Devyani International's share price jumped as much as 9.45% to ₹135 on Thursday, marking the third consecutive session of gains and extending the stock's surge to 16.5% over three trading sessions. The company reported a consolidated net loss of ₹10.39 crore for Q3 FY26, compared to a net loss of ₹49.20 lakh in the same quarter of the previous financial year. However, the loss narrowed sequentially from ₹21.9 crore reported in Q2 FY26. The company's revenue from operations rose more than 11% to ₹1,441 crore during the quarter, with EBITDA advancing 8.3% to ₹231 crore and EBITDA margin coming in at 16%. According to Upstox, the stock has outperformed the NIFTY Smallcap 100 index which was down 1.5% as of 12:11 pm on Thursday.
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. Own brands contributed 7% of total Q3 revenue, up sharply from 2% a year ago, with revenue jumping to ₹94 crore from ₹20 crore. 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, representing significant operational progress. For long-term investors, this portfolio represents an optionality - small today, but with the potential to become more meaningful over time as the company continues scaling these brands through store additions and improving unit economics.
The company announced a significant leadership transition with Manish Dawar's promotion from CFO to President and CEO for DIL with effect from April 1, 2026. As reported by Upstox, Jefferies noted that elevating CFO Manish Dawar to CEO ensures leadership continuity and expects the incoming CEO to take a hard look at the business and steer the franchise back to a sustainable growth trajectory. Non-Executive Chairman Ravi Jaipuria stated that DIL is at a critical inflection point in its growth journey, requiring a bold strategic vision backed by strong execution capability. The company has started the process of turnaround for the Pizza Hut business by rationalizing loss-making stores, with the strategy to open new stores only to compensate for closure of loss-making outlets. This approach aims to utilize existing assets and equipment in new stores while bringing down capex for new openings.
According to Upstox, the company reported EBITDA that beat estimates on better margins, with same-store sales trends improving sequentially and turning positive in January for most formats. JPMorgan remained 'overweight' on the stock with a target price of ₹155, noting that the firm's EBITDA beat estimates on better margins. Goldman Sachs kept a 'Buy' call with a target price of ₹160, flagging positive January same-store sales but stating it's "too early" to call it a sustained recovery. UBS maintained a 'Buy' call with a target price of ₹170, seeing an "emerging turnaround" for the company, helped by pricing, promotions and product interventions. The company's merger with Sapphire may introduce short-term uncertainty, but analysts view the move as a long-term positive for Devyani.
According to Upstox, KFC India improved sequentially but remained negative at -2.9%, while Pizza Hut India declined sharply by -9.1%, marking one of its weakest quarters. KFC India's revenue rose 6% annually to ₹603 crore, with KFC's average daily sales improving quarter-on-quarter to ₹90,000 but declining YoY. Pizza Hut's revenue declined 6.3% to ₹178 crore, impacted by a 10% drop in delivery and 2% in dine-in. During Q3, the company added 95 net new stores, comprising 54 net additions to KFC India, 18 net additions to Pizza Hut, and 17 stores for its own brands—Vaango, BBK, and Goila. As of December 2025, total store count reached 2,279. The company also added 20 new stores during the quarter between Thailand and Nepal in its international business.
Going forward, growth hinges on two key levers: continued scaling of own brands through store additions and improving unit economics, and a revival in same-store sales growth at KFC and Pizza Hut. 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 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 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, with Jefferies noting that while the announced merger may involve short-term uncertainty, they view it as a long-term positive for the company.
