DEVYANI

Jan 8 (Reuters) - Devyani International Ltd DEVY.NS:

• DEVYANI INTERNATIONAL LTD - SKY GATE HAS COMPLETED THE SALE OF ITS ENTIRE 51% EQUITY STAKE HELD IN PEANUTBUTTER

Source text: ID:nnAZN4RSY4C

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Jan 2 (Reuters) - India's KFC, Pizza Hut operator Devyani International jumped as much as 8.3% on Friday after announcing the long-anticipated $934 million merger with smaller peer Sapphire Foods, creating a fast-food major poised to challenge market leader Jubilant Foodworks.

The combined entity will operate more than 3,000 KFC and Pizza Hut outlets, franchises of Yum Brands YUM.N, in India and overseas, going up against the Domino's Pizza operator Jubilant's 3,480 outlets in the country.

Devyani's DEVY.NS stock was last trading 2.8% higher at 151.39 rupees.

The merger was a "welcome strategic move", said analysts at JP Morgan, as it meant a simplified structure, potential for meaningful cost savings and quicker decision making, helping Devyani compete more effectively with peers and food delivery platforms.

The merger comes as India's fast‑food franchisees contend with higher operating costs, slowing same‑store sales and margin pressures, while consumers trim discretionary spending. Both Devyani and Sapphire logged losses in the September 2025 quarter.

The combined business could deliver revenue and operating profit 50%–60% above current levels, with a scale and growth trajectory approaching Jubilant's, though margins are expected to remain comparatively weaker for now, added Emkay Global.

Devyani will issue 177 shares for every 100 Sapphire shares under the deal.

Sapphire Foods slipped about 3% to 254.25 rupees, while Jubilant's shares were trading 0.2% lower at 552.20 rupees.

The merger ratio is very close to where the stock prices closed on January 1 and so there is no major price adjustment that can arise out of this deal, said Jefferies analysts.

(Reporting by Urvi Dugar and Kashish Tandon in Bengaluru; Editing by Janane Venkatraman)

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Jan 1 (Reuters) - Sapphire Foods India SAPI.NS said on Thursday it will merge with Devyani International DEVY.NS, in a move that is likely to consolidate local franchisee partners of Yum Brands YUM.N, the owner of KFC and Pizza Hut.

(Reporting by Hritam Mukherjee in Bengaluru; Editing by Howard Goller)

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Dec 30 (Reuters) - Devyani International Ltd DEVY.NS:

• SKY GATE ENTERS AGREEMENT WITH HERITAGE FOODS FOR 51% STAKE IN PEANUTBUTTER

• CONSIDERATION OF 90 MILLION RUPEES FOR SALE OF STAKE

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Nov 6 (Reuters) - Devyani International DEVY.NS, which operates KFC and Pizza Hut restaurants in India, reported a quarterly loss on Thursday, as demand across its portfolio remained under pressure.

Popular fast-food chains have been struggling to grow their same-store sales in India, as they deal with stiff competition from local restaurants at a time when urban demand is in early stages of recovery after a long lull.

Firms have been relying on discounted combo deals and new launches to generate demand, while adding stores to capture market share.

Devyani International, which is a franchisee of U.S.-based Yum Brands YUM.N, reported a net loss of 219 million rupees ($2.49 million) in the three months to September end, compared with a profit of 170,000 rupees a year ago.

The firm launched a chickpea burger at KFC, priced at less than a dollar, and a three-topping pizza at Pizza Hut to lure in consumers.

Its revenue from operations rose 12.6% to 13.77 billion rupees, as the company added 263 stores from a year earlier, taking its store count to 2,184 units.

Yum Brands YUM.N said on Tuesday it has begun a strategic review of the struggling Pizza Hut chain, whose sales have lagged that of Yum's other portfolio restaurants Taco Bell and KFC.

Devyani said that the Indian government's sweeping goods and services tax cuts have had "a very minimal" impact on the quick-service restaurant category.

At KFC, same-store sales fell 4.2%, while for Pizza Hut, they fell 4.1% from a year earlier.

Devyani's EBITDA margin declined to 14.1% in the second quarter from 16.3% a year ago, in part due to the acquisition of Biryani by Kilo chain-owner Sky Gate Hospitality, which has been operating at a loss.

