Devyani International Q4 FY26 Earnings

Devyani International announced its Q4 and full fiscal year 2026 financial results on May 15, 2026. The company posted consolidated revenues of INR 1,437 crore for Q4 FY26, marking an 18.5% year-on-year increase. Full-year revenues reached INR 5,611 crore.

KFC Leads Growth Amid Mixed Brand Performance

Key highlights from the quarter include robust Same-Store Sales Growth (SSSG) of 4.9% for KFC, its highest in 14 quarters. KFC's revenue for the quarter was INR 586 crore, with brand contribution up nearly 20% to INR 99 crore and margins at 17.0%. In contrast, Pizza Hut experienced an SSSG of -3.7%, although its Average Daily Sales remained stable at around INR 30,000 per store.

Merger Progress and Strategic Overhaul

The company is making progress on its planned merger with Sapphire Foods, another major Quick Service Restaurant (QSR) operator. This merger is expected to be completed by the fiscal year-end, aiming to create a larger, more integrated QSR platform. Alongside this, Devyani International is implementing its 'DIL 2.0' strategy. This initiative involves new leadership hires in operations and strategy, intended to enhance operational efficiency and drive digital transformation across the business.

International Business Expansion

Devyani International's international operations also showed strong momentum, with quarterly revenues crossing INR 500 crore for the first time, representing a 20% year-on-year growth.

Store Network Expansion Continues

The company added 217 net new stores during FY26, bringing its total store count to 2,256 by the end of the fiscal year. For FY27, Devyani International plans to add another 200-225 net new stores, with KFC slated for significant expansion.

Pizza Hut's Strategic Realignment

For Pizza Hut, the focus in FY27 will be on consolidating its portfolio, which includes closing underperforming stores. No net new openings are planned for Pizza Hut in the upcoming fiscal year, indicating a strategic shift to improve profitability for the brand.

Challenges and Outlook

Devyani International acknowledged ongoing challenges, including the impact of the gas crisis in certain regions, though it was managed effectively. Macroeconomic uncertainties and external factors were also noted. Elevated coffee and cocoa prices affected the gross margins for Costa Coffee. Investors will be closely monitoring the completion of the Sapphire Foods merger, the turnaround strategy for Pizza Hut, and the effectiveness of the 'DIL 2.0' initiatives in driving future growth and profitability.