Food and Beverages, Quick Service Restaurants

Devyani International – Franchisee of Yum! Brands

A company that operates world popular food store KFC, Pizza Hut, Costa Coffee.
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(A) About - Devyani International Ltd

Devyani International Limited is the largest franchisee of Yum Brands in India and is among the largest operators of quick service restaurants chain in India.

The foundation for Yum Brands was established as early as 1977, with PepsiCo's first restaurant purchase as it acquired Pizza Hut. Yum Brands wasn't actually a brand at all until 2002, when Tricon Global Restaurants changed its name to Yum! Brands, Inc.

It operates total of 884 stores across 155 cities in India. In addition, DIL is franchisee for the Costa Coffee brand and stores in India.

Further, 49% of its Restaurants are located in Metro Cities and 51% of restaurants are in non Metros Cities.

(B) Journey Since Inception

(C) Executive Management of the company

(i) Ravi Kant Jaipuria - Promoter

Mr Ravi Jaipuria is the promoter of the company. He is the Chair person of the group RJ Corp. As of Now, RJ Corp is running some of the prominent food and beverages businesses such as KFC Outlets, Pizza Hut & Costa coffees, Vaango! and The Food Street.

He has completed higher secondary education from Delhi Public School, Mathura Road, New Delhi.

Moreover, He has 30+ Years of experience in conceptualizing, executing, developing and expanding food, beverages and dairy business in South Asia and Africa.

Apart from that Mr Ravi holds the distinction of being the only Indian to receive PepsiCo’s award for International Bottler of the Year, awarded in 1997.

(ii) Mr Varun Jaipuria - Non-Executive Director

Mr Varun Jaipuria is Non-Executive Director of the Company. Mr Varun Jaipuria is the son of Mr Ravi Jaipuria.

He had attended Millfield School, Somerset, England and holds a degree in international business from the Regent’s University, London.

Apart from that, He has 13 years of experience in the soft drinks industry and has also completed a program for leadership development at the Harvard Business School.

(iii) Virag Joshi - President & CEO

Mr Virag Joshi is the President and CEO of the company. He has been a Director on the Board since November 10, 2004.

Additionally, He holds diploma course in Hotel Management and Catering from State Institute of Hotel Management and Catering, Lucknow, UP.

Moreover, He has been a key strategist in expansion of Pizza Hut, KFC, Costa Coffee outlets from a small base of Five restaurants in 2002 to 600 plus outlets in last 19 years.

Prior to joining Devyani, He has been associated with IHCL , Milkfood Ltd , Domino’s Pizza India Ltd and Priya Village Roadshow Ltd.

Mr Virag Joshi received Rs 2.59 Crores as remuneration for FY 21 i.e. 0.22% of Net Sales.

During FY21, Ms Devyani Jaipuria who was holding the position of directorship in the company resigned from the company w.e.f Apr 26 2021.

(Ms Devyani Jaipuria is the daughters of Ravi Kant Jaipuria and brother of Varun Jaipuria)

(iv) Manish Dawar - WTO & CFO

Mr Manish Dawar is holding the position of CFO and working as whole time director in the company. Mr Dawar holds a bachelor’s degree in commerce with honors from the Panjab University, Chandigarh and is a Chartered Accountant and a member of the Institute of Company Secretaries of India.

Further, He has wide experience in various industry domains and across various geographies in the world.

Moreover, He worked in various corporate setups including Reebok India, Reckitt Benckiser, Vedanta, DEN Networks Limited, and Vodafone India Limited.

Mr Manish Dawar received Rs 71.4 Lacs as remuneration for FY 21 i.e. 0.06% of Net Sales.

(D) Shareholding Pattern

Devyani International Ltd - Shareholding Pattern
Devyani International Ltd - Shareholding more than 1% Public and Promoters

(E) Business Portfolio

Devyani International Ltd - Business Portfolio, KFC, Pizza Hut, Costa Coffee

Before moving to Devyani International, you Must know that Devyani international Ltd is a part of RJ corporation Group.

Yes its the same RJ Corp Group that operates Varun Beverages which is into Producing and distribution of PepsiCo's Soft drinks and Tropicana juices.

Sometimes, while you're waiting for your food in the KFC, Pizza Hut, You might be thinking that why only PepsiCo Drinks being offered. So Its because of a RJ Corp, Because RJ Corp boosts its group company sales by offering beverages to its all QSR restaurant.

Devyani International Ltd operates Franchisee of world renowned brands like KFC, Pizza Hut, Costa coffee, and own brand Vango and The Food Street in the malls.

further, Devyani's Core brands that are KFC, Pizza Hut, and Costa Coffee caters millions of customers on daily basis which makes a Dominant player in the QSR Market.

(F) Revenue Breakup

(i) Segment wise Revenue Breakup

Devyani International Ltd - Revenue Breakup Segment wise

In FY22, 86% of the revenue reported from the Core brands that are KFC, Pizza Hut and Costa Coffee.