In October, Devyani's peer Sapphire Foods SAPI.NS, reported a wider second-quarter loss and said it would halt Pizza Hut expansion in India after the chain's same store sales fell 8%.

($1 = 87.8950 Indian rupees)

(Reporting by Ananta Agarwal in Bengaluru; Editing by Mrigank Dhaniwala)

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** Shares of quick service restaurant (QSR) operators gain between 1% and 3.5%

** India announced GST cuts on hundreds of consumer items ranging from soaps to small cars to spur domestic demand

** While the GST rate on QSR output remains same, lower tax on key inputs like cheese, other dairy products and chicken is down to 5% from 12%

** Jefferies says Jubilant Foodworks JUBI.NS, Devyani International DEVY.NS and Sapphire Foods SAPI.NS to benefit

** JUBI up 3.5%, while DEVY and SAPI rise 2.7% and 1.7%, respectively

** McDonald's India operator Westlife Foodworld WEST.NS climbs as much as 4.9%, last up 1.1%

** JUBI, SAPI, WEST rated "hold" on avg, DEVY rated "buy" - data compiled by LSEG

(Reporting by Manvi Pant in Bengaluru)

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By Praveen Paramasivam

Aug 26 (Reuters) - U.S. pizza chain Papa John's International PZZA.O plans to return to India by October, said a master franchisee executive, aiming to open 650 stores over the next decade in a market where fast-food chains have been struggling to sustain sales growth.

The world's third-largest pizza delivery company, which exited India in 2017 citing underperformance, follows U.S. rival Little Caesars, which opened in India earlier this year with a target of 100 stores by the decade-end.

Papa John's will open its first store in the southern city of Bengaluru, Vish Narain, managing partner at Pulsar Capital, told Reuters. The Indian investment house and UAE-based PJP Investments Group are Papa John's joint master franchisees in India.

The pizza chain had revealed plans in April 2023 to re-enter the "complex market".

Its return comes as fast-food chains grapple with weakening sales in the country, as cash-strapped urban consumers - the key customer base - cut back due to slow wage growth and as rising competition bites.

One of India's two Pizza Hut YUM.N franchisees, Devyani International DEVY.NS, has been closing underperforming stores, while the smaller operator, Sapphire Foods India SAPI.NS, has been cautious with its expansion plans.

The company will also face stiff competition from Domino's Pizza DPZ.O, which has more than 2,200 outlets in India, Pizza Hut with about 950 stores, and smaller upscale chains such as Pizza Bakery and PizzaExpress.

Pulsar Capital is betting on India's long-term potential, mirroring consumer-facing companies such as Dove soapmaker Hindustan Unilever HLL.NS and brewer Heineken HEIN.AS that are continuing to invest in the country with an eye on its population of 1.4 billion.

The fast-food "category is under-penetrated, so we are many years away from saturation," said Narain.

Papa John's plans to tailor its pizza to local palates while also offering its signature pies, joining fast-food rivals offering similar fare. KFC sells a paneer zinger burger, Domino's offers a chicken tikka pie, and Subway serves a potato-patty sandwich.

(Reporting by Praveen Paramasivam in Chennai; Editing by Dhanya Skariachan and Janane Venkatraman)

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** Macquarie cuts PTs on Indian fast food operators after weak Q1; says demand recovery only during Oct festive season

** Cuts PTs on Domino's franchisee Jubilant Foodworks JUBI.NS, McDonald's operator Westlife Foodworld WEST.NS, KFC franchisee Devyani International DEVY.NS and Pizza Hut operator Sapphire SAPI.NS

** Brokerage also lowers EPS estimates for all four with cautious near-term outlook

** Government's GST cut plans "enhances comfort" on demand recovery panning out in H2 FY26 - Macquarie

** Brokerage prefers DEVY followed by WEST; more confident on demand recovery for KFC and McDonald's operators

** On average, DEVY rated "buy", rest rated "hold", by analysts - data compiled by LSEG

** YTD, JUBI down 13%, DEVY falls 6%, WEST drops 11.3%, SAPI 1% down

(Reporting by Nandan Mandayam in Bengaluru)

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** Devyani International DEVY.NS falls 0.7% to 157 rupees

