DEVYANI - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.6
| Stock Code | DEVYANI | Market Cap | 15,174 Cr. | Current Price | 123 ₹ | High / Low | 191 ₹ |
| Book Value | 12.4 ₹ | Dividend Yield | 0.00 % | ROCE | 7.53 % | ROE | 2.20 % |
| Face Value | 1.00 ₹ | DMA 50 | 133 ₹ | DMA 200 | 153 ₹ | Chg in FII Hold | -0.78 % |
| Chg in DII Hold | -0.32 % | PAT Qtr | 8.56 Cr. | PAT Prev Qtr | -14.3 Cr. | RSI | 46.2 |
| MACD | -5.57 | Volume | 2,89,62,594 | Avg Vol 1Wk | 62,89,200 | Low price | 110 ₹ |
| High price | 191 ₹ | Debt to equity | 1.59 | 52w Index | 16.8 % | Qtr Profit Var | 98.6 % |
| EPS | -0.28 ₹ | Industry PE | 114 |
📊 Analysis: Devyani International shows weak fundamentals with ROE at 2.20% and ROCE at 7.53%, reflecting poor efficiency. Debt-to-equity is high at 1.59, indicating leveraged operations. Dividend yield is 0.00%, offering no income support. EPS is negative (-0.28 ₹), highlighting weak profitability. The absence of a meaningful P/E ratio due to losses further underscores valuation concerns. Quarterly PAT improved to 8.56 Cr. from a loss of -14.3 Cr., showing recovery, but overall earnings remain fragile. Technicals show neutral momentum with RSI at 46.2 and MACD negative (-5.57).
💰 Ideal Entry Zone: Considering DMA levels (50 DMA at 133 ₹, 200 DMA at 153 ₹) and support near 110 ₹, the ideal entry zone is 110–120 ₹. Current price (123 ₹) is close to support, making staggered entry possible only for risk-tolerant investors.
📈 Exit / Holding Strategy: For existing holders, short-term holding (6–12 months) may be considered to capture recovery momentum. Exit strategy: consider profit booking near 150–160 ₹ resistance zone. Long-term holding is not recommended unless ROE improves above 10% and debt levels reduce significantly.
Positive
- ✅ PAT recovery from -14.3 Cr. to 8.56 Cr. shows turnaround momentum.
- ✅ Strong trading volumes (2.89 Cr. vs avg 62.8 lakh) indicate investor interest.
Limitation
- ⚠️ Weak ROE (2.20%) and ROCE (7.53%).
- ⚠️ High debt-to-equity (1.59) increases financial risk.
- ⚠️ EPS negative (-0.28 ₹), reflecting poor profitability.
- ⚠️ Dividend yield 0.00%, no income support for investors.
Company Negative News
- 📉 FII holdings decreased (-0.78%), showing reduced foreign confidence.
- 📉 DII holdings also declined (-0.32%).
- 📉 MACD negative (-5.57), indicating weak momentum.
Company Positive News
- 📈 PAT turned positive after losses, showing operational recovery.
- 📈 High trading volumes reflect strong market activity.
Industry
- 🏦 Industry P/E at 114 highlights the sector trades at a premium.
- 🏦 Quick-service restaurant (QSR) sector has long-term demand potential driven by urban consumption trends, but profitability and debt management are critical.
Conclusion
🔎 Devyani International is showing signs of recovery but remains financially weak with high debt, negative EPS, and poor efficiency metrics. Ideal entry zone is 110–120 ₹. Suitable only for short-term speculative holding, with exit near 150–160 ₹ unless profitability and ROE improve significantly.