Devyani International (DIL) is the 2 nd largest QSR chain in India after Jubilant FoodWorks. DIL operated 309 KFC and 351 Pizza Hut stores as of Sep’21, or 60% of Yum Brands’ stores in India (other 40% run by Sapphire Foods). Large addressable population in KFC states (>80% non-vegetarian) and exclusivity for Pizza Hut deliveryonly stores indicates significant growth opportunities. DIL is likely to emerge as the growth-leader among QSRs in our view; we forecast EBITDA CAGR of 37% for FY22- 25E, driven by: 1) 21% CAGR in avg. store-count based on 210 annual store additions; 2) 7% CAGR in SSG; 3) avg. annual increase of 80bps in the EBITDA margin.
Outlook
After years of sub-par and volatile return ratios, DIL’s RoIC is likely to surge to c.20% in FY22E, thanks to the remodeling of store formats. While store sizes have reduced, the average daily sales (ADS) have not. We model RoIC of 40% by FY25E. We initiate on DIL with a Buy rating and a Mar’23E TP of Rs 210, based on 42x FY24E EV/EBITDA, derived from a two-stage growth model. Slower pace of execution is key downside risk to our forecasts.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
-
LIC's ownership of shares in listed companies drops to fresh low: Report
-
S. Korean Bond Yields on Feb. 7, 2022
-
Dollar ends at 1,200.7 won UP from 1,197.0 won
-
KOSPI 2,745.06 DN 5.20 points (close)
-
KOSDAQ 899.40 DN 3.47 points (close)
-
What should investors do with Tata Steel after a robust Q3: buy, sell or hold?
-
Buzzing Stocks: RIL, Tata Steel, SBI, Shree Cement and others in news today
-
Seoul stocks deepen losses late morning on profit-taking
-
Dollar opens at 1,198.8 won UP from 1,197.0 won
-
KOSDAQ 905.96 UP 3.09 points (open)
-
KOSPI 2,750.70 UP 0.44 points (open)
-
Seoul stocks likely to advance on technical rebound next week: analysts
-
Buy Laxmi Organics Industries; target of Rs 620: KR Choksey
-
Buy Orient Cement; target of Rs 233: Anand Rathi
OTHER NEWS
KR Choksey’s research report on UPL In Q3FY22, UPL’s consolidated revenue grew by 23.8% YoY/6.9% QoQ to INR 1,12,970 mn. The growth was due to better realizations and a healthy ... Read more »
KR Choksey’s research report on Navin Fluorine International During Q3FY22, NFIL’s reported strong topline growth of 22.58% YoY and 11.80% QoQ which came at INR 3,789 Mn. The growth was ... Read more »
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected ... Read more »
KR Choksey’s research report on Infibeam Avenues Consolidated revenue for Q3FY22 came at INR 3,970 mn, up 74.3% YoY (+27.7% QoQ) (vs. our estimate of INR 3,537 mn) and adjusted ... Read more »
Khambatta Securities’ research report on Subros Subros reported lower revenues in 3Q FY22 on a y-o-y basis (-9.3%) while 9M FY22 sales grew by a healthy 37%. 3Q FY22 EBITDA ... Read more »
Khambatta Securities’ research report on Century Plyboards Century Plyboards (India) Limited (CPIL) reported record revenues last quarter, led by strong growth in all segments barring CFS. Revenues grew by ~29.5% ... Read more »
Representative image Interglobe Aviation Ltd on Friday reported a surprise profit of Rs 129.79 crore in the December quarter for the first time after seven consecutive quarterly losses. Indigo had ... Read more »
Sharekhan’s research report on ITC ITC’s Q3FY2022 cigarettes sales volume growth stood at 12-13% (net revenues grew by 12.6%); Cigarette EBIT margin (based on net sales) improved by 117 bps ... Read more »
Sharekhan’s research report on Apollo Tyres Q3FY22 results were mixed, with significant operational improvement in European business, while standalone (Indian) operations suffered due to input cost pressures. ATL is set ... Read more »
Sharekhan’s research report on Blue Star Blue Star reported better than expected performance with strong revenue growth across business verticals, OPM stayed in-line despite gross margin pressures, overall leading to ... Read more »
Sharekhan’s research report on Cadila Healthcare Q3FY22 was a steady quarter for Cadila with the revenues and PAT reporting a flat yoy growth. India growth(Ex-Covid products) was strong while US ... Read more »
Sharekhan’s research report on GAIL Q3FY22 PAT of Rs. 3,288 crore, up 121%/15% y-o-y/q-o-q was significantly above our and street estimate led by exceedingly high profitability in the gas marketing ... Read more »
Sharekhan’s research report on Tata Consumer Products Tata Consumer Products Limited’s (TCPL) Q3FY2022 performance was largely in-line with expectation with mid-single digit revenue growth; OPM expanded 262 bps to 14.4%, ... Read more »
Sharekhan’s research report on Housing Development Finance Corporation HDFC’s PAT beat street expectations at Rs. 3,261 crore, up 11% y-o-y (but down ~14% q-o-q), led by strong individual loan growth ... Read more »
buy_27632668 Sharekhan’s research report on Dabur India Dabur India reported y-o-y revenue growth of 7.8% and muted volume growth of 2% in Q3FY2022 on high base of 16% growth in ... Read more »