** KFC and Pizza Hut operator posts 88% y/y slump in Q1 profit; rev from ops up 11.1% y/y

** Brokerages see weakness ahead as margins remain under stress

** Core profit margins contracted 15.1% from year-ago 18.3%, weighing on profitability

** PhillipCapital ("Neutral"; PT: 162 rupees) sees higher marketing spends, rise in prices to weigh on profitability

** Macquarie ("Outperform"; PT: 215 rupees) sees continued margin weakness across formats, limited near-term triggers

** Stock rated "buy" on average; median PT is 190 rupees, per data compiled by LSEG

** YTD, DEVY falls 14%

(Reporting by Komal Salecha)

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Adds details throughout

Aug 13 (Reuters) - Devyani International DEVY.NS, which operates Pizza Hut and KFC restaurants in India, reported a nearly 88% slump in first-quarter profit on Wednesday, as it ramped up advertising to whip up demand that has remained sluggish for months.

The Yum Brands YUM.N franchisee reported a net profit of 36.9 million rupees ($420,920.55) for the quarter ended June 30, compared with 301.06 million rupees a year earlier.

Popular fast food chains in India have been struggling to grow the average daily spending as urban customers tighten their wallets amid high costs of living and feeble wage growth, despite easing inflation.

Yum's franchisee partners, Devyani and Sapphire Foods SAPI.NS, both of which operate Pizza Hut and KFC in India, have also turned to offering heavy discounts on meals amid promotional launches.

For the quarter, Devyani offered nine fried chicken pieces for 299 rupees, in a deal called 'epic savers'. It also offered two side dishes and a free Pepsi bottle with a medium-sized thin crust pizza at its Pizza Hut restaurants.

Still, the average daily spending fell to 98,000 rupees from 104,000 rupees a year ago at KFC chains, and to 33,000 rupees from 36,000 rupees at Devyani's Pizza Hut restaurants.

"While near-term macro factors have led to a phase of soft consumer demand, we see a better outlook for the industry in coming times," non-executive chairman Ravi Jaipuria said in a statement.

Revenue from operations rose 11.1% year-on-year to 13.57 billion rupees, benefitting from a restaurant count that was higher by over 300 year-on-year, including the addition of the recently acquired 'Biryani by Kilo' chain.

However, lower margins weighed on profitability.

Core profit margins contracted to 15.1% from 18.3% a year earlier, the company said.

($1 = 87.6650 Indian rupees)

(Reporting by Ananta Agarwal in Bengaluru; Editing by Harikrishnan Nair and Sonia Cheema)

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July 23 (Reuters) - Sapphire Foods India SAPI.NS, which operates Pizza Hut and KFC restaurants in the country, reported a quarterly loss on Wednesday, as fast-food restaurant chains face stiff competition from local cafes and online kitchens.

The restaurant operator posted a net loss of 18 million rupees ($208,345.39) for the first quarter ended June 30, compared to a profit of 85.2 million rupees a year earlier, according to a regulatory filing.

($1 = 86.3950 Indian rupees)

(Reporting by Praveen Paramasivam in Chennai and Ananta Agarwal in Bengaluru; Editing by Subhranshu Sahu)

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** Indian Pizza Hut and KFC operators Devyani International DEVY.NS and Sapphire Foods SAPI.NS rise 3% to 172.1 and 9.9% to 352.35 rupees respectively

** Yum Brands YUM.N is in talks to facilitate a merger of its two franchisee partners in India, Economic Times reports, citing people aware of the matter

** ** DEVY, SAPI, YUM did not immediately respond to Reuters requests for comment

** Sapphire set for best day since 11 Feb, 2022, if gains hold

** The negotiations could result in DEVY either acquiring the franchisee rights of KFC and Pizza Hut from SAPI, or all of KFC's franchisee stores in India getting consolidated under DEVY, report adds

** A 1:3 share swap ratio is being prepared with Sapphire shareholders getting one share of DEVY for every three owned, the report further said

** DEVY, SAPI, YUM did not immediately respond to Reuters' requests for comment

(Reporting by Ananta Agarwal in Bengaluru)

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June 23 (Reuters) - Devyani International Ltd DEVY.NS:

• DEVYANI INTERNATIONAL - EXECUTES AGREEMENTS TO BUY ADDITIONAL SKY GATE STAKE

• DEVYANI INTERNATIONAL - DEAL FOR UP TO 1.06 BILLION RUPEES FOR SKY GATE SHARES

• DEVYANI INTERNATIONAL - EQUITY STAKE IN SKY GATE TO INCREASE TO 86.13%

Source text: ID:nBSE5ywYzw

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** India's Devyani International DEVY.NS jumps over 6% to one-month high of 175.78 rupees; on course for seventh straight session of gains

