DEVYANI - Investment Analysis

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

Investment Rating: 2.4

🍔 Fundamental Analysis: Devyani International Ltd. (DEVYANI)

Devyani International operates quick-service restaurant (QSR) franchises like KFC, Pizza Hut, and Costa Coffee in India. While the brand portfolio is strong, the financial metrics reveal significant concerns for long-term investors.

Metric Value Implication

P/E Ratio Not meaningful EPS too low to compute — signals poor profitability

PEG Ratio Not available Lack of earnings growth — valuation difficult to justify

ROCE / ROE 6.42% / -0.95% Weak — poor capital efficiency and negative return on equity

Dividend Yield 0.00% No dividends — not suitable for income investors

Debt-to-Equity 2.91 Very high — significant financial risk

EPS ₹0.08 Extremely weak earnings base

Qtr Profit Var -97.3% Severe earnings decline — red flag

FII/DII Holding Change -1.04% / +1.22% Mixed sentiment; DII accumulation is a mild positive

📉 Technical Analysis

Current Price: ₹167

DMA 50 / DMA 200: ₹171 / ₹171 → Trading below both; bearish trend

RSI: 39.2 → Near oversold zone; weak momentum

MACD: +0.16 → Flat; no clear trend

Volume: Slightly above average — mild interest

💰 Ideal Entry Price Zone

₹140–₹155

This range offers a better margin of safety near support levels

Avoid entry above ₹175 unless profitability improves and debt reduces

📈 Long-Term Investment Outlook

Strengths

Strong brand portfolio — global QSR franchises

DII accumulation — some institutional confidence

Sector tailwinds — rising urban consumption and eating-out trends

Risks

Negative ROE — shareholder value destruction

High debt — financial fragility

No dividends — not ideal for conservative investors

Massive profit decline — operational concerns

EPS too low to justify valuation — speculative play

Devyani is a high-risk consumer stock, suitable only for speculative investors betting on a turnaround and long-term QSR growth. It lacks the financial strength for long-term compounding.

🏁 Exit Strategy / Holding Period

If you already hold DEVYANI

Holding Period: 6–12 months with close monitoring of profitability

Exit Strategy

Consider exiting near ₹180–₹190 if price rebounds without earnings support

Reassess if ROCE doesn’t improve above 10% or debt remains elevated

Hold only if quarterly profits turn positive and margins stabilize

Would you like a peer comparison with Sapphire Foods, Jubilant FoodWorks, or Westlife Foodworld to explore stronger QSR plays with better financial metrics?

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