Devyani International shares jump 8% as Jefferies upgrades to ‘Buy’, keeps ₹145 target

Devyani International shares jumped nearly 8% in early trade after global brokerage Jefferies upgraded the stock to ‘Buy’ from ‘Hold’, while maintaining a target price of ₹145, implying about 25% upside potential. The upgrade follows a 17% correction from recent highs, improved leadership visibility, and stable operating metrics. 

Market participants reacted positively to the rating action, despite mixed quarterly performance and near-term sector volatility.

Devyani International Share Price Surges After Jefferies Upgrade

Devyani International shares surged as much as 7.8% to ₹132.88 during intraday trading after Jefferies revised its rating to ‘Buy’, citing valuation comfort after a steep correction. The brokerage retained its ₹145 price target, signaling approximately 25% upside from prevailing levels.

The upgrade comes after the stock corrected nearly 17% from recent peaks, improving the risk-reward profile. Market reaction remained positive as investors responded to improved valuation comfort and earnings visibility.

Brokerage Rationale Behind the ‘Buy’ Rating Revision

Jefferies highlighted that the recent price correction has created a favorable entry opportunity, especially considering the company’s long-term expansion strategy and operational scale. The brokerage believes that store expansion, cost efficiencies, and brand optimization could support gradual margin improvement.

Additionally, the planned merger with Sapphire Foods India is expected to deliver long-term structural benefits, including pan-India franchise control for KFC and Pizza Hut and stronger international exposure, despite near-term integration uncertainties.

Leadership Transition and Strategic Continuity at Devyani International

A major development supporting sentiment is the promotion of Manish Dawar from CFO to CEO, effective April 1, 2026. The move ensures leadership continuity and allows strategic reassessment under familiar management.

Outgoing CEO Virag Joshi will retire on March 31, 2026, but will continue as a Non-Executive Director, supporting continuity. Jefferies noted that this transition could help reinforce execution discipline, operational restructuring, and sustainable growth planning.

Q3 Performance Snapshot Reflecting Mixed Operational Trends

Devyani reported over 10% year-on-year growth in consolidated and India revenues, though slightly below brokerage estimates. Same-store sales growth (SSSG) remained mixed: KFC India improved sequentially but stayed negative at -2.9%, while Pizza Hut India declined sharply by -9.1%.

Despite top-line pressure, consolidated EBITDA rose 3% YoY, beating expectations, while pre-exceptional PAT also exceeded forecasts. Gross margin improved by 20 basis points YoY, and EBITDA margins stood at 16%, ahead of estimates.

Store Expansion Strategy and Network Growth Trajectory

During Q3, Devyani added 95 net new stores, including 75 in India and 20 internationally. Domestic expansion included 54 new KFC outlets, 18 Pizza Hut stores, and 17 stores under own brands such as Vaango, BBK, and Goila.

The company also closed 13 underperforming franchise stores, enhancing portfolio efficiency. As of December 2025, the total store count reached 2,279, reinforcing its position as India’s largest QSR franchise operator.

Brand-Level Performance Trends Highlight Operating Divergence

At the brand level, KFC India showed sequential improvement, with average daily sales rising to ₹90,000, although still down year-on-year. Revenue grew 6% YoY, supported by delivery growth of 13%, while dine-in contribution softened.

In contrast, Pizza Hut faced sharper pressure, with revenue declining 6% YoY and SSSG weakening to -9.1%, marking one of its weakest quarters. Meanwhile, international operations and franchised brands recorded nearly 10% revenue growth, with improved profitability.

Market Reaction and Investor Sentiment After Jefferies Upgrade

Following the rating upgrade, investor sentiment turned cautiously optimistic, driven by valuation comfort, operational stabilization, and strategic clarity. However, market participants remain selective, given ongoing macro volatility, input cost pressures, and discretionary demand risks.

The ₹145 price target remains a key reference point, while ₹133–₹135 has emerged as an immediate resistance zone. Sustained volume-backed momentum could drive further upside, but short-term consolidation cannot be ruled out.

Conclusion

Devyani International’s 8% stock surge reflects renewed investor confidence following Jefferies’ upgrade to ‘Buy’ and ₹145 target retention. While operational performance remains mixed, leadership continuity, expansion momentum, and valuation comfort provide structural support. 

The stock’s medium-term outlook hinges on execution consistency, Pizza Hut turnaround, and merger integration progress, making near-term price action highly sensitive to earnings delivery and sector trends.

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