** KFC and Pizza Hut operator's board to meet on April 24 to approve acquiring Sky Gate Hospitality, which operates Biryani by Kilo

** Sky Gate has 3 billion rupee revenue (FY2025) from 106 restaurants/cloud kitchens across more than 40 cities

** Emkay Global Financial Services upgrades stock to "buy" from "add" on potential value creation from deal

** Acquisition to mark Devyani's foray into biryani category, which is large, delivery-friendly, and offers an opportunity to scale a quick service restaurant (QSR) biryani brand - Kotak Institutional Equities

** Says Biryani By Kilo has fared well among biryani QSRs and has superior average daily sales

** DEVY trims YTD losses to 3.7%

(Reporting by Vivek Kumar M)

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** India's Devyani International DEVY.NS jumps over 5% to one-month high of 164.3 rupees; set for fourth consecutive session of gains

** Kotak Institutional Equities upgrades KFC and Pizza Hut outlets operator to "buy" from 'add", raises PT to 190 rupees from 175 rupees

** Cites 20% stock correction in three months, expectations of better growth in FY26, portfolio augmentation as key triggers

** Says short-term headwinds aside, KF India's fundamentals are intact

** Analysts on avg rate DEVY "buy", median PT is 195 rupees, as per LSEG data

** YTD, DEVY still down 10%

(Reporting by Vivek Kumar M)

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** Long-term view on Indian QSRs (Quick Service Restaurants)remains constructive and the ongoing prolonged growth slowdown is nearing its end, says Emkay Global

** Sees potential for return of mid-teen growth in FY26E for QSRs, beyond the muted Q4 - Emkay

** Emkay covers Jubilant Foodworks JUBI.NS, Westlife Foodworld WEST.NS and Devyani International DEVY.NS with "add", while Sapphire Foods SAPI.NS gets a "buy" rating.

** JUBI, DEVY and WEST up between 0.8%-4.2%, while SAPI is down close to 1%

** Average recommendation for JUBI, DEVY and SAPI is "buy," while WEST is a "hold", as per LSEG data

** Emkay remains in favor of JUBI and Sapphire, led by relatively better operating performance

** Maintains "add" on Westlife and upgrades Devyani to "add" from "reduce", due to price correction.

(Reporting by Shivani Tanna in Bengaluru)

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** Motilal Oswal sees selective opportunities emerging in equities linked to consumption due to cheaper valuations following the recent drop

** FMCG index .NIFTYFMCG is down 6.4% in 2025 so far compared; Nifty 50 up 0.3%

** In the last two decades, consumer stocks have risen in all 11 phases of corrections in the benchmark Nifty 50 index .NSEI

** However, NIFTYFMCG has fallen 22.65% between the end of September 2024 and February 2025 vs 14.3% drop in Nifty 50

** Recent market drop has offered entry points in several key consumer and retail stocks, says brokerage

** Expects consumer indexes to recover in FY2026 as valuations ease

** Motilal's key small-cap, mid-cap picks include Page Industries PAGE.NS, Devyani International DEVY.NS, Metro Brands METB.NS, V-Mart VMAR.NS, Lemon Tree Hotels LEMO.NS, LT Foods LTOL.NS and Cello World CELO.NS

** Tax cuts and RBI rate cut in February will boost aggregate demand, investor sentiment, according to Motilal

(Reporting by Bharath Rajeswaran in Bengaluru)

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** Shares of Domino's Pizza DPZ.O franchise Jubilant Foodworks JUBI.NS fall 4.3% to 642.4 rupees

** Co said on Thursday it expects 200 bps growth in PAT margin over FY25-FY28, double digit rev compound growth by adding 1000 new stores

** Guidance of merely 200 bps PAT margin scale-up over next three years disappointing, said analysts at Nuvama Institutional Equities

** Emkay Research said growth strategy sound but margin pickup slow

** Factors including hike in delivery sales mix, high debt, interest cost, investments logistics will put pressure on margins, said Philip Capital analysts

** Avg rating on JUBI "buy", same as rivals Devyani International DEVY.NS and Sapphire Foods SAPI.NS - data compiled by LSEG

