Despite reporting a wider net loss for Q3FY26, Devyani International Ltd. (DIL) has received some positive news. Brokerage firm Jefferies has upgraded the stock to 'buy' from 'hold' and suggested a target price of Rs 145, expressing renewed confidence in the company's prospects following recent management changes and early signs of operational improvement. The new target implies an upside potential of 8.47% over the previous close. The stock has rallied close to 10% in Thursday trade.
In its latest note, Jefferies said it expects the new CEO to put the franchise back on a sustainable growth path. The appointment of the new chief executive is being viewed as a key trigger for recalibrating strategy across Devyani's quickservice restaurant (QSR) portfolio, which includes major global brands such as KFC and Pizza Hut.
Jefferies also highlighted management commentary suggesting ongoing progress at Pizza Hut. According to the brokerage, the Chairman indicated the Pizza Hut turnaround is underway, offering a positive signal for one of the company's historically slower growing formats.
Operational trends at the start of the year appear positive. Jefferies noted that January started on a positive note for all brands, indicating strong samestore sales growth (SSSG) across the portfolio, excluding Pizza Hut.
The firm also weighed in on DIL's recently announced merger with Sapphire Foods, stating the merger may involve short term uncertainty, but the brokerage views it as a long term positive.
DIL is the largest franchisee for Yum Brands' QSR chain that include KFC & Pizza Hut in India. In addition, DIL is the sole franchisee for Costa Coffee, Tea Live, New York Fries and Sanook Kitchen in India. It also owns the South Indian vegetarian food chain, Vaango.
Devyani Share Price Today
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The scrip rose nearly 10% with the stock trading as much to Rs 133.60 apiece on Thursday. This compares to a 0.61 decline in the NSE Nifty 50 Index. The relative strength index was at 48.97.
Out of 26 analysts tracking the company, 18 maintain a 'buy' rating, seven recommend a 'hold,' and five suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target of Rs 1012.56 implies an upside of 721.5%
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