Devyani (DEVYANI) Q1 24/25 earnings summary

Executive summary

• Added 54 new stores in Q1 FY25, reaching 1,836 stores as of June 30, 2024, with a target of 2,000 by year-end and focus on under-penetrated markets and customer experience.

• Consumer sentiment remained stable amid macroeconomic challenges and international conflicts, with innovative marketing and promotional campaigns launched to drive growth.

• Thailand business showed good growth post-acquisition, contributing to consolidated results and portfolio expansion.

• Unaudited financial results for the quarter ended 30 June 2024 were approved, with both standalone and consolidated statements reviewed by joint statutory auditors with unmodified opinions.

• The group operates in the food and beverages segment, with brands including KFC, Pizza Hut, Costa Coffee, and Vaango.

Financial highlights

• Operating revenue for Q1 FY25 was INR 12,219 million, up 16.7% sequentially and 44.3% year-over-year.

• Consolidated gross margin was 69.2%, flat sequentially; brand contribution margin improved to 15.3%.

• Consolidated reported EBITDA at INR 2,234 million, margin at 18.3%, up from 16.6% in Q4 FY24.

• Profit before tax at INR 305 million in Q1 FY25 versus a loss of INR 380 million in Q4 FY24; net profit after tax at INR 81 million.

• Consolidated profit after tax was INR 293.89 million, compared to a loss of INR 337.64 million in the same quarter last year.

Outlook and guidance

• Optimism for industry rebound during the festive season, with expectations of improved consumer sentiment and continued expansion.

• Targeting 100+ new KFC stores and 50-60 Costa Coffee stores in FY25, with a cautious approach to Pizza Hut expansion.

• Management remains confident in medium- and long-term growth prospects for the QSR sector in India.