Ranvir’s Portfolio

Devyani International ( master franchise of KFC, PizzaHut, Costa Coffee )- H1 / Q2 highlights –

Have opened 115 new stores in H1 taking the total store count to 1358. Company has stores in over 240 cities / towns in India

H1 sales @ 1666 cr, up 15 pc
Gross Margins @ 71 vs 70.5 pc YoY
EBITDA @ 332 vs 330 cr (margin @ 19.9 vs 22.7 pc )
Adjusted PAT – 93 vs 136 cr (adjusted for currency devaluation of Rs 61 cr in Nigeria business)

Brand wise sales breakdown –

KFC – 1025 cr, up 18 pc
Pizza Hut – 367 cr, up 6 pc
Costa – 67 cr, up 69 pc
Rest – others like Vango etc

New stores opened in H1 –

KFC – 50
Pizza Hut – 29
Costa Coffee – 34
Vaango – 01

Total overseas stores –

KFC – Nigeria – 38
KFC – Nepal – 22

Nigeria facing severe economic head winds. Company may have to support its Nigerian operations for some time to come (1-2 yrs)

Aim to reach 2000 stores by 2026 end. To open another 150 odd stores this year

Current stores breakdown –

KFC – 594
Pizza Hut – 539
Costa Coffee – 146
Rest – others like Vaango

Q2 is generally a seasonally weak Qtr. High food inflation also had a dampening effect on QSR industry in Q2

Seeing good demand on the days of big WC matches. As such, Q3 is a good Qtr

Company has formed a JV with RK associates and Hoteliers to tap the Railway modernisation plan of GoI by setting up new Outlets at the Station’s food courts

Company has announced a deal with PVR to Open Costa Coffee outlets at their premises. Contours of the deal are not fully known

Expecting an EBITDA margin uptick of 2-3 percentage points once the inflationary pressures are gone and consumer sentiment improves

Vaango currently contributes to 3 pc of sales

Yum brands ( the owner of KFC, Pizza Hut, Costa Coffee brands ) also spends on Marketing to help the company specially when the demand scenario is weak

Disc: hold a small tracking position, biased, may add more if the company performance improves in Q3/Q4, not SEBI registered