This article first appeared on GuruFocus .
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Total Store Count:2,279 stores as of December 31, 2025.
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KFC Stores:1,174 stores, with 54 net new additions in Q3 FY26.
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Pizza Hut Stores:648 stores, with 18 net new additions in Q3 FY26.
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Consolidated Revenue:INR 1,441 crores, up 11.3% year-on-year.
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Consolidated Gross Profit:INR 993 crores, with margins at 68.9%.
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Consolidated Operating EBITDA:INR 124 crores, with margins at 8.6% pre-Ind AS.
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Reported EBITDA:INR 227 crores, with margins at 15.7%.
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India Operations Revenue:INR 978 crores, up 12.1% year-on-year.
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KFC India Revenue:INR 603 crores, up 5.9% year-on-year.
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KFC India Gross Margin:69.8%, with a 1.2% improvement year-on-year.
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Pizza Hut India Revenue:INR 178 crores.
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Pizza Hut India Gross Margin:76%, with a 1.2% improvement from the preceding quarter.
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Franchise Brands Revenue:INR 56 crores, with gross margins at 75.7%.
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Own Brands Revenue:INR 94 crores, with gross margins at 64.2%.
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International Business Revenue:INR 473 crores, up 10.1% year-on-year.
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International Business Gross Margin:64.9%.
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Warning! GuruFocus has detected 3 Warning Sign with BOM:543330.
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Release Date: February 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Devyani International Ltd ( BOM:543330 ) reported a 12.1% year-on-year growth in India operations, with consolidated revenues reaching INR1,441 crores, up 11.3% year-on-year.
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The company achieved breakeven brand EBITDA for Biryani By Kilo ahead of schedule, indicating strong operational efficiency.
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The International business added 20 new stores in Thailand and Nepal, contributing to a total store count of 2,279 stores globally.
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The proposed merger with Sapphire Foods is expected to create one of the largest diversified F&B platforms in India, with more than 3,000 stores globally and a turnover approaching USD1 billion.
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Devyani International Ltd ( BOM:543330 ) has seen positive same-store sales growth (SSSG) across all brands in January, except for Pizza Hut, indicating a potential turnaround in sales momentum.
Negative Points
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Pizza Hut continues to face challenges, with the company planning to shut down loss-making stores and not add any net new units in 2026.
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Despite improvements, the KFC brand in India has experienced 10 quarters of SSSG decline, raising concerns about long-term brand performance.
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The company is lagging behind in technology compared to peers, which could impact operational efficiency and customer engagement.
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There is a need for a differentiated strategy for KFC to address cannibalization and improve SSSG and profitability.
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The company faces challenges in maintaining EBITDA margins in a weak environment, with a focus on turning around SSSG and ADS numbers.
Q & A Highlights
Q: What are your key focus areas for ramping up the next phase of growth for Devyani International? A: Manish Dawar, the CFO, emphasized the importance of turning around the same-store sales growth (SSSG) and average daily sales (ADS) numbers. He highlighted the need for a strong technology focus, as Devyani is currently lagging behind peers in this area. The operational priority remains crucial, and the leadership team will be ready before the merger consummation.
Q: What initiatives have led to the improvement in SSSG in January 2026, and how sustainable is this turnaround? A: Manish Dawar mentioned experimenting with promotions and deals, as well as changing strategies for online and offline business, which helped improve January's SSSG. However, he cautioned that it's just one month of data, and they are still experimenting to determine a sustainable strategy.
Q: Can you maintain the current EBITDA margins even in a weak environment, and should we expect improvement in the coming quarters? A: Manish Dawar expressed confidence in maintaining EBITDA margins, citing the turnaround of Biryani By Kilo to breakeven and strong performance in Nepal and Nigeria. He noted that while KFC in India has seen better SSSG losses, they are hopeful of maintaining EBITDA numbers.
Q: With KFC experiencing SSSG decline, is there any plan to slow down store additions to improve profitability? A: Manish Dawar acknowledged some cannibalization due to rapid store openings but emphasized the need for a differentiated strategy for online and offline business. He mentioned that KFC is seen as a growth brand, and they are working on strategic directions to address the challenges.
Q: Regarding Pizza Hut, how many loss-making stores are there, and what is the plan for shutting them down? A: Manish Dawar stated that they have started shutting down loss-making stores and will continue this exercise over the next couple of years. The focus will also be on improving technology, marketing, and innovation for Pizza Hut, with a joint strategy plan to be developed post-CCI approval.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
