Devyani (DEVYANI) Q3 25/26 earnings summary

Executive summary

• Consolidated revenues for Q3 FY26 reached INR 14,409 million, up 11.3% year-over-year, with India operations growing 12.1% YoY and international revenue up 10.1% YoY.

• Total store count stood at 2,279, with 54 net new KFC, 18 net new Pizza Hut, and 17 own brand stores added in the quarter; international business added 20 new stores.

• Break-even brand EBITDA achieved for Biryani By Kilo and Sky Gate brands ahead of guidance.

• Proposed merger with Sapphire Foods to create a platform with over 3,000 stores and nearly $1 billion turnover; board approved amalgamation effective 1 April 2026 with a share swap ratio of 177:100.

• Leadership transition announced: Manish Dawar to become President and CEO from April 2026, Anupam Kumar to become CFO.

Financial highlights

• Consolidated operating EBITDA for Q3 FY26 was INR 2,267 million, with margin at 15.7%; gross profit at INR 9,930 million, gross margin at 68.9%.

• Brand contribution margin improved to 13.9% from 11.7% in the previous quarter.

• Q3 FY26 profit after tax was a loss of INR 99.87 million, compared to a loss of INR 76.46 million in Q3 FY25.

• KFC India revenue was INR 6,032 million, up 5.9% YoY, with gross margin at 69.8%.

• Pizza Hut India revenue was INR 1,781 million, gross margin at 76%, and brand contribution at 0.8%.

Outlook and guidance

• No net new Pizza Hut units planned for 2026; focus on closing loss-making stores and utilizing existing assets.

• KFC store additions to continue at 110-120 stores per year; Pizza Hut additions to remain minimal.

• Merger with Sapphire Foods expected to deliver annual synergies of INR 210-225 crore.

• Board expects the next phase of growth to require bold strategic vision and strong execution.

• Management expects to maintain gross margin profile and sees further optimization opportunities.