Devyani International Set For 30% Upside On Sapphire Merger Says Motilal Oswal — Check Rating, Target Price

Valuing the merged entity at 25x EV/Ebitda (pre-Ind AS) on FY28E, Motilal Oswal reiterates its Buy rating on Devyani International with a target price of Rs 180, implying a 30% upside..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..Motilal Oswal Report.Motilal Oswal expects Devyani International Ltd. to unlock significant scale and synergy benefits through its proposed merger with Sapphire Foods India Ltd., consolidating Yum! Brands’ India operations under a single listed entity. The merger will be executed via a share swap, with 177 Devyani International shares issued for every 100 Sapphire shares and is expected to be completed by FY27. Before the scheme becomes effective, Sapphire’s promoter, Sapphire Foods Mauritius, will divest its ~18.5% equity stake in Sapphire to Devyani International’s group company, Arctic InternationalThe combined entity will operate ~3,000 stores and generate annualized revenue of ~Rs 7,800 crore, positioning it among India’s largest QSR players alongside Jubilant FoodWorks. Motilal Oswal highlights that the merger will deliver recurring annual synergies of ~Rs 220 crore, driven by lower operating costs for Pizza Hut, rationalization of corporate overheads, and procurement efficiencies. About 60% of these synergies (~Rs 110 crore) are expected to be realized in the first year post-merger, with full benefits accruing from the second year onward.Valuing the merged entity at 25x EV/Ebitda (pre-Ind AS) on FY28E, Motilal Oswal reiterates its Buy rating on Devyani International with a target price of Rs 180, implying a 30% upside..Click on the attachment to read the full report:.Adani Ports Poised For Long-Term Growth Says Motilal Oswal; Sees 22% Upside — Check Revised Target Price.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 Set For 30% Upside On Sapphire Merger Says Motilal Oswal — Check Rating, Target Price

The merged entity will have more than 3,000 stores globally and a turnover of ~Rs 7,800 crore on an annualized basis.

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