'DIL-Sapphire Foods merged entity to cross $1 billion annual revenue'

The merged entity will have more than 3,000 stores globally and a turnover of approximately Rs 8,000 crore on an annualised basis

The combined entity formed from the merger of Devyani International (DIL) and Sapphire Foods India (SFIL) is likely to cross an annualised revenue mark of $1 billion, DIL non-executive chairman Ravi Jaipuria told analysts on Tuesday.

 

The board of directors of DIL and SFIL, on January 1, approved to merge the latter into Devyani, creating a single unified Yum! India franchise for KFC and Pizza Hut.

 

The merger between the two Yum! India franchise holders makes it the largest quick service restaurant (QSR) with a portfolio of marquee brands such as KFC, Pizza Hut, Costa Coffee and Biryani By Kilo among others.

 

The merger is expected to take 12-15 months to complete.

 

“India’s food and beverage market is large, getting formalised and expanding rapidly, with independent estimates placing the broader food services market at more than $100 billion and the QSR (quick service restaurant) segment alone at more than $25 billion and growing. By the time the merger gets consummated, the merged entity is likely to cross $1 billion in annual revenues,” Jaipuria told investors.

 

The merged entity will have more than 3,000 stores globally and a turnover of approximately ₹8,000 crore on an annualised basis.

 

“The merged entity will sit at the intersection of scale, brand, strength and market access. We are creating a unified franchise partner for global brands that can deploy capital, talent and technology across a national footprint with unparalleled speed and consistency,” Jaipuri added.

 

According to an earlier release, the merged entity will focus on accelerating expansion of KFC, strengthening and revitalising Pizza Hut for long-term sustainable growth, while scaling growth of the DIL emerging brands portfolio.

 

“Priority is to turn around the business. Our priority is to put Pizza Hut back to its old glorious day where it used to be the market leader,” company executives said.

 

“We will not be under stress to open new units from where we are today. What we’ve negotiated is a very small number that can be easily achieved. We will have the full flexibility to shut the stores and turn around the stores and put new stores in place…in a much faster way so that we are able to achieve results faster,” DIL said, adding that Pizza Hut’s brand contribution margin will come closer to KFC.

 

“Our ambition is straightforward, to build the preferred long-term home for global QSR brands in India and to convert India’s structural demand tailwinds into sustained disciplined growth,” Jaipuria added.