** Stock down ~7% so far this year vs a fall of 5% and 7% in DEVY and SAPI, respectively

(Reporting by Ashna Teresa Britto in Bengaluru)

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** Devyani International DEVY.NS, which operates KFC and Pizza Hut restaurants in India, falls 2.19% to 166 rupees

** Co's Q3 profit before tax drops 12% y/y amid dip in same-store sales for Pizza Hut and KFC in a weak demand environment

WEAKEST SAME-STORE SALES AMONG PEERS; PIZZA HUT EXPANSION TO MODERATE

** Ambit Capital ("sell"; PT: 142 rupees): DEVY reports weakest same-store sales among peers in Q3, "recovery is prolonged"

** Prefers rival Sapphire Foods SAPI.NS, which also operates Pizza Hut and KFC, on more attractive valuations

** Elara Capital ("buy"; PT: 215 rupees): Pizza Hut's same-store sales decline of ~1% y/y already on a low base given last year's ~12.6% drop

** Says Devyani to focus on improving unit economics, moderately expand store count

** Emkay ("reduce"; PT: 170 rupees): While growth turnaround is built into estimates, signs of initial recovery not seen yet for rating upgrade

** Says co's average daily spend was flat y/y vs a moderate increase reported by SAPI, in part due to DEVY's lower presence in metros where demand was better

(Reporting by Ananta Agarwal in Bengaluru)

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Feb 11 (Reuters) - Devyani International DEVY.NS, which operates KFC and Pizza Hut restaurants in India, reported a lower pre-tax profit on Tuesday, hurt by soaring costs due to rapid store expansion, pushing its shares down by nearly 4%.

The company's consolidated profit before tax fell 12% year-on-year to 85.2 million rupees (nearly $980,731) for the quarter ended December 31.

Devyani paid 151.3 million rupees in deferred tax expenses during the quarter, pushing its earnings after tax to a loss of 4.9 million rupees.

Its total stores, which include Costa Coffee outlets in India, rose to 1,542 from 1,342 at the end of the previous quarter.

This boosted revenue by nearly 54% to 12.94 billion rupees, marginally above analysts' expectations of 12.90 billion rupees, as per data compiled by LSEG.

It also pushed total expenses higher by nearly 55%, which weighed on margins that fell to 68.6% from 69% in the previous quarter.

Demand at its existing stores was weak, with same-store sales at the Pizza Hut and KFC outlets in India declining 0.8% and 4.4%, respectively.

Devyani also has 374 stores in Nigeria, Nepal and Thailand.

($1 = 86.8740 Indian rupees)

(Reporting by Kashish Tandon in Bengaluru; Editing by Mrigank Dhaniwala)

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** Indian restaurant operator stocks jump between 3% and 10% after slew of demand-boosting measures in union budget

** Zomato ZOMT.NS and Swiggy SWIG.NS soar 6.5% and 7%, respectively

** Both were hit hard by cooling demand over last two months

** Among restaurant operators, Pizza Hut and KFC India franchisee Sapphire Foods SAPI.NS gains the most; Burger King's Indian operator Restaurant Brands Asia's RESR.NS up 3%, rising the least

** Domino's franchisee Jubilant Foodworks JUBI.NS gains 5%, Pizza Hut's other Indian operator Devyani Internatinal adds ~7%; McDonald's franchisee Westlife Foodworld WEST.NS advances 8.8%

** Finance Minister Nirmala Sitharaman says those earning up to 1.28 mln rupees ($14,791.53)/year won't have to pay any taxes

($1 = 86.5360 Indian rupees)

(Reporting by Nandan Mandayam in Bengaluru)

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** Macquarie Equity Research anticipates uptick in demand for KFC in India, expects a turnaround for Pizza Hut, and a value-based recovery for McDonald's chains

** Devyani International DEVY.NS and Sapphire Foods SAPI.NS operate KFC and Pizza Hut chains in India, while Westlife Foodworld WEST.NS operates McDonald's

** Macquarie initiates coverage on DEVY and SAPI with "outperform" while reiterating the same on WEST

** There is near-term risk for KFC's same-store sales growth, but focus on value, strong competitive position in chicken, favorable base are expected to drive steady recovery - Macquarie

** Adds, pace of KFC store additions likely to be slower in SAPI vs DEVY due to longer gestation for chicken adoption in SAPI's KFC geographies

