and 76%, respectively.

EBITDA improved 225% to Rs 123.3 crore in Q2 FY22 versus Rs 38 crore in Q2 FY21. EBITDA margins stood at 23.9% in Q2 FY22 compared to 16.5% in Q2 FY21. The brand’s contribution increased by 346% to Rs 106.7 crore, with margins of 20.6% in the second quarter.

The company added 111 new stores net in the first half of fiscal 2022, bringing the total to 803 stores as of September 30, 2021 from 692 stores as of March 31, 2021.

Ravi Jaipuria, President of Devyani International, said: As of September 30, 2021, we operated 309 KFC stores, 351 Pizza Hut stores and 45 Costa Coffee stores in India. Our long-term goal is to consolidate our presence in large metropolitan cities while operating small towns, which allows us to bring our brands closer to our customers.

We have seen a big recovery on the demand side as restrictions related to Covid 19 ease and vaccine coverage improves. Building on this demand dynamic in our markets, we expect to achieve strong operational and financial performance. We are also aware of the inflation of input costs in various industries, including QSR, on both the capital expenditure side and the operating expense side. We have incorporated several levers into our business to mitigate the impact of input inflation.

Devyani International (DIL) is Yum’s largest franchisee! Brands Inc. (which operates brands such as KFC, Pizza Hut and Taco Bell) in India and is one of the largest operators of Quick Service Restaurant (QSR) chains in India, on a non-exclusive basis, and operates 803 stores in more than 175 cities in India, Nigeria and Nepal, as of September 30, 2021. In addition, DIL is franchised of the Costa Coffee brand and stores in India.

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(This story was not edited by Business Standard staff and is auto-generated from a syndicated feed.)

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