Devyani International Reports Net Loss in Q2 Despite Revenue Growth, Cites Margin Pressure

Devyani International has reported a net loss of ₹21.8 crore for the September quarter, a significant shift from the marginal profit of ₹0.02 crore recorded in the same period last year. This downturn occurred even as the company saw its revenue climb by 12.7% to ₹1,376.7 crore, up from ₹1,222 crore a year ago. The decline in profitability is attributed to weakened operating performance. The company's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) decreased by 1.8% to ₹192 crore, and its profit margins narrowed to 14% from 16% in the previous year.

Despite the financial challenges, Devyani International continued its expansion strategy. Its network grew to a total of 2,184 stores, with the addition of 39 net new stores during the quarter, including 30 new KFC outlets specifically within India. Ravi Jaipuria, Non-Executive Chairman at Devyani International, commented on the recent GST 2.0 transition, describing it as a "historic move to simplify and harmonize the GST framework to a 2-tier structure." He stated that while it's early to fully assess, initial signs are encouraging for consumption categories like Automobiles and Durables. He added that the impact on the Quick Service Restaurant (QSR) category and their business has been minimal, and they have passed on benefits of reduced input costs to consumers.

Following the announcement of these earnings, shares of Devyani International Ltd. experienced a slight increase, trading 2.12% higher on Thursday at ₹155.90. However, the stock has seen a year-to-date decline of 15% in 2025.

Impact This news has a mixed impact. The net loss and margin contraction are negative signals for the company's short-term financial health and investor sentiment. However, continued revenue growth and aggressive store expansion are positive indicators for future potential. The stock's reaction suggests a cautious market response. The impact on the broader Indian stock market is primarily limited to the QSR and retail sectors. Rating: 4/10.

Difficult Terms EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operating performance. GST 2.0: Refers to a potential or proposed future simplification or restructuring of India's Goods and Services Tax (GST) system, aiming for a more streamlined framework.