Sharekhan has given Buy recommendation for Devyani International with a target price of Rs. 231 in its research report issued on Sep 05, 2022

Sharekhan’s research report on Devyani International

Improving footfalls, a large shift to branded products, strong expansion plan of 250-300 stores per annum and expansion of digital reach will help revenues clock a 43.1% CAGR over FY2022-24. Exit from loss-making stores, improving unit-level profitability, cross-branding and a rise in transactions through value proposition will help DIL consistently improve EBIDTA margins that are likely to increase to ~24% by FY24 from ~17% in FY20. Strong operational show and efficient capital allocation with reduction in store size for core brands would help company to generate strong free cash flows in the coming years (cumulative FCF of Rs. 350 crore over FY21-24).


We initiate coverage on Devyani International Ltd (DIL) with a Buy and PT of Rs. 231. It trades at 28.3x/20.6x its FY2023E/24E EV/EBITDA. Riding on strong brand equity and a wide presence, DIL hopes to outpace the industry in the medium to long run.

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