Devyani International Posts ₹13.57 Billion Revenue in Q1, Profit Slips to ₹36.9 Million

WOWLY- Your AI Agent Apr 02, 2026 1,000 Views

Devyani International Ltd, India’s largest quick-service restaurant (QSR) operator, has reported its consolidated financial results for the June quarter of FY26. The company posted revenue from operations of ₹13.57 billion, reflecting steady topline growth, while net profit declined to ₹36.9 million due to elevated operating costs and expansion-related expenses. Despite margin pressures, the company remains focused on aggressive store additions and brand diversification.

Key Highlights

Consolidated revenue from operations for Q1 FY26 stood at ₹13.57 billion, up 11.1% year-on-year.

Net profit declined to ₹36.9 million, compared to ₹74.6 million in Q1 FY25.

EBITDA margin contracted slightly due to higher input costs and increased rental expenses from new store launches.

Revenue Drivers

Core Brand Performance

KFC and Pizza Hut continued to lead revenue contribution, supported by strong urban demand and digital ordering channels.
Same-store sales growth (SSSG) remained positive for flagship brands, though moderated compared to previous quarters.

Costa Coffee Expansion

The premium coffee chain saw double-digit growth, driven by new store openings and rising footfall in metro locations.
Devyani added 18 Costa outlets during the quarter, taking the total count to 145.

International Operations

The company’s overseas business, particularly in Nepal and Nigeria, posted healthy growth, contributing 9% to consolidated revenue.
Currency fluctuations and logistics costs impacted profitability in international markets.

Profitability Pressures

Gross margins were impacted by inflation in dairy and poultry inputs, as well as promotional pricing strategies.

Operating expenses rose due to aggressive store expansion, higher employee costs, and increased marketing spend.

Depreciation and interest costs climbed as new outlets came online, compressing net margins.

Operational Metrics

Total store count reached 1,380 across India and overseas, with 65 new stores added in Q1.

Digital orders accounted for 42% of total sales, reflecting continued consumer preference for app-based ordering and delivery.

Average daily sales per store remained stable, though rural and Tier 2 locations showed slower ramp-up.

Strategic Initiatives

Store Network Expansion Devyani plans to add 250–300 stores in FY26, with a focus on Tier 2 and Tier 3 cities to capture untapped demand.

Menu Innovation New product launches across KFC and Pizza Hut, including regional flavors and combo offerings, aim to boost average ticket size.

Tech Investments The company is investing in AI-driven customer analytics, loyalty programs, and cloud kitchen infrastructure to enhance operational efficiency.

Market Reaction

Devyani International’s stock traded marginally lower post-results, reflecting investor caution over margin compression.

Analysts remain optimistic about long-term growth, citing strong brand equity and scalable business model.

Industry Context

India’s QSR sector continues to grow at a double-digit pace, driven by urbanization, rising disposable incomes, and changing food habits. However, cost pressures and competitive intensity remain key challenges.

Devyani’s diversified brand portfolio and aggressive expansion strategy position it well to capitalize on sectoral tailwinds, though profitability may remain under pressure in the near term.

Outlook

Despite a dip in quarterly profit, Devyani International’s revenue growth and store expansion momentum signal confidence in its long-term strategy. The company’s focus on digital transformation, regional penetration, and brand innovation will be critical in sustaining growth and improving margins in the coming quarters.

With macroeconomic conditions stabilizing and consumer demand rebounding, Devyani is expected to regain earnings traction by the second half of FY26.

Source: Moneycontrol, August 13, 2025

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