Street View: Prolonged recovery ahead for Indian Pizza Hut operator

Devyani International

12/02/2025 06:25

** Devyani International  DEVY.NS , which operates KFC and
Pizza Hut restaurants in India, falls 2.19% to 166 rupees
    ** Co's Q3 profit before tax drops 12% y/y amid dip in
same-store sales for Pizza Hut and KFC in a weak demand
environment
    
    WEAKEST SAME-STORE SALES AMONG PEERS; PIZZA HUT EXPANSION TO
MODERATE
    
    ** Ambit Capital ("sell"; PT: 142 rupees): DEVY reports
weakest same-store sales among peers in Q3, "recovery is
prolonged"
    ** Prefers rival Sapphire Foods  SAPI.NS , which also
operates Pizza Hut and KFC, on more attractive valuations
    ** Elara Capital ("buy"; PT: 215 rupees): Pizza Hut's
same-store sales decline of ~1% y/y already on a low base given
last year's ~12.6% drop
    ** Says Devyani to focus on improving unit economics,
moderately expand store count
    ** Emkay ("reduce"; PT: 170 rupees): While growth turnaround
is built into estimates, signs of initial recovery not seen yet
for rating upgrade
    ** Says co's average daily spend was flat y/y vs a moderate
increase reported by SAPI, in part due to DEVY's lower presence
in metros where demand was better

 (Reporting by Ananta Agarwal in Bengaluru)
 ((Ananta.Agarwal@thomsonreuters.com))