DEVYANI - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Fundamental Analysis: Devyani International Ltd (DEVYANI) Fundamental Rating: 2.6

🍔 Core Financial Snapshot

Earnings

EPS: ₹0.08 ➜ extremely low — net earnings nearly negligible

PAT Qtr: ₹–14.7 Cr vs ₹–0.49 Cr ➜ sharp decline — 97.3% drop

Return Ratios

ROE: –0.95% ➜ negative — destroying shareholder value

ROCE: 6.42% ➜ below ideal — low operating efficiency

Debt Levels

Debt-to-equity: 2.91 ➜ highly leveraged — risk elevated

📌 Insight: Company is struggling with profitability and return metrics. Debt burden raises caution.

💸 Valuation Metrics

Metric Value Commentary

P/E Ratio Not meaningful EPS too low — valuation distorted

P/B Ratio ~18.4 (₹167 / ₹9.07) ➜ priced richly vs book value

PEG Ratio Unavailable Unreliable due to earnings losses

📉 Verdict: Excessive valuation relative to fundamentals. Market appears to be pricing in brand optimism rather than earnings strength.

🍟 Business Model & Strategic Position

Operates QSR chains such as KFC, Pizza Hut, and Costa Coffee

Franchise-led growth model with focus on India’s urban & Tier-2 expansion

Competitive Moats

Global brand tie-ups

First-mover scale in organized QSR

Risks

Margin pressure from discounting and delivery platforms

High operating costs and rental intensity

Vulnerability to consumption cycles and food inflation

📈 Institutional Moves

FII Holding ↓ 1.04% ➜ foreign investors reducing risk exposure

DII Holding ↑ 1.22% ➜ domestic institutions still cautiously optimistic

📉 Technical Overview

RSI: 39.2 ➜ approaching oversold — reversal possible

MACD: +0.16 ➜ neutral — momentum flat

Price at DMA 50 & DMA 200 ➜ trend inflection point

✅ Suggested Entry Zone: ₹150–₹160 📌 Consider small accumulation only on signs of recovery or cost efficiency improvements. Avoid large allocations due to valuation concerns and weak profitability.

🧭 Long-Term Holding Guide

🧠 Best for high-risk investors betting on

India’s consumption growth in QSR segment

Strategic value in global franchise expansion

🔍 Track

Same-store sales growth (SSSG)

Margin discipline and cost control

Store expansion strategy in smaller cities

⚠️ Not suitable for conservative portfolios until profitability stabilizes and return metrics improve.

Would you like a head-to-head with Sapphire Foods or Jubilant FoodWorks to evaluate which QSR player is biting into market share more effectively? I've got just the numbers for that.

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