Devyani (DEVYANI) Q1 26/27 earnings summary

Executive summary

• Q1 FY27 began with strong momentum, led by KFC's double-digit sales growth and positive SSSG across most brands, with consolidated revenue at INR 15,805.16 million.

• Highest ever EBITDA achieved at INR 2,548 million (16.1% of revenues), reflecting improved profitability despite inflationary pressures.

• Consolidated net profit after tax from continuing operations was INR 171.04 million, up from INR 24.22 million YoY.

• The merger with Sapphire Foods is progressing on schedule, with regulatory approvals from NSE and BSE received.

• New leadership team is fully in place, driving operational and cultural transformation under the DIL 2.0 initiative.

Financial highlights

• Consolidated revenue grew 16.5% YoY to INR 15,805 million, with India revenue at INR 10,709 million (+14.9% YoY) and international revenue at INR 5,230 million (+20.7% YoY).

• Gross margin improved by 0.9% YoY to 69.1%; EBITDA margin at 16.1%, up 100 bps YoY.

• Reported EBITDA at INR 2,548 million (+24.4% YoY); highest PBT in 8 quarters at INR 229 million.

• Brand contribution margin expanded to 14.2%, with brand contribution at INR 224 crore, up 26% YoY.

• Basic and diluted EPS from continuing and discontinued operations was INR 0.12 for the quarter.

Outlook and guidance

• Focus remains on disciplined, profitable growth, opening new stores as per guidance, and maintaining positive SSSG.

• SSSG for KFC targeted at 5%-6% annually, with margin improvement driven by higher ADS and operational efficiency.

• BBK is targeted to become a INR 1,000 crore brand in the next few years.

• Merger with Sapphire Foods expected to complete by end of FY27.

• Management remains cautious due to volatile operating environment and potential impact from below-normal season and El Niño risk.