Macquarie has reiterated its Outperform rating on Devyani International Ltd. (DIL), setting a target price of ₹230, as it remains optimistic about long-term growth potential despite short-term headwinds. The brokerage sees Devyani as a preferred play in the restaurant industry, particularly in light of proposed tax reductions in the upcoming budget, which could spur higher consumer spending in the QSR (quick-service restaurant) sector.
Devyani, the largest Yum! Brands franchisee in India, operates KFC, Pizza Hut, and Costa Coffee across the country. Macquarie highlights KFC India and Thailand as key growth drivers, along with upside potential from other brands in its portfolio. While near-term performance may be subdued due to demand moderation, the brokerage remains constructive on its outlook, expecting stronger same-store sales growth (SSSG) of 10-11% over the coming years.
This anticipated growth in SSSG is expected to drive significant margin expansion, supporting the thesis that Devyani’s stock price could potentially double by FY28. The company’s focus on store expansion, menu innovation, and cost efficiencies positions it well to capitalize on the structural growth opportunity in India’s QSR industry.
About Devyani International Ltd.:
Devyani International is one of India’s leading QSR operators, operating multiple international brands across India, Nepal, and Nigeria. As the largest franchisee for Yum! Brands in India, it has been instrumental in expanding KFC, Pizza Hut, and Costa Coffee outlets. Devyani’s business model focuses on rapid store expansion, digital transformation, and delivery growth, making it a key player in India’s growing foodservice market.
