Devyani International, that operates KFC restaurants in India, on Thursday, reported a 98% increase in its net loss during the January-March quarter to Rs 14.7 crore, as compared to Rs 7.4 crore in the same quarter last year, owing to high input prices and lower-than-expected demand. The Bloomberg consensus estimates had pegged the net loss for the quarter at Rs 1.7 crore.
The company’s revenue from operations also fell short of the street expectations of Rs 1,253 crore and came in at Rs 1,212.6 crore. However, the revenue was up 15.8% year-on-year as compared to Rs 1,047.07 crore in the previous year.
The company’s expenses were up 13.5% to Rs 1,247.90 crore, due to higher costs for key ingredients like cheese and palm oil. The gross margin declined to 68.5% from 69.2% in Q4FY24.
The overhead costs for the company have also gone up but the management attributed it to reclassification of management fee, which is charged to Thailand.
The Ebitda was lower than the street expectations of Rs 197 crore at Rs 108.1 crore.
For all its brands in the country, the company added only 6 net stores in Q4FY25, as compared to 42 in Q4FY24. The company has also been changing its store format, reducing the size and investing in technology to improve margins.
Ravi Jaipuria, Non-Executive Chairman, Devyani International said that the company would continue to focus on store expansion for its core brands, especially KFC.
Among the major brands DIL operates, KFC reported the highest fall in the same-store sales at 6.1%, even though it was better than the drop of 7.1% in the same quarter last year. The average daily sales per store fell from Rs 93,000 earlier to Rs 83,000 in Q4FY25.
During an analyst call after the announcement of results, Manish Dawar, chief financial officer at DIL attributed the fall in the ADS to the bird flu which hit Andhra Pradesh and Telangana earlier this year. He also said that geopolitical situations in Kerala and West Bengal had also impacted the SSSG (Same Store Sales Growth).
“We now see sales coming back in AP and Telangana,” he added.
Pizza Hut’s same-store sales grew 1% as the company shut 14 of its stores during the quarter. Dawar said that they are discussing the plan to revive the brand with its sister concern Yum Brands and will be ready with a plan by the next quarter.
For Costa Coffee, the SSSG came in at 3.5%, despite high coffee bean prices.
The company has also recently announced the acquisition of Sky Gate Hospitality – owners of Biryani By Kilo – at a valuation of Rs 519 crore.
Dawar said that the acquisition is likely to be completed by the end of this month. DIL would also infuse Rs 90 crore into Sky Gate Hospitality in a bid to make it profitable by next year. Currently, the business in loss-making.
Earlier, it had also tied up with three international brands – New York Fries, Tealive, and Sanook Kitchen. Jaipuria said that the first store of New York Fries has been opened in Mumbai and there will be more coming up in the current year.
Moreover, Tealive will also open its first store in the country soon, he said.
Devyani International now has 2,039 stores across geographies including, India, Nigeria, Nepal and Thailand.