Wednesday, March 11
Shares of Devyani International were trading around Rs 110.91, up 0.29% in early trade on Wednesday on the National Stock Exchange of India.
The stock is in focus after brokerage Goldman Sachs maintained a ‘Buy’ rating on Devyani International while retaining a ‘Neutral’ rating on Jubilant FoodWorks and Westlife Foodworld.
Brokerage positive on Devyani International
Goldman Sachs expects improving demand trends across the quick-service restaurant (QSR) sector, particularly for KFC franchise operators like Devyani International.
The brokerage noted that same-store sales growth (SSSG) momentum is improving for KFC franchisees and Westlife Foodworld.
According to the brokerage, fourth-quarter SSSSG for the QSR sector is likely to converge closer to Domino’s, indicating a gradual recovery in consumer demand.
Value offers boosting demand
Goldman Sachs highlighted that value-driven meal offers are supporting dine-in recovery across restaurant chains.
For example, the KFC Krisper meal priced at Rs 999 has reportedly helped drive higher customer transactions.
A low base from last year is also expected to support stronger same-store sales growth in the near term.
Seasonal tailwinds for March
The brokerage also pointed out that the shift in Ramzan timing is creating a more favourable base for restaurants during March, which could support improved sales momentum for the quarter.
However, Goldman Sachs cautioned that geopolitical disruptions remain a risk for the restaurant sector, as any economic uncertainty or consumer slowdown could affect discretionary spending.
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