Devyani International Q2 PAT jumps 29% YoY to Rs 59 cr

On consolidated basis, Devyani International's (DIL) net profit surged 28.6% to Rs 58.76 crore on 44.8% jump in revenue from operations to Rs 747.43 crore in Q2 FY23 over Q2 FY22.

Consolidated profit before exceptional items stood at Rs 70.05 crore in quarter ended 30 September 2022, registering a growth of 46.36% from Rs 47.86 crore posted in Q2 FY22. The company reported an exceptional item of Rs 11.29 crore in Q2 FY23.

EBITDA improved by 34.23% to Rs 165.5 crore in Q2 FY23 from Rs 123.3 crore in Q2 FY22. EBITDA margin stood at 22.1% in Q2 FY23 as compared to 23.9% reported in same period last year.

The company's store network continues to expand across metro and non-metro cities. DIL opened 88 net new stores in Q2 FY23, which is the highest store openings recorded in a quarter, taking the total count to 1,096 as of 30 September 2022.

The core brand portfolio reported steady performance in Q2 FY23. KFC revenue grew by 47% year on year to Rs 443 crore, while Pizza Hut expanded by 36% year on year to Rs 1,81.2 crore.

Same-store sales growth (SSSG) of KFC and Pizza Hut was 13% and 3%, respectively.

Brand contribution at KFC came in at 21.5%, while Pizza Hut stood at 17%.

Commenting on the performance for Q2 & H1 FY23, Ravi Jaipuria, chairman, Devyani International, said, I am pleased to share that DIL has maintained its store expansion pace and opened 88 net new stores in the quarter - the highest ever. We are making consistent progress in expanding our reach and investing in our Core Brands to capitalize on the growth opportunities available. In line with our strategy, we have continued our focus on consolidating our presence in metro cities along with the expansion in non-metros towns. At the end of Q2, our total store count stood at 1,096 stores across our portfolio, with a split of 52% in non-metros and 48% in metro cities.

On the demand side, we have noticed that, as we are coming out of the pandemic, the consumer response is mixed for various categories. Continued retail inflation seems to have impacted the consumer demand to some extent in the staples and discretionary category. Although the inflation in input costs is stabilizing, the overall pricing levels continue to remain higher on a year on year basis. We have managed to take some judicious price corrections during early part of the financial year to protect the margins partially and are hoping that inflation will cool off as we go along, leading to enhanced consumer demand.

Devyani International is the largest franchisee of Yum Brands in India and are among the largest operators of chain quick service restaurants (QSR) in India, on a non-exclusive basis, and operate 884 stores across more than 224 cities in India, Nigeria and Nepal, as of 31 December 2021. In addition, DIL is a franchisee for the Costa Coffee brand and stores in India.

Shares of Devyani International declined 1.44% to Rs 184.70 on the BSE.

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