Devyani International posted a second-quarter consolidated net loss of 2.4 million rupees as revenue advanced 10.4% to 15.19 billion rupees. Strong demand supported the bottom-line recovery, highlighted by KFC outlets registering their third straight quarter of positive same-store sales growth. The company achieved this progress even as promotional discounts and volatile energy prices influenced overall operating margins. Looking ahead, leadership remains focused on expanding its domestic physical presence through aggressive new store additions.
Key points
Devyani International remains on track to add between 200 and 220 net new stores this fis…: Devyani International remains on track to add between 200 and 220 net new stores this fiscal year.
Quick-service chains are heavily deploying value meals and discounts to retain cost-consc…: Quick-service chains are heavily deploying value meals and discounts to retain cost-conscious diners facing broader inflation.
Chairman Ravi Jaipuria expects consumer discretionary spending to face persistent strain…: Chairman Ravi Jaipuria expects consumer discretionary spending to face persistent strain from elevated interest rates and food costs.
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The company, a franchisee of US-based Yum Brands, said its consolidated net loss narrowed to 2.4 million rupees ($25,301.78), compared with a loss of 218.9 million rupees a year ago.
Here are some key details:
Quick-service restaurant chains in India have increased discounts and value meals to attract cost-conscious consumers as competition intensifies from newer local entrants.Restaurants have also faced higher input costs, from raw materials to energy, since the start of the conflict in the Middle East, while pressure from local rivals has pushed them to offer promotions to price-sensitive customers.
Same-store sales at its KFC outlets rose 4.4%, marking the third straight quarter of growth.
Consolidated gross margin declined by 60 basis points sequentially but rose by 70 basis points from a year earlier to 68.5%.
Devyani's revenue rose 10.4% to 15.19 billion rupees in the quarter, while expenses rose 8.3%.
"With food inflation firming and interest rates beginning to rise, we expect discretionary spending to stay under pressure," Chairman Ravi Jaipuria said in a statement.
The company said it was on track to meet its full-year forecast…
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