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    Devyani Intl.

    DEVYANI
    Consumer Services·21 May 2026
    Management Summary

    Devyani International reported a strong Q4 FY26, driven by robust performance in KFC and international markets, with consolidated revenue growing 18.5% YoY. The company is progressing with its merger with Sapphire Foods and transforming its management team for future growth. While Pizza Hut faced SSSG challenges, own brands showed positive momentum, and the company plans to add 200-225 new stores in FY27.

    Highlights

    5

    • Consolidated Q4 revenue grew 18.5% YoY to ₹1,437 crores, with FY26 revenue reaching ₹5,611 crores.

    • KFC posted 4.9% positive SSSG and nearly 15% year-on-year growth, with Q4 revenues of ₹586 crores and brand contribution of ₹99 crores (17.0% margin).

    • International business grew 20% year-on-year, crossing ₹500 crores in quarterly revenues, with brand contribution margins of 17.7%.

    • Own brands (Vaango, Biryani By Kilo) maintained mid-single-digit positive SSSG, and Biryani By Kilo achieved positive brand contribution.

    • The proposed merger with Sapphire Foods is on track for completion by the end of the current fiscal year.

    Concerns

    3

    • Pizza Hut reported a negative SSSG of 3.7% and slightly negative brand contribution due to operating deleverage.

    • Franchise Brands (Costa Coffee) experienced a 1.2% year-on-year decline in gross margins due to elevated coffee and cocoa prices.

    • The company decided to discontinue the Tea Live brand in the next quarter after testing in India and Thailand.

    Key financials

    Metrics

    8

    Periods

    2

    Headline

    6
    • Consolidated Q4 Revenue
      ₹1,437 Cr
      YoY+18.5%
    • Consolidated FY26 Revenue
      ₹5,611 Cr
    • Consolidated Operating EBITDA
      ₹123 Cr
      YoY+13.8%
    • Consolidated Operating EBITDA Margin
      8.6%
    • Consolidated FY26 Gross Margin
      68.8%

    FY26

    2
    • Total Stores
      2,256 stores
    • Net Store Additions
      217 stores

    Segment breakdown

    KFC
    4.9% SSSG₹586 Cr Q4 Revenue15% Q4 YoY Growth₹99 Cr Q4 Brand Contribution17% Q4 Brand Contribution Margin783 stores FY26 Stores (India)
    Pizza Hut
    -3.7% SSSG30,000 Rs ADS639 stores FY26 Stores
    Own Brands (Vaango, Biryani By Kilo)
    — SSSG— Biryani By Kilo Brand Contribution
    Franchise Brands (Costa Coffee)
    3% Revenue Growth-120% Gross Margin Decline16.1% Brand Contribution Margin
    International Business
    20% Q4 Revenue Growth₹500 Cr Q4 Quarterly Revenue17.7% Q4 Brand Contribution Margin₹89 Cr Q4 Brand Contribution
    List

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    within existing budgets for tech-related changes

    Debt

    Debt disclosed

    M&A

    Sapphire Foods

    merger · pending regulatory

    M&A

    Biryani By Kilo

    acquisition · integrated

    Guidance & targets

    4
    CategoryTargetPriority
    Store Count
    Net New Stores
    200 to 225
    		High
    Store Count
    KFC New Stores
    100 to 110
    		High
    Merger
    Completion of Sapphire Foods Merger
    by end of current financial year
    		High
    Management Team
    New Management Team in Place
    by next quarter
    		High

    Sapphire Foods Merger Completion

    by end of current financial year (FY27)
    CurrentProcess on track, filings completed, awaiting regulatory approvals
    TargetMerger completed

    Why it matters

    This is a major strategic combination expected to create one of the largest QSR platforms globally and drive future growth.

    We continue to expect completion of the merger by end of the current financial year.

    How to verify

    capital_allocation.m_and_a[target='Sapphire Foods'].status

    Risks & concerns

    3
    RiskSeverity

    Geopolitical tensions and macroeconomic instability

    Geopolitical tensions and macro issues are a reality, but they also lead to consolidation in the industry, putting pressure on small-scale players. The gas crisis, stemming from the Middle East war, continues to be monitored. — Management acknowledged

    medium

    Pizza Hut underperformance

    Pizza Hut recorded a negative SSSG of 3.7% and slightly negative brand contribution, requiring portfolio consolidation and operational discipline. — Management acknowledged

    medium

    Input cost inflation for Franchise Brands

    Elevated coffee and cocoa prices led to a 1.2% year-on-year decline in gross margins for Franchise Brands, despite steady revenue growth. — Management acknowledged

    low

    Q&A highlights

    8

    “We have hired Neeraj Tiwari, who is going to be the CTO for the company going forward. We have also hired Sandeep Anand as Chief Marketing Officer and he will also be looking after Pizza Hut operations. We have also made an announcement for the COO today. This gentleman also will be joining us in the next couple of weeks.”

    Details the new leadership hires and their roles, indicating a strategic focus on technology, marketing, and operations for future growth.

    asked by Devanshu Bansal

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q4 FY26 Performance Driven by KFC and International Growth

    Devyani International reported a robust Q4 FY26, with consolidated revenue growing 18.5% year-on-year to ₹1,437 crores, contributing to a full-year revenue of ₹5,611 crores. KFC was a standout performer, achieving its strongest results in 14 quarters with 4.9% positive Same-Store Sales Growth (SSSG) and a 15% year-on-year revenue increase to ₹586 crores. The international business also demonstrated significant growth, with revenues crossing ₹500 crores for the first time in a quarter, marking a 20% year-on-year increase.

    02

    Strategic Merger with Sapphire Foods on Track

    The proposed merger with Sapphire Foods is progressing as planned and is expected to be completed by the end of the current financial year. This strategic combination aims to create one of the largest QSR platforms globally, enhancing operational capabilities, diversifying the brand portfolio, and expanding geographic reach. Management anticipates significant synergies and accelerated growth post-merger.

    03

    DIL 2.0 Transformation and Leadership Reinforcement

    The company is embarking on 'DIL 2.0,' a transformation journey led by a strengthened management team. Key hires include a new CTO (Neeraj Tiwari), CMO (Sandeep Anand, also overseeing Pizza Hut operations), and a COO. This initiative focuses on leveraging technology, automation, and AI to enhance efficiency, scalability, and customer experience, with over 80% digital kiosk penetration already achieved across KFC stores.

    04

    Mixed Performance in Key Brands and Store Expansion Plans

    While KFC and own brands (Vaango, Biryani By Kilo) showed positive SSSG, Pizza Hut recorded a negative SSSG of 3.7% and slightly negative brand contribution. The company plans to add 200-225 net new stores in FY27, with KFC contributing 100-110 stores. Pizza Hut will focus on portfolio consolidation and realignment in calendar year 2026, with no net new store additions. The Tea Live brand will be discontinued in the next quarter.

    05

    Focus on Dine-in Experience and Operational Discipline

    Management highlighted a strategic shift to prioritize the dine-in experience, offering better deals at the store level to attract customers, which has contributed to KFC's SSSG. This approach, coupled with disciplined execution, aims to protect unit economics and maintain financial prudence. The company is also actively managing input costs, such as the impact of the gas crisis, by exploring alternatives like electrical equipment for Biryani By Kilo.

    06

    Biryani By Kilo Turnaround and Future Potential

    Biryani By Kilo, previously a loss-making brand, has successfully achieved positive brand contribution. The company is bullish on its future, having initiated measured expansion into offline channels through test launches of smaller Express formats, which have shown profitability. This brand is expected to be a significant growth driver once its performance stabilizes.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.