Company Overview

Devyani International Limited (DIL), a leading Quick Service Restaurant operator and Yum Brands franchise partner, reported mixed financial results for FY 2025-26 alongside significant strategic developments. The company filed its 35th Annual General Meeting notice, consolidated and standalone financial statements, and disclosed major corporate actions including a transformative merger.

Financial Performance

Consolidated Results (₹ millions)

  • Revenue from Operations: ₹56,115 (13.3% YoY growth from ₹49,511)
  • EBITDA: ₹8,554 (15.2% margin)
  • Net Loss: ₹425 (versus ₹69 million loss in FY25)
  • Total Assets: ₹67,500 (up from ₹53,386)
  • Basic EPS: ₹(0.31)

Standalone Results (₹ millions)

  • Revenue from Operations: ₹35,726 (6.7% growth)
  • Net Loss: ₹331 (versus profit of ₹237 in FY25)
  • Total Investments in Subsidiaries/JVs: ₹9,213
  • Exceptional Items: ₹209 (retiral benefits and lease disputes)

Operational Highlights

Store Network Expansion

  • Total Global Stores: 2,256 (1,857 in India, 399 international)
  • KFC Network: 1,169 restaurants across four countries
  • Employee Strength: 22,500+ globally

Brand Performance

  • KFC India: Revenue ₹23,737 million (8.9% growth), Q4 SSSG recovery to 4.9%
  • Pizza Hut India: Revenue ₹7,206 million, challenging SSSG of -5.3%
  • International Business: Revenue ₹18,594 million (13.8% growth), 17.1% Brand Contribution margin

Strategic Developments

Sapphire Foods Merger

  • Announced January 1, 2026, to consolidate KFC and Pizza Hut operations in India
  • Expected to create one of Yum's largest global franchise partners with 3,000+ restaurants
  • Projected annual revenues approaching USD 1 billion
  • Expected synergies of ₹2-2.25 billion annually post-integration
  • Appointed date: April 1, 2026; subject to regulatory approvals

Sky Gate Hospitality Acquisition

  • Acquired 80.72% equity stake on June 10, 2025 (₹4,196 million consideration)
  • Became wholly-owned subsidiary by March 7, 2026
  • Successfully turned around Biryani by Kilo and Goila Butter Chicken brands to break-even profitability ahead of schedule
  • Achieved mid-single-digit positive SSSG for Biryani by Kilo
  • Recognized goodwill of ₹1,705 million and brands intangible of ₹4,947 million

Corporate Actions & Capital Structure

Capital Raising

  • Preferential Allotment: Issued 23.7 million equity shares at ₹176.78 per share (₹419.3 crore) for Sky Gate acquisition
  • ESOP Allotment: Issued 2.96 million equity shares under ESOS 2021
  • Preference Shares: Allotted 300,000 Non-convertible Redeemable Preference Shares of ₹1,000 each (₹30 crore)

Structural Changes

  • Registered Office Shift: From Delhi to Gurugram, Haryana (approved March 20, 2026)
  • Authorized Capital Reclassification: Changed to 467.5 million equity shares of ₹1 each and 1 million Preference Shares of ₹1,000 each
  • CIN Change: From L15135DL1991PLC046758 to L15135HR1991PLC143853

Management & Governance

Board Changes

  • Mr. Virag Joshi superannuated as Whole-time Director (President & CEO) effective March 31, 2026, continuing as Non-executive Director
  • Mr. Manish Dawar elevated as Whole-time Director (President & Group CEO) effective April 1, 2026
  • Mr. Anupam Kumar appointed as Chief Financial Officer effective April 1, 2026
  • Board comprises 10 Directors with 5 Independent Directors

Auditors & Compliance

  • Joint Statutory Auditors: Walker Chandiok & Co LLP (reappointed until 2030) and O P Bagla & Co LLP (until 2027)
  • Secretarial Auditors: M/s. Sanjay Grover & Associates (until 2030)
  • Reliance on other auditors for subsidiary financial statements
  • Qualifications in CARO reports for holding company and Sky Gate
  • No material orders passed by regulators/courts impacting going concern

Subsidiaries & Investments

Material Subsidiaries

  • Devyani International DMCC
  • Restaurants Development Co., Ltd.
  • Sky Gate Hospitality Private Limited (wholly-owned)

Investment Activity

  • Total Investments: ₹9,213 million in subsidiaries and joint ventures
  • Devyani International DMCC: ₹3,427 million (51% equity stake)
  • RV Enterprizes Pte. Limited: ₹113 million (87.31% equity stake)
  • Devyani PVR Inox Private Limited: ₹33 million (51% joint venture)

CSR & Sustainability

  • CSR Spending: ₹17.71 million on National Apprenticeship Promotion Scheme
  • Apprentices Supported: 528 under skill development initiative
  • ESG Performance: 30.5% female representation, 229 women-managed restaurants
  • Environmental Initiatives: Solar installations, energy-efficient operations, sustainable packaging

Forward Outlook

The company faces challenges from continued losses but is positioned for growth through the Sapphire merger integration, expected synergies, and turnaround of acquired brands. The transformational merger aims to create scale benefits and operational efficiencies, while store expansion continues across domestic and international markets. Regulatory approvals for both amalgamation schemes (Sky Gate and Sapphire) remain key milestones for FY27.