** Expects healthy EBITDA growth for DEVY in KFC given competitive position in chicken category

** For WEST, expects continued growth in footfalls buoyed by focus on value and launch of McCrispy chicken platform

** DEVY up 4.5% currently, while WEST up 0.2%; SAPI down 0.5%

** SAPI gained 16% in 2024, while DEVY and WEST shed 6% and 3%, respectively

(Reporting by Ashna Teresa Britto in Bengaluru)

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** Shares of India's McDonalds's operator Westlife Foodworld WEST.NS rise as much as 5.2% to 837.4 rupees, its highest since Sept. 27

** Goldman Sachs reiterates street high PT of 1,045 rupees, maintains "buy" rating

** Says positive impact of co's menu interventions expected to drive growth in Q3

** Co says confident of delivering positive same-store sales growth in Q3, will be better than peers, during interaction with GS

** Guest count to see decent growth in Q3, aided by soft base in year-ago quarter- GS

** More than 252,000 shares change hands, 2.2x its 30-day avg

** Rivals Domino's operator Jubilant Foodworks JUBI.NS rated "hold", KFC franchisees Devyani International DEVY.NS and Sapphire Foods SAPI.NS rated "buy" and Burger King operator Restaurant Brands Asia RESR.NS also at "buy"

(Reporting by Ashna Teresa Britto in Bengaluru)

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Nov 11 (Reuters) - Devyani International Ltd DEVY.NS:

• DEVYANI INTERNATIONAL Q2 CONSOL NET PROFIT 170,000 RUPEES; IBES PROFIT EST. 182.4 MILLION RUPEES

• DEVYANI INTERNATIONAL Q2 CONSOL REVENUE FROM OPERATIONS 12.22 BILLION RUPEES; IBES EST. 12.20 BILLION RUPEES

Source text: ID:nNSEb1W76J

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Oct 23 (Reuters) - Devyani International Ltd DEVY.NS:

• DEVYANI INTERNATIONAL LTD - APPOINTS SHIVASHISH PANDEY AS CEO – YUM BRANDS

Source text for Eikon: ID:nBSE7RQW2K

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** Bernstein starts coverage of supermarkets operator Dmart AVEU.NS, fashion retailer Trent TREN.NS, Jubilant FoodWorks JUBI.NS, Devyani International DEVY.NS with "Outperform"

** Says Dmart has "clear value positioning"; Trent benefiting from private label portfolio

** Dominos India franchisee Jubilant and KFC India operator Devyani to see boost from revival in fast food demand, menu innovation, expansion

** Consumers beyond the top 10% of income pyramid and outside the top 40 cities to boost retail, restaurant sectors: Bernstein

** Brokerage however rates fashion retailer Aditya Birla Fashion & Retail ADIA.NS and McDonald's operator Westlife Foodworld WEST.NS "Underperform"

** Rigid cost structure to weigh on WEST profitability; debt overhang and weak growth in legacy brands to hurt ADIA - brokerage

** Starts Pizza Hut operator Sapphire Foods SAPI.NS with "Marketperform", citing high valuations

** FMCG index .NIFTYFMCG is up 10.14% in 2024, underperforming the 15.3% rise in Nifty 50 .NSEI

** TREN up 6%, DEVY up 1.2% while AVEU is trading 0.2% lower; ADIA, JUBI, WEST, SAPI down 0.3%-1.6% - Exchange data

(Reporting by Bharath Rajeswaran in Bengaluru)

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** Shares of Devyani International DEVY.NS rise ~2.1% to 185.20 rupees

** 4.59 million shares of the quick-service restaurants chain operator traded in block deals at a premium of 1.27%-3% over last close - LSEG data

** Stock up ~9% this week after losing 4.28% in last two weeks

** Over 11 mln shares traded in stock's busiest session since Aug. 5

** Avg rating of 19 analysts is "buy"; median TP is 187.50 rupees - LSEG data

** Stock down 4.4% YTD, underperforming Nifty 500 index .NIFTY500, which is up 21% in the same period

(Reporting by Bharath Rajeswaran in Bengaluru)

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May 14 (Reuters) - Devyani International Ltd DEVY.NS:

• Q4 CONSOL NET LOSS 74.7 MILLION RUPEES

• Q4 CONSOL REVENUE FROM OPERATIONS 10.47 BILLION RUPEES; LSEG IBES EST. 8.79 BILLION RUPEES

• YEAR AGO CONSOL Q4 NET PROFIT 607.2 MILLION RUPEES, REVENUE 7.55 BILLION RUPEES

Source text for Eikon: ID:nBSE435CCP

Further company coverage: DEVY.NS

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Adds details

BENGALURU, May 10 (Reuters) - Sapphire Foods India SAPI.NS, which operates the Pizza Hut and KFC chains of restaurants, posted its biggest profit fall since listing and missed estimates on Friday, as inflation-weary customers continued to cut back on dining out and ordering in.

