Buy Devyani International; target of Rs 155: Motilal Oswal

What happened

Motilal Oswal reiterated its Buy rating on Devyani International and set a target price of Rs 155. The report said consolidated revenue rose 10% year over year in 2QFY27, while India revenue grew 9%; KFC and acquired brands supported India growth.

Confirmed

Global impact / market context

The report points to uneven performance across Devyani’s brands: KFC’s same-store sales growth, or sales at existing outlets, fell short of expectations, while Pizza Hut remained negative. Continued weakness could limit revenue growth, even as acquired brands provide support.

Analyst inference

Management is cautious about near-term discretionary demand, meaning spending consumers can postpone, but expects a slight improvement in 3Q. Motilal Oswal’s target uses different valuation multiples for Indian and international operations, linking its view to expected business performance across both segments.

Analyst inference

What to watch

1. Check whether 3Q discretionary demand improves as management expects; stronger consumer spending could support restaurant sales, while continued caution may restrain revenue growth. Analyst inference
2. Watch KFC same-store sales growth and Pizza Hut’s trend in the next reported results, since both signals indicate whether existing outlets are gaining or losing sales. Analyst inference
3. Track whether India growth continues to receive support from acquired brands, and whether that contribution offsets the below-expectation KFC performance described in the report. Analyst inference

Evidence

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