Devyani Industries Ltd – Q1FY26 Result Update

In Q1FY26, Devyani International Limited reported consolidated revenue of Rs. 13,570 million, up 11.9% QoQ / up 11.1% YoY. The demand scenario remained subdued in Q1FY26, but revival in demand is expected, led by the rising urbanisation, growing income levels, increasing digital adoption, and an increase in the female work participation rate. KFC reported revenue of Rs. 6,126 million a growth of 10.5% YoY, but SSSG declined by 0.7% due to weak consumer demand coupled with the Shravan month, with ADS dropping by 5.8% YoY to Rs. 98,000/-, though the brand continued its expansion by adding eight new stores this quarter, bringing the total store count to 704, underscoring its commitment to long-term growth. Pizza Hut registered revenue of Rs. 1,873 million, a growth of 3.0% YoY and SSSG declined by 4.2%, with a decline in ADS of 8.3% YoY to Rs. 33,000/-, due to weak consumer demand and intense competition. The management closed 12 stores during Q1FY26, bringing the store count to 618, and guided that future store expansion will be subject to improvements in SSSG and ADS. Costa Coffee’s performance improved with a 14.1% YoY revenue growth to Rs. 519 million, but the ADS was impacted by 7.1% YoY to Rs. 26,000/-. Costa Coffee added two stores in Q1FY26, bringing the total count to 222. Internationally, the company’s revenue grew by 11.2% YoY to Rs. 4,332 million. The company added one KFC store in Thailand and two in Nepal. The company’s gross margin stood at 68.2%, down 32 bps QoQ / down 97 bps YoY, due to high raw material prices. The EBITDA was Rs. 2,060 million, with an EBITDA margin of 15.2%, down 16 bps QoQ / down 248 bps YoY due to higher promotion activities. The net profit registered for Q1FY26 was Rs. 24 million, down 89.2% YoY. The company completed its acquisition of a controlling stake in Sky Gate Hospitality (Biryani By Kilo and other brands).