On BSE, Devyani shares closed at ₹185.85 apiece down by ₹10.20 or 5.20%. The shares have touched an intraday low of ₹182.50 apiece. Overall, in the day, the shares slipped by 6.91% on the exchange.
The company's market cap is around ₹22,390.03 crore.
As per BSE data of block deals on August 23, Dunearn Investments (Mauritius) sold 26,329,516 equity shares in Devyani at ₹183.11 per share. The transaction aggregated around ₹482.12 crore.
According to the shareholding pattern on BSE, as of June 30, 2022, Dunearn had held 9.83 crore equity shares or an 8.13% stake in the company.
Earlier this month, Devyani announced its financial performance for the first quarter ending June 30, 2022 (Q1FY23).
In Q1FY23, Devyani registered a consolidated net profit of ₹74.76 crore compared to a loss of ₹33.41 crore in Q1FY22. Consolidated revenue stood at ₹704.72 crore in Q1FY23 against ₹352.75 crore in Q1 of the previous fiscal.
During the quarter, the company recorded strong performance across its core brands. Also, strong store additions coupled with early signs of revival in demand supported growth. This was also the first quarter without any Covid-related disruptions.
As of June 30, 2022, the company has opened 70 net new stores in its portfolio. By end of Q1FY23, the company operates 391 KFC stores, 436 Pizza Hut stores, and 69 Costa Coffee stores in India. Including the own brands’ stores and international markets, total system stores stand at 1,008.
Should you invest in Devyani International shares?
In their research note, Jaykumar Doshi and Umang Mehta research analysts at Kotak Institutional Equities said, "We upgrade FY2023-25E EBITDA estimates by 9% as we raise store addition and margin forecast. The stock is trading at 35/29X FY2024E/25E EV/EBITDA and 63X/50X PE on estimates that bake in 38% EBITDA CAGR over FY2022-25E. Rising competition in fried chicken (McDonald’s and Popeyes) poses downside risks to our estimates whereas turnaround of Pizza Hut presents upside risks. We like the story but downgrade to REDUCE from ADD owing to full valuations (revised FV Rs179)."
On the other hand, Devanshu Bansal and Jigisha Kapoor analysts at Emkay Global said, "With turnaround in profitability, DIL has ensured faster growth than in the past. DIL should deliver a strong EBITDA CAGR of ~42% over FY22-25E, led by a 22% store count CAGR, 11% SSG, and gradual margin gains. Our improved margin expectations should offset the impact of 8-9% inflation in CAPEX, leading to no major change in our ROIC expectations ~40% by FY25E. We maintain Buy with a TP of Rs225 (36x Sep’24E EBITDA vs. 37x Jun’24E earlier). Multiple cut is driven by 3M rollover."
Devyani International is the largest franchisee of Yum Brands in India and is among the largest operators of chain quick service restaurants (QSR) in India, on a non-exclusive basis. Its stores are across 215 cities in India, Nigeria, and Nepal, as of June 30, 2022. In addition, DIL is a franchisee for the Costa Coffee brand and stores in India.
Yum Brands operates brands such as KFC, Pizza Hut, and Taco Bell brands and has a presence globally with more than 54,000 restaurants in over 155 countries.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
