Weak SSSG drags profitability

Company
11 Mar 2024
5 Min read 
  • Devyani International reported a 6.6% YoY revenue growth, but weak SSSG dragged profitability.
  •  KFC revenue grew 14% YoY, while Pizza Hut revenue contracted 2%.
  •  Consolidated restaurant EBITDA contracted 11% YoY to INR1.3b, with a margin dip of 290bp YoY to 15.4%.
  •  Store expansion plans remain on track, with a target of reaching 2,000 stores by FY24.
  •  The stock has seen a recent correction, partially covering the near-term pressure.
  •  The BUY rating is reiterated with a TP of INR195.
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