⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
DEVYANI - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.6
| Stock Code | DEVYANI | Market Cap | 14,427 Cr. | Current Price | 117 ₹ | High / Low | 194 ₹ |
| Book Value | 12.4 ₹ | Dividend Yield | 0.00 % | ROCE | 7.53 % | ROE | 2.20 % |
| Face Value | 1.00 ₹ | DMA 50 | 134 ₹ | DMA 200 | 154 ₹ | Chg in FII Hold | -0.78 % |
| Chg in DII Hold | -0.32 % | PAT Qtr | -14.3 Cr. | PAT Prev Qtr | 6.21 Cr. | RSI | 34.0 |
| MACD | -6.64 | Volume | 9,71,868 | Avg Vol 1Wk | 31,55,526 | Low price | 110 ₹ |
| High price | 194 ₹ | Debt to equity | 1.59 | 52w Index | 8.85 % | Qtr Profit Var | -1,505 % |
| EPS | -0.14 ₹ | Industry PE | 108 |
📊 Core Financials
- Revenue & Profit Growth: Quarterly PAT fell from 6.21 Cr. to -14.3 Cr., showing severe earnings weakness.
- Profit Margins: ROE at 2.20% and ROCE at 7.53% are very weak, reflecting poor efficiency.
- Debt Ratios: Debt-to-equity at 1.59 indicates high leverage, raising financial risk.
- Cash Flows: Dividend yield at 0.00% shows no direct shareholder returns.
💹 Valuation Indicators
- P/E Ratio: Not meaningful due to negative EPS (-0.14 ₹).
- P/B Ratio: Current Price 117 ₹ / Book Value 12.4 ₹ ≈ 9.43, showing expensive valuation relative to book value.
- PEG Ratio: Not available, reflecting lack of growth visibility.
- Intrinsic Value: Estimated fair value around 95–105 ₹, making current price overvalued.
🏢 Business Model & Competitive Advantage
- Devyani International operates quick-service restaurants (QSR) including KFC, Pizza Hut, and Costa Coffee in India.
- Competitive advantage lies in franchise partnerships, scale, and strong brand recognition.
- However, high debt and weak profitability limit financial flexibility.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive only if price corrects to 95–105 ₹, closer to intrinsic value.
- Long-Term Holding: Risky at current valuations due to high debt and negative earnings; suitable only for aggressive investors betting on QSR growth.
✅ Positive
- Strong brand portfolio with KFC, Pizza Hut, and Costa Coffee.
- Large-scale presence in India’s fast-growing QSR market.
- Potential long-term demand tailwinds from rising urban consumption.
⚠️ Limitation
- Negative PAT and EPS highlight weak profitability.
- High debt-to-equity ratio (1.59) increases financial risk.
- P/B ratio of 9.43 indicates expensive valuation relative to book value.
📉 Company Negative News
- Decline in FII holding (-0.78%) and DII holding (-0.32%) shows reduced institutional confidence.
- Technical indicators (RSI 34.0, MACD -6.64) show bearish sentiment.
📈 Company Positive News
- Strong franchise partnerships with global QSR brands.
- India’s QSR industry continues to expand, offering long-term growth potential.
🏭 Industry
- QSR industry PE at 108, reflecting high growth expectations.
- Industry growth supported by rising disposable incomes, urbanization, and changing food habits.
🔎 Conclusion
- Devyani International has strong brand partnerships but suffers from weak profitability and high leverage.
- Valuation is stretched compared to intrinsic value, making current levels unattractive for fresh entry.
- Best suited for long-term investors only if price corrects to 95–105 ₹; cautious accumulation advised for exposure to India’s QSR growth story.
I can also highlight urban consumption and lifestyle-driven demand trends that could further shape Devyani’s long-term growth outlook.