Transcript of Earnings call held on May 23, 2025
Awaiting price reaction for this filing.
Devyani International reported FY25 consolidated revenue of Rs. 4,951 crore, up 39.2% YoY, driven mainly by the Thailand KFC acquisition and store expansion. EBITDA margin was 17% (vs 18.3% in FY24), with absolute EBITDA rising 29.1% to Rs. 842 crore. Total store count reached 2,039 after adding 257 new stores, with KFC India adding 100 stores (total 696). KFC India ADS fell to Rs. 94,000 (from Rs. 105,000), hitting a low of Rs. 83,000 in Q4 due to bird flu impact in Andhra Pradesh/Telangana and geopolitical issues in Kerala/West Bengal. Management called Q4 the trough and expects sequential improvement, guiding that 100,000-105,000 ADS is the new normal (vs 120,000-125,000 earlier) while still targeting ~20% brand contribution margin. The company announced acquisition of Sky Gate Hospitality (Biryani By Kilo, Goila Butter Chicken) at Rs. 519 crore equity value for 80.72% stake, plus Rs. 90 crore cash infusion, with turnaround expected within one year. Plans to add 110-120 KFC stores in FY26.
Margin pressure remains the near-term concern as KFC same-store sales stay negative, but the management's 'new normal' reset of ADS expectations and margin preservation at current levels suggests bottoming out. The Sky Gate acquisition adds a high-potential but currently loss-making business, while aggressive international brand additions (New York Fries, Tealive, Sanook Kitchen) expand the portfolio but raise execution risk. Shareholders should watch for KFC recovery in the four stressed states and Sky Gate's path to profitability over the next 12 months.