Devyani (DEVYANI) Q3 25/26 earnings summary

Executive summary

• Accelerated store expansion with 95 net new units in Q3 FY26, including 54 KFC, 18 Pizza Hut, and 17 own brand stores; total store count reached 2,279, including international additions.

• Achieved break-even brand EBITDA for Biryani By Kilo and Sky Gate Hospitality ahead of guidance.

• Announced proposed merger with Sapphire Foods, aiming to create a diversified F&B platform with over 3,000 stores and nearly $1 billion turnover.

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

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

Financial highlights

• Consolidated Q3 FY26 revenue grew 11.3% YoY to INR 14,409 million; India operations up 12.1% YoY, international revenue up 10.1% YoY.

• Consolidated operating EBITDA was INR 2,267 million (15.7% margin); brand contribution margin at 13.9%.

• Gross profit rose 11.7% YoY to INR 993 crore; gross margin improved to 68.9%.

• 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.

• YTD FY26 revenue from operations reached INR 41,746 million, up from INR 37,385 million YTD FY25.

Outlook and guidance

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

• KFC store additions to continue at 110-120 per year; strategy for KFC and Pizza Hut to be refined post-merger.

• Merger synergies estimated at INR 210-225 crore annually.

• Board approved a Scheme of Arrangement for the amalgamation of Sapphire Foods India Limited, effective 1 April 2026, with a share swap ratio of 177:100.

• Management expects to maintain gross margin profile and sees further optimization opportunities.