
Too many brands, too little growth? A deep look at Devyani International
Last Sunday, I was at a mall in Mumbai around lunchtime. I passed by the KFC outlet and noticed it was not that full. It may have just been a one-off, but for a brand as familiar and widely present as KFC, a quiet store felt unusual.
That small moment raised a bigger question in my mind about what is happening with Devyani International, which operates KFC, Pizza Hut, Costa Coffee, Vaango, and several other food and beverage chains, both in India and overseas. Together, it runs more than 2,000 outlets, making it one of the largest quick-service restaurant players in the country.
After listing in 2021, Devyani grew rapidly. It opened new stores across metros and smaller towns, added new brands, and expanded outside India as well. But lately, its growth has slowed down. Store-level sales are under pressure, customer footfall has dipped, and the stock has stayed flat for months.
At the same time, the company has not stopped investing in expansion. So the key question now is: can Devyani return to strong growth, or is it entering a longer phase of slow recovery?
Let us break it down and understand where the business stands today.
When most people think of Devyani International, they think of KFC or Pizza Hut. But the company manages a much wider portfolio.
As of March 2025, Devyani operates more than 2,000 outlets. These are spread across three main parts of the business:
📌Core Brands: This includes KFC, Pizza Hut, and Costa Coffee. These are run through franchise agreements with Yum! Brands and Coca-Cola.
📌Own Brands: Devyani also operates its own concepts, such as Vaango (focused on South Indian cuisine) and Food Street (multi-cuisine).
📌International Business: Devyani runs over 350 stores in countries like Nepal, Thailand, and Nigeria, where it has been expanding quietly over the years.
Among these, KFC is the main driver of revenue. It accounts for approximately 45% of total sales and operates around 700 stores. Pizza Hut is the second-largest, with approximately 15% of the revenue. Costa Coffee is still small in size but is growing steadily.
In the financial year 2025, Devyani added 235 new stores. Many of these came up in Tier 2 and Tier 3 cities, where the company expects future growth. The belief is that smaller towns will bring in new customers who are trying branded food chains for the first time.
However, while store count is increasing, the performance of existing stores is not improving in the same way. In the last quarter of FY25, same-store sales (SSSG) for KFC declined by 6.1%. For Pizza Hut, there was a marginal increase of 1%.
For the full year, India revenue grew by 7%, but operating profit (EBITDA) fell by 8%. This is because costs have gone up. Food inflation, rent, staff wages, and delivery platform fees have all added pressure.
To manage this situation, Devyani is:
So far, the business is growing in size, but profit margins remain under stress. Devyani is betting on long-term consumption growth, but for now, it is trying to manage rising costs while keeping its store network expansion on track.
What happens next will depend on whether consumers start spending more again and whether the new stores begin to perform better over time.
Devyani International closed FY25 with consolidated revenues of Rs 4,951 crore, EBITDA of Rs 842 crore, and a net loss of Rs 69 crore. This means the company cannot yet be valued using the standard Price-to-Earnings ratio, since it is not profitable at the PAT level.
However, the stock is still richly valued.
Devyani's market capitalisation stands at approximately Rs 21,000 crore (as of June 9, 2025), and based on the latest balance sheet, it carries net debt of about Rs 2,500 crore. This gives it an enterprise value (EV) of roughly Rs 24,000 crore.
That puts the stock at an EV/EBITDA multiple of 28 times based on FY25 EBITDA of Rs 842 crore.
This is among the highest valuations in the quick-service restaurant space, despite the company reporting a net loss, seeing negative same-store sales growth in key segments, and operating at sub-optimal store-level margins.
For such a valuation to sustain, the business must deliver a sharp turnaround, both in profitability and efficiency. The management has outlined plans for margin recovery and cost control, but the results are yet to play out fully.
In short, Devyani is priced for a recovery that is still in motion. Unless that recovery is faster and stronger than expected, investors may find limited near-term upside from these levels. The next few quarters will be crucial in showing whether the growth story is on solid footing or just running ahead of itself.
That quiet KFC outlet I saw in Mumbai may have just been one store on one day. But it pointed to something real that even big brands are not immune to when the broader spending environment is tight.
Devyani International is still building, still expanding, and still betting on India's love for quick, branded food. But it is now at a stage where more stores alone will not be enough. What matters next is how efficiently those stores perform, how margins are protected, and how the company adapts to a changing consumer mood.
For investors, it is a story to track with patience. Watch the numbers, see how the margins move, and decide whether the brand engine can fire up again.
Note: This article relies on data from annual and industry reports. We have used our assumptions for forecasting.
Parth Parikh has over a decade of experience in finance and research and currently heads the growth and content vertical at Finsire. He has an MBA in Finance from Narsee Monjee Institute of Management Studies.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


