Devyani International Q2 Review: Sluggish Demand Impacts Growth, Says Dolat Capital Maintaining 'Sell'

Devyani’s revenue was in line, while Ebitda and adjusted profit after tax were below estimates. Revenue grew by 12.6% including the Thailand (ex-Thailand up 4.2% YoY) led by outperformance from own brands (incl. Vaango, Biryani by Kilo and Goila Butter Chicken) on a favorable base of Q2 FY25 and a double-digit growth in the international markets. However, the same-store sales growth for KFC/ Pizza Hut (PH) were -4.2/-4.1% respectively..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Dolat Capital Report.As Devyani International Ltd.’s operating performance and profitability were below our estimate, we have downward revised our FY26/27E Ebitda by 4.8/4.5% and introduced FY28E estimates. Though the base for Pizza Hut and KFC would become favorable in the ensuing quarters, overall slowdown is expected to pressurise profitability. We value the stock at 18x FY28E EV/Ebitda, arriving at a target price of Rs 147 (Rs 153 earlier). Reiterate ‘Sell’ rating..Devyani’s revenue was in line, while Ebitda and adjusted profit after tax were below our estimates. Revenue grew by 12.6% including the Thailand (ex-Thailand up 4.2% YoY) led by outperformance from own brands (incl. Vaango, Biryani by Kilo and Goila Butter Chicken) on a favorable base of Q2 FY25 and a double-digit growth in the international markets. However, the same-store sales growth for KFC/ Pizza Hut (PH) were -4.2/-4.1% respectively.The company added 30/3/2 stores in KFC/PH/Costa Coffee and 2/2 in Thailand/Nepal, respectively, taking the total store count to 2,184. Furthermore, the company rolled out six tea live outlets during the quarter. Going ahead, the company will continue to expand KFC stores, while the store expansion for Pizza Hut will remain muted..Click on the attachment to read the full report:.Motilal Oswal Downgrades Updater Services To 'Neutral' Amid Guidance Cuts, Near-Term Headwinds.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Devyani International Q2 Review: Sluggish Demand Impacts Growth, Says Dolat Capital Maintaining 'Sell'

Dolat Capital trims Devyani International's target price, and maintains 'Sell' rating- check details

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