Devyani International Ltd Q2 FY26 Concall Decoded: “Discounts, Downpours & Dine-ins — KFC Still Frying, Pizza Hut Still Trying”

1. Opening Hook

While India’s GDP hit 7.8% and GST 2.0 promised a “simpler” tomorrow, Devyani International’s Q2 had everything but simplicity — vegetarian festivals, unseasonal rains, and a consumer who won’t order unless there’s a discount. Even so, the Colonel kept frying and the Hut kept baking, driving revenues up 13%. Ravi Jaipuria called it “resilient execution”; investors might call it “discounting discipline.” Add a few new teas, biryanis, and burgers — and you’ve got a menu that’s part expansion, part experiment. Stick around — things get spicy when GST, grease, and growth meet in one quarter.

2. At a Glance

• Revenue ₹1,377 crore (+13% YoY): Growth despite rain, festivals, and a value-hungry consumer.
• EBITDA ₹194 crore (14.1% margin): Flat, but Sky Gate weighed like an extra cheese crust.
• KFC India revenue ₹572 crore (+5.3%): Fried chicken stayed crunchy despite soggy demand.
• Pizza Hut SSSG -4%: The crust held, but demand flopped. 🍕
• International revenue ₹450 crore (+14%): Thailand carried the flag — 16.7% margins!
• Store count 2,184: Added 30 KFCs, 3 Pizza Huts, and 6 Tealives. Coffee, tea, but still no break.

3. Management’s Key Commentary

Ravi Jaipuria: “GST 2.0 is a historic simplification; early signs are encouraging.”
(Translation: Bureaucracy’s back, but we’ll smile through it.) 😏

“We launched Chana Chatpata Burger at ₹69 to expand our vegetarian range.”
(Translation: Navratri-proof menu unlocked.)

“Sky Gate integration remains on track; breakeven by March 2026.”
(Translation: Still burning cash, but we’ve set a calendar reminder.)

“Festivals and rains impacted out-of-home consumption.”
(Translation: Blame God and government, not gross margins.)

Manish Dawar (CFO): “Excluding Sky Gate, EBITDA margins would’ve been 7.6%.”
(Translation: The baby brands bit into the pie.)

“KFC margins dropped due to higher delivery salience and aggregator fees.”
(Translation: Swiggy ate our margins along with the fries.)

“We’ve test-launched Tealive and it’s doing well.”
(Translation: Because chai margins > pizza margins now.) ☕

“International business — especially Thailand — remains our margin hero.”
(Translation: Pad Thai pays better than Paneer Pizza.)

4. Numbers Decoded