Devyani (DEVYANI) Q3 25/26 earnings summary

Executive summary

• Accelerated store expansion in Q3 FY26 with 54 net new KFC, 18 Pizza Hut, and 17 own brand stores, bringing the total to 2,279 as of December 31, 2025, including international additions in Thailand and Nepal.

• Achieved break-even brand EBITDA for Biryani By Kilo and Sky Gate brands ahead of guidance, reflecting successful turnaround efforts.

• Announced proposed merger with Sapphire Foods, aiming to create a diversified F&B platform with over 3,000 stores and nearly $1 billion turnover; board approved the amalgamation effective April 1, 2026, with a share swap ratio of 177:100.

• Leadership transition: CEO Virag Joshi to retire March 2026, Manish Dawar to become President & CEO, and Anupam Kumar to be CFO.

• Unaudited consolidated and standalone financial results for the quarter and nine months ended December 31, 2025, were approved, with limited review reports and an unmodified opinion.

Financial highlights

• Q3 FY26 consolidated revenue grew 11.3% YoY to INR 14,409 million; India operations up 12.1% YoY to INR 9,780 million; international revenue up 10.1% YoY to INR 4,734 million.

• Q3 FY26 consolidated gross margin at 68.9%, up 20 bps YoY; EBITDA margin at 15.7%; brand contribution margin at 13.9%.

• Q3 FY26 consolidated EBITDA was INR 2,267 million; reported EBITDA margin 15.7%.

• Q3 FY26 profit after tax was a loss of INR 99.87 million, compared to a loss of INR 76.46 million in Q3 FY25; nine-month net loss was INR 291.46 million.

• Standalone revenue for Q3 FY26 was INR 9,062.04 million, up from INR 8,725.87 million in Q3 FY25; standalone net loss was INR 122.95 million.

Outlook and guidance

• No net new Pizza Hut units planned for 2026; focus on closing loss-making stores and utilizing existing assets to reduce CapEx.

• KFC store additions to continue at 110-120 per year; Pizza Hut additions to remain minimal.

• Merger synergies estimated at INR 210-225 crore annually, expected to provide investment headroom for growth.

• Board expects the next phase of growth to require bold strategic vision and strong execution.

• Positive SSSG in January for most brands except Pizza Hut, where losses are being contained.