Devyani International Limited made a strong listing debut on stock market on Monday. The share of Devyani International Limited was listed at ₹140.9 per share on the National Stock Exchange (NSE), over 56 per cent premium over its issue price of ₹90. The scrip got listed at Rs 141 on Bombay Stock Exchange (BSE), an 56.66 per cent premium over its issue price of Rs 90.
The largest franchisee of Pizza Hut, KFC and Costa Coffee in India opened its Rs 1,838-crore initial public offering for subscription from August 4-6. The issue saw an overwhelming response from the investors. Devyani International IPO
was subscribed a whopping 116.71 times over the 11.25 crore shares. It received bids of over 1,313.79 crore shares against the total issue size of over 11.25 crore shares.
Devyani International Limited earlier announced the extension of its partnership with Costa Coffee for a period of five years. The company said that it has entered into a revised development agreement for its existing Costa business.
Started with a one store in 1997, Devyani International has successfully expanded in more than 26 states and three Union territories in India. With 735 stores across the country, it is the largest Franchisee of Yum Brand. The company operates brands such as KFC, Pizza Hut and Costa Coffee in India as well as in the International markets. It also owns and operates its own franchisees such as Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar in India.
“As on 31st Mar 2021, there were 264 KFC stores, 297 PH stores and 44 CC stores which contributed 84% to FY21 revenue. Deeply affected by the pandemic, this vertical de-grew by 14.0% in FY21 to Rs 954 crore after growing 13.4 per cent in FY20. However, post the second wave we are seeing encouraging trends of sales revival. We expect the Core Business to grow its store count by 545 stores to 1150 stores (KFC +236 stores to 500, PH +253 stores to 550, CC +56 stores to 100) leading to a 41.1% CAGR in revenue to Rs 2,680 crore by FY24. The gross margins for the core brands (KFC 67.7%, PH 74.1%, CC 78.5%) are expected to sustain going forward given their strong brand appeal,” said Ventura Securities in a note.
“Over the period FY19-21 revenue growth was impacted by the onset of Covid to Rs 1,135 cr (-6.9 per cent CAGR) leading to a consequential reduction in EBITDA to Rs 226.9 crore (-9.8 per cent CAGR) and deepening of losses to Rs 81.3 crore from INR 59.3 cr (FY19). However, the operating cash flow was encouragingly positive at Rs 239.6 cr. The Debt to Equity of the company stood at 11x (with a net debt of Rs 1,212.4 crore) and net worth of Rs 113.8 crore,” it added.
“Going forward we expect Devyani International Limited to grow its revenue at a CAGR of 41.7 per cent to Rs 842 crore over the period of FY21-24E driven by Core brands revenue CAGR of 41.1 per cent to Rs 2,680 crore, International Business revenues CAGR of 13.3% to Rs 168 crore, and traction in Other Business revenues to Rs 378 crore (CAGR of 84.8 per cent),” it further added.
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