The Yum Brands YUM.N franchisee's consolidated net profit fell 98% to 23.9 million Indian rupees ($286,271.4) for the quarter ended March 31, marking its fourth straight quarterly profit fall.

Analysts, on average, had expected a profit of 44.5 million rupees, according to LSEG data.

Shares of the company, which went public in November 2021, fell as much as 3.3% after the results.

India's quick-service restaurants struggled throughout the fiscal year to lure in customers, who cut back spending due to sticky inflation. The country's food inflation, which accounts for nearly half of the overall consumer price basket, has remained high so far this year.

Sapphire Foods's restaurants launched new items at lower prices, as well as valued-added meals such as Pizza Hut's launch of a cheesy pizza-sandwich meal called Melts priced at 259 rupees and above, but customers could not be swayed.

Expenses rose 15% as raw material prices climbed 9.4%. Revenue climbed 12.7% to 6.2 billion rupees.

Rival McDonald's India franchisee Westlife WEST.NS also posted a 96% slide in fourth-quarter profit on frail demand.

Devyani International DEVY.NS, which also operates KFC outlets in the country, and Domino's India-franchisee Jubilant FoodWorks JUBI.NS are yet to report results.

($1 = 83.4872 Indian rupees)

(Reporting by Ashna Teresa Britto in Bengaluru; Editing by Janane Venkatraman)

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By Navamya Ganesh Acharya and Praveen Paramasivam

BENGALURU/CHENNAI, April 24 (Reuters) - Top fast-food franchisees in India are likely to report a slump in quarterly earnings as cash-strapped consumers continued to cut back on dining out and ordering in, analysts said, spurning the hundreds of new restaurants that operators opened in 2023.

Pizza franchisees such as Jubilant Foodworks JUBI.NS, Devyani International DEVY.NS and Sapphire Foods India SAPI.NS struggled throughout 2023 due to heightened competition, with burger chains also joining the struggle later in the year due to inflation.

Even new affordable menu items, such as Burger King's 99-rupee combination of burger, beverage, and fries, introduced last year, failed to lure customers as India's monthly inflation rate remained above the target rate so far this year.

"Earlier you might be visiting (fast-food chains) three or four times monthly. Now everyone is restricting to once or twice," said Kranthi Bathini, equity strategist at WealthMills Securities.

Analysts polled by LSEG estimate net income slumping between 54% and 97% in the March quarter for Devyani and Sapphire, which run the Pizza Hut chain of restaurants, and McDonald's operator Westlife Foodworld WEST.NS.

They expect a net loss at Burger King operator Restaurant Brands Asia RESR.NS to widen sequentially, also marking at least a 12th consecutive quarterly loss.

Same-store sales are also likely to fall across the board, analysts say, with the decline expected to be more pronounced at Pizza Hut stores at more than 10%.

However, this has not deterred franchisees - including Sapphire and Devyani, which also run KFC stores, - from opening new restaurants nationwide, from Kalimpong hill town in West Bengal to Shoolagiri village in Tamil Nadu.

While restaurant operators and analysts expect the aggressive store opening plans to drive long-term growth, it has not immediately translated to earnings growth, also squeezed by stiff competition from local rivals.

Local pizzerias such as La Pino'z are mounting pressure on international counterparts, while Restaurant Brands and Westlife face competition from regional players such as Jumboking and Biggies Burger.

Westlife kicks off restaurant earnings on May 8 in India, while others are expected to report in the following days.

Like consumer goods analysts, restaurant experts also expect a rebound in demand in the second half of the financial year - roughly from October onwards - on rising expectations of the cost of living easing.

(Reporting by Navamya Ganesh Acharya in Bengaluru and Praveen Paramasivam in Chennai; Editing by Janane Venkatraman )

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