Revenue grew 12% YoY to INR57.1b (est. INR55.75b). EBITDA declined by 19% YoY to INR7.4b (est. INR7.1b). EBITDA margin fell 500bp YoY (+45bp QoQ) to 13% (est. 12.8%). Adjusted PAT ... Read more »
VRL Logistics (VRL) delivered solid revenue growth of 20% YoY to INR6.8b (+7% QoQ), 9% above our estimates. Goods Transport (GT) revenue grew 19% YoY during 3QFY22 (based on 12% ... Read more »
JK Lakshmi Cement (JKLC)’s 3QFY22 result was above our estimate, led by better-than-estimated realization (2% over our expectation). EBITDA stood at INR1.46b (est. INR1.3b). EBITDA/t came in at INR595 (est. ... Read more »
IIFLWAM’s PAT grew 7% QoQ and 59% YoY to INR1.5b – a 22% beat in 3QFY22, led by a 17% beat on net revenue (up 20% QoQ and 58% YoY ... Read more »
ITC Ltd logo | Representative image While its 3Q earnings were in line with our estimates, the likely impact of the Omicron COVID variant on its 4Q earnings has resulted ... Read more »
Indian Hotels Company (IHCL) posted strong operating performance in Q3FY22 on back of strong recovery in performance of domestic as well as international properties. Consolidated revenues almost doubled y-o-y to ... Read more »
HMN’s volume/sales growth was flat/+4% YoY, respectively, lower than our estimates for 3QFY22. According to the management, this performance was attributable to the rural slowdown, lower Healthcare sales (off a ... Read more »
GAIL reported a beat on all our numbers, primarily driven by multi-quarter high profitability in the Gas Trading business. Operating performance for LPG and Liquid HC also improved on a ... Read more »
Titan Company (TTAN)’s end-of-quarter update released in early January had indicated the strong revenue growth trend in Jewelry, owing to which sales forecasts were in-line. However, there was a big ... Read more »
On a standalone basis, the oil marketing company reported a net profit of Rs 5,860.80 crore, up 19 percent against Rs 4,916.59 crore logged in the December 2020-21 quarter. Indian ... Read more »
Titan Company (TTAN)’s end-of-quarter update released in early January had indicated the strong revenue growth trend in Jewelry, owing to which sales forecasts were in-line. However, there was a big ... Read more »
MASFIN’s PAT rose 5% QoQ and 11% YoY to INR 401m (in line) in 3QFY22. Total income was up 10% QoQ/13% YoY to INR 887m (in line), while OPEX rose ... Read more »
BARBEQUE delivered a strong all-round performance in 3QFY22as the increase in mobility and upbeat festive sentiment drove a strong recovery in its dine-in business to 108% of pre-COVIDlevels. While the ... Read more »
WLDL delivered a beat on all fronts, driven by a strong recovery in both dine-in and convenience channels, which grew 39% and 55% YoY, respectively. Consequently, the company delivered a ... Read more »
(ATTN: ADDS bond yields at bottom, photo, more info in paras 7-8; RECASTS headline ) SEOUL, Feb. 4 (Yonhap) — South Korean stocks climbed more than 1 percent on Friday, ... Read more »
TCP reported a revenue of INR32.1b (est. INR30.7b), up 5% YoY. EBITDA margin expanded 260bp YoY to 14.4% (est. 13.8%) on gross margin improvement (+590bp YoY/+90bp QoQ to 43.7%). EBITDA ... Read more »
ICICI Direct’s research report on Dabur India Dabur India (DIL) is one of the biggest FMCG companies with a presence in Ayurveda based products across categories. The company has a ... Read more »
ICICI Direct’s research report on Balrampur Chini Balrampur Chini (BCML) is the second largest sugar company with sugar crushing capacity of 76000 TCD, distillery capacity of 560 KLD & co-generation ... Read more »
Today (%) Previous Session(%) Change (BP) 1-year TB 1.467 1.452 +1.5 2-year TB 1.995 1.969 +2.6 3-year TB 2.194 2.158 +3.6 10-year TB 2.619 2.566 +5.3 2-year MSB 2.017 1.975 ... Read more »
ICICI Direct’s research report on Adani Ports and SEZ Adani Ports and Special Economic Zone (APSEZ) is the largest commercial port operator with 25% share of India’s port cargo movement. ... Read more »
ICICI Direct’s research report on V-Guard Industries V-Guard is among India’s leading fast moving consumer electrical goods companies with market leadership position in the stabiliser business. The company has a ... Read more »
ICICI Direct’s research report on Tata Consumer Products Tata Consumer Products (TCPL) is one of the major FMCG companies present in tea, coffee & other beverages in India, the UK, ... Read more »
ICICI Direct’s research report on Somany Ceramics Somany Ceramics (SCL) is the second largest tiles manufacturer in the domestic tiles market having ~63 MSM capacity and sanitaryware and faucets capacity ... Read more »
Cadila Healthcare (CDH) delivered lower-than-expected 3QFY22 earnings, weighed by lower Domestic Formulation (DF) / US / EM sales and increased operational costs. CDH continues its effort to build the product ... Read more »
Varun Beverages (VBL) posted robust volume growth, supported by increasing overall consumption and post-pandemic recovery. Operating performance was under pressure due to an increase in input costs. Gross profit/unit-case fell ... Read more »