Devyani International [FY23 AR Notes] by Smart Sync Service

Industry QSR

The Indian food service market is composed for robust growth in the coming years, with projections indicating that it will reach a staggering USD 79.65 billion by 2028, exhibiting a remarkable compound annual growth rate (CAGR) of 11.19% from USD 41.1 billion in 2022. 

• quick service restaurants (QSR) segment is projected to see substantial growth, with estimates suggesting that it will increase from USD 690.21 million in 2022 to USD 1,069.3 million by 2027, growing at a CAGR of 9.15%.

• middle-class households in Tier II and III cities have increased their annual spending on fast food restaurants by 108% over the past two years

Devyani International

• It is India’s largest operator of QSRs. Operations in Nigeria and Nepal too. A diverse portfolio of iconic global brands. (KFC, PH - Pizza Hut, & CC - Costa Coffee). Along with successful in-house brand creations.(Vaango & Food Street)

• Revenue from operation stood as 29977 million(growth of 44%) with PAT at 2625 million which has grown by 69%

  • KFC – Rs. 1,990 Cr; 42% YoY growth (~⅔ of total revenue)

  • PH – Rs. 706 Cr; 32% YoY growth (~¼ of total revenue)

  • Costa – Rs. 102 Cr; 148% YoY growth

New Store Addition

• Devyani Net New Units(NNUs)

  • FY23 +305 which took the total count to 1243.

    • +138 KFC stores  [FY22 364 -> 490 Total Store count in FY23]

    • +94 Pizza Hut [FY22 413 -> 506 Total Store count in FY23] – Interesting to see that the total store is larger than KFC's revenue is much low.

    • +57 Costa [FY22 55 -> 112 Total Store count in FY23]

    • +16 Other [FY22 60 -> 76 Total Store count in FY23]

  • City coverage is spread across 242(FY22: 204) cities.

• Jubilant (Dominos)

  • FY23 +249 [FY22 1567 -> 1816 Total Store count in FY23]

  • City coverage [FY22 337 -> 393 Total Store count in FY23] They have more deep penetration of Indian cities compared to Devyani

  • Gross Margin and PAT margin continued to slide down

• Westlife Foodworld (McDonald's)

  • Presence in 357 restaurants across 56 cities

  • +41 store addition

  • Margin Improved 

  • Aiming to add 40-45 new restaurants in FY24 to reach 580-630 restaurants by 2027.

Overall QSR is the aggressive expansion mode after COVID, can they keep growing in the profit would be interesting to watch.