Devyani International Reports Strong Revenue Growth Amidst Net Loss in Q4 FY26

Devyani International's revenue from operations surged 18.5% year-on-year to ₹14,369 million in the fourth quarter of FY26. Despite this top-line growth, the company registered a net loss of ₹98 million for the quarter.

Q4 FY26 Financial Results

Devyani International Ltd. announced its financial results for the fourth quarter and full fiscal year ended March 31, 2026. The company reported revenue of ₹14,369 million for Q4 FY26, an 18.5% increase compared to the same period last year. However, Devyani International posted a net loss after tax (PAT) of ₹98 million for Q4 FY26. For the full fiscal year FY26, total revenue reached ₹56,115 million, while the net loss after tax was ₹425 million.

KFC India demonstrated strong operational performance with Same Store Sales Growth (SSSG) of +4.9% in Q4 FY26, its highest in 14 quarters. The company continued its expansion drive, adding 217 net new stores in FY26, bringing its total store count to 2,256. The international business also showed growth, with revenue rising 20.0% year-on-year to ₹5,033 million in Q4 FY26.

Significance of the Results

The strong revenue growth indicates solid consumer demand for Devyani's brands and the success of its store expansion efforts. However, the continued net loss, despite higher sales, points to ongoing challenges in improving profitability and managing costs. The proposed merger with rival QSR operator Sapphire Foods is a major strategic move that could significantly reshape India's quick-service restaurant market. Management's focus on transformation, using technology, and data-driven decisions signals an intention to tackle operational issues and boost future performance.

About Devyani International

Devyani International is one of India's largest Quick Service Restaurant (QSR) operators, managing a vast network of outlets for global brands like KFC, Pizza Hut, and Costa Coffee. The company has a history of ambitious store network expansion, consistently adding new outlets across various formats and geographies in India over the past few years. Profitability has been a key area of focus and concern, with the company navigating challenges related to operational costs, supply chain, and employee expenses during its growth phases. The potential merger with Sapphire Foods India Ltd. is a significant move towards industry consolidation, aiming to create a larger, more competitive QSR platform.

What Investors Should Watch

If the Sapphire Foods merger succeeds, shareholders could benefit from a more diversified QSR business with a larger market presence and potential cost savings. The ongoing management transformation could lead to improved operational efficiency, better cost control, and enhanced decision-making capabilities. Continued disciplined store expansion is expected to drive top-line growth, provided profitability challenges are addressed. The company aims to deepen consumer relevance through strategic initiatives, potentially boosting brand loyalty and sales.

Risks to Watch

Forward-looking statements within the company's disclosures carry inherent risks. Actual results may differ materially due to significant changes in the economic environment, evolving tax laws, ongoing litigation, and shifts in labor relations.

Peer Comparison

• Sapphire Foods India Ltd.: Devyani's direct competitor and the target of a proposed merger. Sapphire Foods also operates KFC and Pizza Hut franchises.
• Restaurant Brands Asia Ltd.: Operates Burger King outlets in India and faces similar challenges in balancing growth with profitability.
• Westlife Foodworld Ltd.: Operates McDonald's in India, competing for consumer mindshare and market share in the QSR space.

Key Financial Figures & Growth

• Revenue from operations stood at ₹14,369 million for Q4 FY26, up from ₹12,126 million in Q4 FY25 (Consolidated).
• The company posted a net loss after tax of ₹98 million in Q4 FY26, compared to a loss of ₹165 million in Q4 FY25 (Consolidated).
• Full fiscal year revenue reached ₹56,115 million in FY26, an increase from ₹47,355 million in FY25 (Consolidated).
• The net loss for FY26 was ₹425 million, wider than the ₹383 million loss recorded in FY25 (Consolidated).
• KFC India recorded Same Store Sales Growth (SSSG) of +4.9% in Q4 FY26.
• Devyani International added 217 net new stores in FY26, bringing its total network to 2,256 stores.

What to Track Next

The progress and definitive terms of the proposed merger with Sapphire Foods India Ltd. Key milestones in the management team transformation and adoption of new technologies and data-driven strategies. Improvements in profitability margins and the company's ability to convert revenue growth into net profit. The pace and strategic location of future store additions, and their contribution to same-store sales growth. Any regulatory clarity or shareholder approvals required for the Sapphire Foods merger.