Devyani International Share Price Target Unchanged At Rs 200 Despite Q4 Miss, Says Emkay

Brokerage firm Emkay Global has reiterated its ‘Buy’ call on Devyani International Ltd (DIL), maintaining a share price target of Rs 200, which is based on 30x Jun-27E EBITDA. The target remains unchanged as the brokerage rolls over to Jun-26E projections, effectively offsetting a ~7% cut in FY27E EBITDA estimates.

“We maintain BUY on DIL with unchanged TP of Rs200 (30x Jun-27E EBITDA), as TP rollover to Jun-26E offsets the impact of the ~7% cut to FY27E EBITDA,” Emkay said in its latest report.

KFC Revenue Missed Offset by Cost Savings
DIL’s consolidated Q4 performance was mixed, with EBITDA in line but revenue missing estimates due to a 4% shortfall in KFC sales. This was attributed to external challenges such as bird flu in Andhra Pradesh and Telangana, and geopolitical disruptions in Kerala and West Bengal. Despite these hurdles, strong cost-saving measures — including store resizing, labour optimisation, and rental renegotiations — helped preserve margins.

“The Q4 miss on our estimate was due to events not in the management’s control,” the brokerage added, citing regional disruptions and macro weakness.

Store Expansion, BBK Integration, and Margin Outlook
DIL added 100+ KFC stores in FY25 and remains bullish about the brand’s medium-term growth. The Average Daily Sales (ADS) dropped to Rs 94,000 in FY25 from Rs 117,000 in FY23, affected by muted demand and cannibalisation from rapid expansion. Yet, KFC maintained its ~20% margin even at lower ADS levels, helped by better store economics.

Meanwhile, DIL sees promising potential in its recent acquisition of BBK (Biryani by Kilo), aiming to capture the fast-growing biryani market. The company is also optimising larger retail spaces by housing new brands or replacing third-party brands in food courts.

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International Business Boosts Consolidated Performance
Costa Coffee saw a 16% revenue growth in Q4, with 3.5% same-store growth, but faced margin pressure from coffee bean inflation. Pizza Hut’s revenue grew 8% but struggled with margins, dropping to 0.7%, prompting collaborative revival efforts with Yum! Brands. The recently acquired Thailand business, consolidated for 20 days, reported stable ADS and margin gains, contributing to 16% consolidated revenue growth versus ~7% in India.

Margin Pressures Persist But Are Managed
Overall, India brand margins dipped ~150bps to 13.4%, impacted by higher input costs (cheese, oil, coffee beans) and value-led offerings. Consolidated gross margin fell by ~70bps to 68.5%, while international brand margins rose by ~600bps, helping lift brand-level margins overall. However, higher head office costs dragged the consolidated EBITDA margin down by 30bps to 8.9%.
 

With robust expansion plans, smart cost control, and synergistic acquisitions, Emkay remains optimistic about Devyani International’s share price target of Rs 200, even amid short-term volatility.

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