DEVYANI - Investment Analysis: Buy Signal or Bull Trap?
Last Updated Time : 20 Dec 25, 07:05 am
Back to Investment ListInvestment Rating: 1.9
| Stock Code | DEVYANI | Market Cap | 16,126 Cr. | Current Price | 131 ₹ | High / Low | 210 ₹ |
| Book Value | 12.4 ₹ | Dividend Yield | 0.00 % | ROCE | 7.53 % | ROE | 2.20 % |
| Face Value | 1.00 ₹ | DMA 50 | 146 ₹ | DMA 200 | 162 ₹ | Chg in FII Hold | -2.87 % |
| Chg in DII Hold | 1.67 % | PAT Qtr | -14.3 Cr. | PAT Prev Qtr | 6.21 Cr. | RSI | 25.8 |
| MACD | -5.50 | Volume | 16,94,188 | Avg Vol 1Wk | 14,96,640 | Low price | 122 ₹ |
| High price | 210 ₹ | Debt to equity | 1.59 | 52w Index | 9.77 % | Qtr Profit Var | -1,505 % |
| EPS | -0.14 ₹ | Industry PE | 123 |
📊 Analysis: DEVYANI shows weak fundamentals for long-term compounding. ROE at 2.20% and ROCE at 7.53% are far below ideal thresholds. Valuation is unclear due to negative EPS (-0.14 ₹), making P/E not meaningful. Dividend yield is 0%, offering no shareholder returns. Debt-to-equity at 1.59 indicates high leverage risk. Technicals show RSI at 25.8 (oversold), MACD negative (-5.50), and price below both 50 DMA (146 ₹) and 200 DMA (162 ₹), indicating bearish sentiment. Quarterly PAT turned negative (-14.3 Cr. vs 6.21 Cr. previous), raising concerns about earnings sustainability. Overall, the stock lacks margin-of-safety metrics for long-term investors.
💡 Entry Zone: Safer entry would be in the 110–120 ₹ range, aligning with valuation comfort and support levels. Current price (131 ₹) is above fair entry zone, making risk-reward unattractive at present.
📈 Exit Strategy: If already holding, consider tactical exit near 145–155 ₹ resistance. Long-term holding is not favorable unless ROE improves above 12–15% and earnings growth stabilizes. Suggested holding period: short-term (6–12 months) rather than multi-year compounding.
Positive
- 📌 Strong brand presence in QSR sector
- 📌 DII holding increased (+1.67%)
- 📌 Oversold RSI (25.8) may offer short-term recovery opportunity
Limitation
- ⚠️ Weak ROE (2.20%) and ROCE (7.53%) below compounding thresholds
- ⚠️ High debt-to-equity (1.59) increases financial risk
- ⚠️ Negative EPS (-0.14 ₹) makes valuation unattractive
- ⚠️ Dividend yield at 0% offers no shareholder returns
Company Negative News
- ❌ PAT turned negative (-14.3 Cr. vs 6.21 Cr. previous)
- ❌ FII holding decreased (-2.87%)
Company Positive News
- ✅ DII holding increased (+1.67%)
- ✅ Strong consumer demand in QSR sector supports long-term potential if profitability improves
Industry
- 🏦 Industry PE at 123, sector richly valued
- 🏦 QSR/F&B sector has strong demand tailwinds but faces margin and debt pressures
Conclusion
🔎 DEVYANI is not a strong candidate for long-term investment due to weak ROE/ROCE, high debt, and negative earnings. Entry should be avoided at current levels; wait for correction near 110–120 ₹. Existing holders may exit near resistance zones or hold short-term only. Long-term compounding potential is limited unless profitability metrics improve significantly.
Would you like me to extend this into a peer benchmarking overlay comparing DEVYANI against QSR peers like Jubilant FoodWorks, Westlife Foodworld, and Sapphire Foods to highlight relative valuation comfort zones?
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