Shares of Devyani International Ltd have staged a sharp rebound, rising about 15% over the past two sessions, even as the stock remains down roughly 10% so far in 2026. Investors welcomed its December-quarter (Q3FY26) results and clarity on leadership, with Manish Dawar set to be elevated as president and chief executive officer from 1 April, providing continuity at the top.
Devyani reported Q3 revenue growth of 11.3% year-on-year to ₹1,441 crore, while EBITDA margin stood at 15.7%. Its store network continued to expand, with the total count across India and international markets rising 11.8% to 2,279.
The standout growth driver this quarter was not KFC or Pizza Hut, but the company’s own brands portfolio, which includes Vaango, Biryani By Kilo and Goila Butter Chicken. Its own brands contributed 7% of total Q3 revenue, up sharply from 2% a year ago, with revenue jumping to ₹94 crore from ₹20 crores.
Notably, own brands accounted for nearly half of Devyani’s incremental revenue growth in Q3, as store count in this segment rose to 218 from 96 last year. Biryani By Kilo also achieved EBITDA breakeven. For long-term investors, this portfolio represents an optionality – small today, but with the potential to become more meaningful over time.
That said, the company’s core brands in India are under pressure. Same-store sales growth (SSSG) remains negative, with KFC India at -2.9% and Pizza Hut India at -9.1%. Persistent weakness here is a concern, as sustainable growth ultimately depends on higher footfalls and spend at existing stores.
Going forward, growth hinges on two levers. The first is continued scaling of own brands, driven by store additions and improving unit economics. The second is a revival in SSSG at KFC and Pizza Hut, which still form the backbone of Devyani’s revenue base. Management has indicated plans to fix underperforming Pizza Hut stores and sharpen operations, but any meaningful turnaround may take time.
Competition from organized quick-service restaurant chains is also intensifying, and legacy brands such as KFC and Pizza Hut may be losing some of their earlier sheen, in a shift that appears structural rather than cyclical. The challenge, therefore, is not just about one soft quarter, but about sustaining relevance in an increasingly crowded market over the next decade.
Investors will closely track progress on the proposed merger with Sapphire Foods. “The announced merger with Sapphire may involve short-term uncertainty but we view it as a long-term positive,” Jefferies India’s analysts said, adding that they have raised the stock to a ‘Buy’ rating following its decline from recent highs.
