Emkay Global Financial has given Buy recommendation for Devyani International with a target price of Rs. 210 in its research report issued on Feb 05, 2022

Emkay Global Financial’s report on Devyani International

Q3 performance was strong but largely in line. EBITDA grew 67% on a low base, led by 33% store count growth, 24% growth in rev/store and a 40bps margin improvement. Core brands, KFC/PH, saw ~64% rev growth on ~40% store count growth and a low ADS base. Healthy store additions continued, with 75/81 additions in Core brands/overall. DIL is now targeting the upper band of FY22 guided additions of 200-250, with 192 additions in 9M. DIL expects 200-250 annual additions beyond FY22, aided by correction in store metrics. Despite inflation, brand margins improved ~60/100bps QoQ for KFC/PH, helped by price hikes taken by KFC, better mix with more on-premise sales, and operating leverage. Going ahead, DIL expects PH format and operating leverage to drive gradual margin gains.


With the turnaround in profitability, DIL has earned the right to emerge as a QSR growth leader. It should see an industry-leading EBITDA CAGR of ~37% in FY22-25E, led by 21% store count CAGR, 7% SSG and gradual margin gains. Maintain Buy with a TP of Rs210.

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At 14:02 hrs Devyani International was quoting at Rs 169.55, up Rs 3.55, or 2.14 percent.

It has touched an intraday high of Rs 170.50 and an intraday low of Rs 167.60.

It was trading with volumes of 166,320 shares, compared to its thirty day average of 410,048 shares, a decrease of -59.44 percent.

In the previous trading session, the share closed down 3.21 percent or Rs 5.50 at Rs 166.00.

The share touched its 52-week high Rs 198.85 and 52-week low Rs 90.00 on 14 December, 2021 and 13 August, 2021, respectively.

Currently, it is trading 14.73 percent below its 52-week high and 88.39 percent above its 52-week low.

Market capitalisation stands at Rs 20,401.51 crore.

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