Devyani International Ltd, the operator of KFC, Pizza Hut, and Costa Coffee in India, reported a muted performance for the quarter ended September 2025, leading to a 3% decline in its stock price on Thursday.
The company posted a consolidated net loss of Rs 21.9 crore for Q2 FY26, compared to a marginal profit of Rs 0.17 lakh in the same period last year. Revenue from operations, however, rose 12.6% year-on-year to Rs 1,377 crore, driven by continued network expansion. During the quarter, Devyani added 263 new stores, taking its total outlet count to 2,184.
Operational metrics reflected sustained headwinds. Same-store sales fell 4.2% for KFC and 4.1% for Pizza Hut, underscoring weak discretionary spending and heightened competition in the QSR segment. EBITDA margin contracted to 14.1%, compared to 16.3% in the previous year, impacted by elevated input costs, increased promotional expenditure, and softer sales momentum.
Management noted that the recent GST rate cuts had a “very minimal” impact on consumer demand within the category. Industry analysts attributed the subdued results to a slowdown in urban consumption, rising operational expenses, and competitive discounting across quick-service formats.
While the company continues to pursue footprint expansion, analysts highlight the need for sharper cost discipline, improved same-store performance, and a calibrated approach to promotional spending to sustain profitability in an increasingly competitive market environment.
