Devyani International's Q4 Net Loss Narrows to Rs 10 Crore Amid Same-Store Sales Growth
Devyani International Posts Smaller Quarterly Loss Amid Strong KFC Sales
Devyani International, the operator of KFC and Pizza Hut outlets, reported a consolidated net loss of Rs 10 crore for the quarter ended March 31, compared to a loss of Rs 14.7 crore a year ago. This smaller quarterly loss comes as strong same-store sales growth at KFC outlets and higher revenue helped offset higher costs.
India's quick-service restaurant (QSR) sector is currently battling weak urban demand, prompting chains to rely on discounts, promotions, and value meals to drive traffic. However, Devyani International's results suggest that the company's focus on value-led offerings and customer engagement campaigns has helped sustain sales at KFC. The disruptions linked to the recent cooking gas shortage due to the Middle East conflict had a minimal impact on operations.
Brokerage Elara Capital has predicted that a sustained recovery in dine-in demand could meaningfully boost earnings for QSR operators, including Devyani International. The company added 217 net new stores during the financial year, taking its total store count to 2,256 as of March-end.
| Quarter | QSR Sales Growth | Revenue Growth |
|---|---|---|
| Q4 FY23 | 4.9% (KFC) | 18.5% (Revenue from operations) |
| Q4 FY23 | -3.5% (Pizza Hut) | 14.6% (KFC revenue) |
| Q4 FY23 | - | 3.5% (year-on-year decline) |
Revenue from operations rose 18.5% to Rs 1,437 crore for the reported quarter. Despite a decline in Pizza Hut India's revenue, which fell 3.5% year-on-year during the quarter, the company's other income rose to Rs 14.1 crore from Rs 13.1 crore a year ago.
Total expenditure, including finance cost, was Rs 1,469 crore compared with Rs 1,248 crore a year ago. Finance cost was at Rs 70 crore as against Rs 69.5 crore a year ago. The company reported a tax write-back of Rs 4.7 crore for the March quarter, as against Rs 5.6 crore a year ago.
Shares of Devyani International, which were down as much as 1.9% before the results, trimmed losses and were last up 0.13%.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Investor Takeaway
Devyani International's Q4 net loss narrows to Rs 10 crore amid same-store sales growth.
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