Devyani International returns to profit in Q1 as revenue rises 16.5 per cent

New Delhi: Business is back on the menu for Devyani International Limited. The quick service restaurant operator delivered a sharp turnaround in the first quarter of FY27, returning to healthy profitability on the back of double-digit revenue growth, improved margins and steady expansion across its restaurant portfolio.

The company reported consolidated revenue from operations of Rs 1,580.5 crore for the quarter ended June 30, 2026, up 16.5 per cent from Rs 1,357 crore in the corresponding quarter last year. Total income rose to Rs 1,599.7 crore, aided by higher other income.

Profit after tax climbed to Rs 17.1 crore from Rs 2.4 crore a year ago and reversed the Rs 13.4 crore loss reported in the previous quarter. Basic and diluted earnings per share improved to Rs 0.12 from Rs 0.03 a year earlier and a loss of Rs 0.11 in the March quarter.

The strong quarter also translated into the company’s highest-ever reported EBITDA of Rs 254.8 crore, up from Rs 224.3 crore a year earlier. EBITDA margin expanded by 100 basis points to 16.1 per cent, while operating EBITDA surged 38 per cent year on year to Rs 151.1 crore with margins improving to 9.6 per cent.

Profit before tax reached Rs 22.9 crore, marking the company’s strongest quarterly pre-tax performance in eight quarters.

The company’s flagship KFC business remained the biggest growth driver, with revenue increasing 11.7 per cent to Rs 684.2 crore. Same-store sales growth turned positive at 3.3 per cent, signalling improving consumer demand.

Performance across the broader portfolio also strengthened. Costa Coffee posted double-digit same-store sales growth of 10.2 per cent, while Biryani By Kilo and Vaango delivered growth of 7.2 per cent and 7.1 per cent respectively. Pizza Hut also recorded sequential improvement in same-store sales.

Gross margins improved by 90 basis points to 69.1 per cent, while overall brand contribution margin expanded to 14.2 per cent from 13.1 per cent a year ago.

India operations generated revenue of Rs 1,070.9 crore, up 14.9 per cent year on year, while international operations across Thailand, Nigeria and Nepal grew 20.7 per cent to Rs 523 crore.

Higher sales were accompanied by increased operating costs as the company continued expanding its network.

Total expenses rose to Rs 1,576.8 crore from Rs 1,367.4 crore a year earlier. Raw material costs increased to Rs 488.2 crore, employee benefit expenses rose to Rs 230.1 crore and depreciation charges climbed to Rs 180.4 crore as the restaurant network expanded.

Finance costs increased to Rs 70.1 crore, while other expenses stood at Rs 606.6 crore.

Despite inflationary pressures from LPG prices and statutory wage increases, improved operating efficiencies helped offset cost pressures and supported margin expansion.

Devyani International ended the quarter with 2,255 outlets across more than 350 cities globally.

In India, the company operated 1,855 stores, including 794 KFC outlets after adding 11 net new restaurants during the quarter. The company rationalised its Pizza Hut network by closing 13 net stores, while continuing to expand its own brands, including Biryani By Kilo and Vaango.

Internationally, the network grew to 400 outlets, supported by expansion in Thailand.

The company also continued work on its proposed merger with Sapphire Foods India Limited, which is expected to strengthen its leadership in India’s quick service restaurant market. Shareholders of Sapphire Foods will receive 177 equity shares of Devyani International for every 100 Sapphire Foods shares, subject to regulatory approvals.

Separately, the company completed the acquisition of the remaining stake in Sky Gate Hospitality Private Limited, making it a wholly owned subsidiary. The proposed amalgamation of Sky Gate into Devyani International has already received the first motion order from the National Company Law Tribunal.

Looking ahead, the company acknowledged that consumer demand may remain uneven amid weather-related uncertainties and broader macroeconomic pressures. Even so, with improving same-store sales, record operating profitability and a growing restaurant network, Devyani International appears to have regained momentum as it heads into the remainder of FY27.