India Today
7 hours ago
- India Today
Kerala's state-run broadband for underprivileged families cross 1 lakh connections
Kerala Fibre Optic Network (Kfon), the state government's internet connectivity project, has crossed 1 lakh active connections, marking a significant milestone since its launch in June network has completed 31,153 kilometers of fiber optic cable infrastructure, making it the largest network in Kerala compared to other Internet Service Providers. Kfon aims to connect 4 million households and offices, including 2 million below-poverty-line present, Kfon provides 63,217 commercial FTTH connections, with 23,163 government offices connected, and 12,948 free connections for economically disadvantaged families. There are 2,771 Fibre to Office connections also provided by Kfon. The network serves both urban and rural areas across the state. All offices in the Kerala Secretariat have been using KFON services, and the Legislative Assembly was integrated into the network as of June the milestone, Kfon is now preparing to launch a dedicated OTT platform for Kerala, currently in its final tendering phase. The platform will offer South Indian channels and films at affordable prices. Plans also include IPTV services and securing Virtual Network Operator (VNO) licenses.'Crossing 1 lakh subscribers is a proud moment, but just the beginning,' said Santhosh Babu, Managing Director of Kfone. 'Our goal is to ensure no citizen is left behind due to lack of internet access.'advertisementGovernment departments including agriculture, education, statistics, and animal husbandry are using Kfon's Fiber to the Home (FTTH) Intranet services for centralised applications. The project supports e-governance, remote education, and digital innovation initiatives across was inaugurated on June 5 with the objective to connect over 4 million households and offices, including 2 million below-poverty-line families. The network has expanded its reach, ensuring internet access across both urban and rural areas. Over the past two years, all offices in the Kerala Secretariat have been utilising this service. By June 2024, the Legislative Assembly was also integrated into the Kfon network. IN THIS STORY#Kerala


Mint
15 hours ago
- Mint
Orkla India IPO: MTR Foods owner files DRHP with SEBI for public offer
MTR Foods IPO: Orkla India, which markets its products under our brands MTR and Eastern, filed its draft red herring prospectus with the market regulator Securities and Exchange Board of India (SEBI) to raise funds via an initial public offering (IPO). The proposed IPO by Orkla India is entirely an offer for sale (OFS) of up to 2.28 crore shares by the promoter and other selling shareholders of the company. Orkla Asia Pacific Pte, Navas Meeran and Feroz Meeran are among the shareholders offloading stake via the OFS. Given the OFS nature of the Orkla IPO, the entire proceeds will go to the selling shareholders, and the company will not receive anything. Under the Orkla India IPO, 50% of the offer is reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs) and 35% for the retail bidders. Orkla, formerly known as MTR Foods, is a multi-category Indian food company, specialising in South Indian cuisine. It offers various products for breakfast, lunch, snacks, dinner, beverages and desserts. The key product categories include spices and convenience Foods. Its products are marketed under its brands MTR and Eastern. According to the Technopak Report, quoted in the DRHP, in Fiscal 2024, Orka India was one of the top four companies in terms of revenue from operations among select leading spices and convenience food peers. The company held approximately 22.2% market share in the Indian branded spices exports segment in Fiscal 2024. Meanwhile, Eastern has maintained its position as India's largest exporter of branded spices for 24 consecutive years. ICICI Securities, Citigroup Global Markets India, JP Morgan India, and Kotak Mahindra Capital Company are the book-running lead managers to the issue. Orkla India IPO shares are proposed to be listed on the BSE and the National Stock Exchange (NSE). Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.


The Hindu
a day ago
- The Hindu
South Indian states will be engines of growth, says Dharmendra Pradhan
South Indian states with progressive governments will be the growth engines for the country as it strives to become a developed nation by 2047. The entire nation is proud of them, said Union Minister for Education Dharmendra Pradhan on Tuesday. The Centre has not yet made any strategy on the proposed delimitation of parliamentary constituencies, he said, and quoted Union Home Minister Amit Shah to say that there would be no discrimination against the South states on this count. Talking to the media to present a progress report on the 11 years of Modi Government, he said that the tentative Census schedule has been released and women's quota too has to be taken into account. South along with Western India, especially Maharashtra and Gujarat, will continue to be ahead of the rest of the country due to their historical background, knowledge base and hard work. Mr. Pradhan also justified more private universities pointing out that enrolment in higher education need to be enhanced from the current 27% to 50% by 2035. 'We need more colleges, quality educational institutions, and universities. We have recently opened up the sector for foreign universities. But, 75% students continue to study in government funded institutions,' he said. Golden period On the Centre's performance front, the Minister claimed that the last 11 years will be judged by history as a 'golden period' because of the manner in which the country had prospered economically by becoming the fourth largest and having drastically reduced poverty rates. 'From a fragile economy, we have become a destination for global investments. Our digital payment system has cut corruption, and government capex has increased to ₹12 lakh crore from ₹2/3 lakh crore. Our government comprises 60% SC/ST/BCs. It will be remembered as a welfare, caring and sensitive government for the common people,' he said. 'Under Prime Minister Narendra Modi, we have delivered a transparent, decisive and trustworthy governance,' he added.