However, 14% of the revenue was reported from the Owned Brands which are Vanngo and The Food Street.

Moreover, the outlets of Vaango! and The Food Street are very less in comparison to Core brands. this is why core brands are dominating the company's topline.

(ii) Brand wise contribution

As of FY22, Devyani's Major Profit contributor is Costa Coffee which has unique menu like sandwiches, wraps, Indian snacks, desserts, and other beverages. Further, Vaango & The Food Street is 2nd biggest contributor in the bottom line of ~32%.

KFC and Pizza hut contribute ~17% and and ~21 respectively.

(iii) Revenue as per Geography

(iv) Channel Mix

(G) Global Footprints

(i) Presence in india

Devyani International Ltd - Core Brands Stores Split

Today Devyani International Ltd is the largest Franchisee of the Yum Brand in india. It is present across different cities in the country.

As of March 2021, The company has wide presence in north with 38% and South with 35%. On the other hand, the Company's outlets in Metro cities cover 49% presence and 51% of presence in Non Metros cities.

(ii) Change in the outlet

Devyani International Ltd - change in the Outlet

Devyani International Ltd is present across various cities in the country. The company has wide presence across north and South region. However, YUM's 2nd Franchisee that is Sapphire Food does not have much presence across India.

Although, KFC as a leader in the Fried chicken segment is far ahead from the peers like Popeyes.

(iii) Stores expansion QoQ

(H) Cost Structure of the company

(i) As % of Net Sales

Devyani International Ltd - cost Structure of the co.

In FY21, maximum expense has been incurred on Raw material consumed which accounted almost 30% of net sales and other Manufacturing expense Comprised a proportion of 10.69%.

On the other hand, Selling and Distribution expense which includes sales commission and Incentive item reported at 14.67%

(ii) Raw Material Consumed % Net Sales

Devyani International Ltd - (ii) Raw Material Consumed % Net Sales

Over the past years, Company’s Raw material Consumption are quite stable which is in the range of 30%

Raw material prices were normal during the initial months of FY21, the second half of year saw inflationary pressures, mainly due to global supply-demand gaps and various other factors.

(iii) Salaries and Wages Expense

Devyani International Ltd - Salaries and Wages Expense

(iv) Advertisement & Sales Promotion Expense

Devyani International Ltd - Advertisement & Sales Promotion Expense

Over the Years, Company’s aggressively spending on Advertisement and promotion to gain the market share and to build a Strong Brand in its Industry.

However, In FY21, Company has spent almost 6% on A&P expense.

(J) Market Share of The QSRs in the Indian Market

The QSR channel made the largest contribution to the industry, with a revenue share of 34.1% amounting to Rs2,85,479 crore. The QSR channel expected to grow at a CAGR of 12.4% between CY20-25.

(i) Market Share By Outlet Count

Devyani International Ltd - Market Share By Outlet Count

Dominos has the largest Market share in term of outlets led by strong Presence across india. In addition, Domino was the first Western Brand that introduced Pizza in Delhi, India during 1990.

(ii) Market Share By Revenue

Devyani International Ltd - Market Share By Revenue

In the QSR Market, Domino's is still leading the Market by 21% in term of Revenue. 11% By McDonald and 10% by KFC.

(K) Group Structure

Devyani International Ltd - Group structure

(L) Financial Parameters

Stock research of devyani international with detail financial parameters
  • In FY21, Devyani recorded negative Net Sales growth of -25% and later a jump of 84% in FY22.
  • Also, Over the 10 Years, Devyani International Ltd has delivered 15% CAGR of Net Sales.
  • Over the years, The PAT Margin of the company is Negative whereas ROCE Is Improving on YoY Basis.

(M) Management discussion and Concall Highlights

  • In FY22, Company reported robust growth because of upliftment in the various restrictions. Somehow, 3rd Wave of Covid disrupted the operations in Dec - Jan Month
  • Devyani International is market leader in the segment of Fried Chicken and follower in the Pizza Segment.
  • DIL is More focused on KFC Business, because 70% of the Indian population lie in Vegetarian category, rest fall in Non-Veg category.
  • Additionally, in FY22 Company took 2 times hikes in the KFC and Pizza Hut due to rising in the input cost and low business because of Navaratra and Roza season.  

Concall Highlights - Q4FY22

During the Q4 FY22, Company reported strong growth against Q3 of FY22.


  • During Q4FY22, DIL recorded a dip of almost 6% in revenue. DIL reported 590 cr as revenue against 620 Cr in Q3FY22.
  • Gross Margins are stable over the past 2 quarters of FY22 at 71.2%, and increased 1.6% on annual basis from 69.6% to 71.2%.
  • In Q4FY22 EBITDA Margins reported at 24.3% vs 23.7% in Q3. However, on Annual basis EBITDA Margin improved by ~2% to 22.8% from the previous year.
  • In Q4FY22, Company recorded 40% revenue in KFC & Pizza Hut of (India Region).


