On Tuesday, Devyani International Ltd, a quick service restaurant (QSR) operator, announced a 37 percent decrease in its combined net profit for the July-September quarter, amounting to INR 35.82 crore, primarily attributed to the adverse effects of elevated inflation on consumer sentiment.
As the foremost franchisee of Yum! Brands in India for its Pizza Hut and KFC brands, the company had posted a net profit of INR 56.83 crore during the July-September quarter of the previous year.
According to a filing with the stock exchange, Devyani International Ltd (DIL) saw a 9.63 percent increase in its revenue from operations for the quarter, reaching INR 819.47 crore, compared to INR 747.42 crore in the corresponding period of the previous year.
“High inflation across industries and categories from a macro-economic perspective has led to a short-term impact on consumer sentiment and spending in the last few quarters. Despite this, our performance remains resilient, and we continue to invest in the business for long-term growth,” said DIL Non-Executive Chairman Ravi Jaipuria.
During the September quarter, DIL’s total expenses amounted to INR 793.04 crore, reflecting a 16.30 percent increase.
In the September quarter, DIL reported that KFC generated INR 509 crore in brand revenue, Pizza Hut contributed INR 184 crore, and Costa Coffee added INR 34.6 crore to their revenue. Additionally, it’s worth noting that DIL is the franchise holder for The Coca-Cola Company’s coffee chain brand, Costa Coffee.
DIL’s total income for the September quarter amounted to INR 826.04 crore, showing a year-on-year increase of 9.85 percent.
“The Company expanded its presence across brands and geographies, opening 68 net new stores in Q2 FY24,” it said.
As of September 30, 2023, DIL oversees a combined total of 1,358 system stores across various geographies, comprising 594 KFC stores, 539 Pizza Hut outlets, and 146 Costa Coffee establishments.
It is “on track to open 250-275 new stores in FY24,” said DIL.
“We are hopeful that a rebound in consumer spending will take place in the next few quarters, positioning us for success in the dynamic and evolving QSR landscape,” said Jaipuria.
Shares of Devyani International Ltd on Tuesday settled at Rs 193.05 on BSE, up 1.87 per cent from the previous close.