  • In Q4FY22, Company opened Total of 54 Outlets 79 against Q3FY22 and in whole FY22 237.
  • Contribution from Non metros Cities increased by 3% from 48% to 51%, where as Metro cities like Delhi NCR, Mumbai, Kolkata, Bangalore contributed 49% in FY22.
  • During FY22, Company Launched KFC Bucket Canvas on account of Celebrating 600 Outlet across India. Devyani collaborated with an Indian Artist to offer designed buckets to consumers.
  • Moreover, During FY22, Company took 7% to 8% of Price Hike in KFC and 10% to 11% Hike Pizza Hut to Stabilize the margins.
  • Further, company introduced Thin Crust Base and Mexican Style Garlic Bread in Pizza Hut Product portfolio. Whereas, in KFC It introduced Bucket Biryani.

Capex and Expansion plan

  • Company has given a statement that it will open 200-300 Stores by Next Year with Capex of ~300 Cr.
  • Further company stated that it will focus on Delivery model outlets form Dine out Model to reduce the operating cost.
  • Additionally, company is working with YUM Brand to Launch App KFC and Pizza Hut separately.

(N) Strengths and weaknesses

Strengths for Devyani International Ltd

(i) Strong promoter group with diversified presence across sectors

RJ Corp Limited is the holding company of RJ Corp Group, promoted by Mr Ravi Kant Jaipuria. The group is a prominent player in the sectors of Beverages, fast-food restaurants, retail, ice-cream, healthcare and education etc. Apart from the ice cream business under DIL, the RJ Corp group through Varun Beverages Limited (VBL) has franchise rights from PepsiCo in India (except J&K, Ladakh and Andhra Pradesh), Nepal, Sri Lanka, Morocco, Zambia, Zimbabwe, and Democratic republic of Congo (DRC).

The fast-food restaurant business of the group is consolidated under ‘Devyani International Ltd (DIL)’ wherein the company is engaged in running over 890 outlets of ‘Pizza Hut’, ‘KFC’, ‘Costa Coffee’, ‘Vaango’ in different parts of the country. In addition, The group also owns three schools operating as franchises of Delhi Public School.

Moreover, The company has notable stake in prominent group companies which are listed like Varun beverages Ltd (27.69%) and Devyani International Ltd (59.44%). However, The actual debt as on December 31, 2020 stood at Rs. 1017.29 crore which got significantly reduced to Rs 522.25 crore as on Dec 31, 2021.

Further, The guarantees issued to group companies also significantly reduced to Rs 16.23 crore as on Dec 31, 2021 from Rs 456.66 crore as on March 03, 2021 and accordingly the pledge on the shares of RJ Corp have also been released which were earlier close to 28.5% to less than 6% currently.

(ii) Strong management & financial linkages with the parent with continuous support

RJ Corp holds 51.56% in DIL and 40.29% of DIL is held by Mr. Ravi Kant Jaipuria who is the Group Chairman and also on the board of DIL. additionally, RJ Corp has been supporting DIL through regular equity infusions and loans and advances for any kind of financial support that DIL may require.

In FY22, RJ Corp has infused approximately Rs 315 crore. RJ Corp has also extended corporate guarantee for few of the bank facilities of DIL in the past which are now though withdrawn but the continuous funds infusion demonstrates the fact that entity is strategically important for the parent.

(iii) Established presence of promoters in ice cream segment with established brand and extensive distribution network

The promoters forayed into ice cream business in 1992 with franchise rights of “Kwality Walls” from Hindustan Unilever Ltd (HUL). After having a decade of experience with HUL, they entered into the market with its own brand “CreamBell” in initial technical collaboration with “Candia” (France) in 2003 and has successfully established pan-India presence since then.

The company markets a large variety of ice-creams including cups, sticks, bars, kulfis, tubs, large packs, cakes and novelty ice-creams. The company largely caters to the consumer segment in the impulse purchase segment with small contribution from the bulk packs which helps DIL in realizing better profitability margins.

Weaknesses for Devyani International

(i) Highly competitive industry

Devyani comes under a very competitive market because a large proportion of this sector is covered by Unorganized players.

Additionally other QSR players Like Dominos, Burger King, McDonald and Subway are also transforming their business to new reach via upgrading Products portfolio and accepting orders through food aggregators.

(i) High volatility in prices of the raw materials

As company associated with food Industry, The key Item or raw material of the company is Edible Oil, Edible oil which are used while frying KFC chicken, and making Pizzas. Over the past few months, Edible oil increased by almost double due to fluctuation in the Crude oil.

Further, Rising edible prices on daily basis causes the company margins. which is difficult to escalate on the consumers.

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References:  Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets & Management Interviews, Industry’s Publications.

Disclaimer: The report only represents personal opinions and views of the author. No part of the report should be considered as recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.

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