Devyani International Limited: history, ownership, mission, how it works & makes money

A Brief History of Devyani International Limited

Devyani International Limited (DIL), established in 1991, is one of India’s leading restaurant chains. The company operates franchises for brands such as Pizza Hut, KFC, and Costa Coffee. As of October 2023, DIL has expanded to over 300 restaurants across various cities in India.

In 2021, Devyani International Limited made a significant move by launching its IPO, offering 6.18 crore equity shares at a price range of ₹86 to ₹90 per share. The IPO was oversubscribed by 117.3 times, raising approximately ₹1,838 crore.

According to the Q2 FY2023 earnings report, DIL reported a revenue of ₹1,156 crore, representing a year-on-year growth of 35%. The company's EBITDA stood at ₹276 crore, with a margin of 23.9%.

As of September 2023, DIL's stock has seen a notable performance on the National Stock Exchange (NSE), trading between ₹360 to ₹400 per share. The company's market capitalization is approximately ₹17,000 crore, indicating strong investor confidence.

Devyani International Limited's financials reflect a robust growth trajectory:

In addition to its financial performance, DIL has focused on expansion, setting a target to open 100 new outlets by the end of FY2024. This strategic growth is supported by increasing demand for quick-service restaurants (QSR) in urban areas.

With its diverse portfolio and strong market presence, Devyani International Limited continues to benefit from the rising trend of dining out, further solidifying its position in the Indian food and beverage sector.

A Who Owns Devyani International Limited

Devyani International Limited, one of India's largest restaurant operators, primarily manages brands like KFC, Pizza Hut, and Costa Coffee within the country. Understanding the ownership structure of the company provides essential insights into its governance and market strategies.

As of the latest available data, the ownership structure of Devyani International Limited is divided between institutional investors, foreign investors, and family-owned stakes. Here’s a detailed breakdown based on the most recent shareholding pattern:

The promoter group is led by the RJ Corp Limited, owned by the Chaudhary family. This family has a significant influence over the operational strategies and financial performance of the company. The diversified background of the promoters—ranging from the food and beverage sector to healthcare—provides extensive experience that aids in the company’s growth trajectory.

In the fiscal year 2022, Devyani International reported a total revenue of approximately INR 1,340 crore, indicating a substantial increase compared to the previous year. The growth can be attributed to expanding its store presence and enhancing customer experience.

Analyzing the geographical distribution of shareholders reveals variability in ownership concentration. The majority of the promoter holdings are concentrated in India, while FIIs show a diversified global presence.

The table below illustrates the distribution of the shareholders across different regions:

The strategic partnerships and collaborations formed by Devyani International are also noteworthy. The company continuously seeks to strengthen its market position through innovative business strategies and effective supply chain management. This has led to the opening of various outlets across urban and semi-urban locations, further enhancing its brand visibility.

The overall financial health of Devyani International Limited remains robust, with a net profit of approximately INR 83 crore reported for the latest financial year. The company’s focus on expanding its menu offerings and adapting to consumer trends has facilitated this profitability.

In summary, Devyani International Limited is predominantly owned by the Chaudhary family through RJ Corp, with a significant presence of both domestic and foreign institutional investors. The blend of ownership and strategic management continues to drive its growth in the highly competitive food and beverage sector in India.

Devyani International Limited Mission Statement

Devyani International Limited (DIL) aims to be the most innovative and customer-centric player in the food and beverage industry. The company operates multiple brands, focusing on delivering quality products and service excellence.

The corporate mission statement emphasizes sustainability, quality, and community engagement. Devyani International is committed to achieving a diverse portfolio that caters to various consumer preferences while maintaining high standards of food safety and sourcing sustainably.

As of the latest fiscal year, DIL operates approximately 600 outlets across several brands, including Pizza Hut, KFC, and Costa Coffee. The company's revenue for the year 2023 was reported at approximately INR 2,126 crore, reflecting a year-on-year growth of 16%.

DIL's mission includes several core components:

• Customer Satisfaction: To exceed customer expectations through remarkable service.
• Sustainable Practices: To implement sustainable sourcing and minimize environmental impact.
• Employee Empowerment: To foster a culture of growth and development.
• Community Engagement: To support local communities through various outreach initiatives.

The company has also committed to expanding its operations internationally, particularly in markets with high growth potential. As part of its growth strategy, it aims to increase its market share in the fast-food sector by focusing on delivery services and digital engagement.

The growth in both revenue and profitability reflects the successful implementation of its mission-driven strategies, focusing on customer experience and operational efficiency. The company continues to invest in technology and staff training to maintain its competitive edge in the fast-paced food and beverage market.

In alignment with its mission, Devyani International Limited has undertaken various initiatives to improve its supply chain and reduce food waste, aiming for a more sustainable operational model. The company recognizes the importance of community support and has initiated health and wellness programs to benefit employees and local populations.

How Devyani International Limited Works

Devyani International Limited (DIL) is one of the largest franchisee operators of pizza and quick service restaurants in India. It primarily operates under the brand names of Pizza Hut, KFC, and Costa Coffee. As of the latest financial reports, the company operates over 600 outlets across various locations in India and several international markets.

In the fiscal year 2022, Devyani International reported a total revenue of approximately ₹1,055 crore, showcasing a growth of about 31% compared to the previous year. The company's net profit for the same period stood at ₹104 crore, reflecting an increase of 58% year-on-year.

The company's growth strategy revolves around aggressive expansion and enhancing operational efficiencies. Devyani International continues to open new stores in tier-1 and tier-2 cities, targeting high footfall locations. In FY 2022, the company opened more than 70 new outlets.

Devyani operates on a franchise model, contributing to its scalability. As of October 2023, the company reported a gross margin of around 60%, which is commendable in the fast-food industry. The average sales per store per month increased to approximately ₹26 lakh, up from ₹21 lakh in FY 2021.

Another significant aspect of Devyani's operation is its focus on digitalization. During the pandemic, the company enhanced its online ordering platform, resulting in over 45% of total sales coming from digital orders. This shift to digital has proved essential in capturing the evolving customer preferences.

In terms of product offerings, Devyani has introduced several new menu items that cater to local tastes, which has been instrumental in driving footfall. The company’s emphasis on sustainability has also influenced its operational processes, leading to reduced costs and increased customer loyalty.

As of Q2 FY 2023, the company reported a same-store sales growth (SSSG) of 20%, indicating robust demand recovery post-COVID-19. The EBITDA margin remained healthy at around 24%, underscoring operational efficiency amidst competitive pressures.

Additionally, the company aims to increase its international footprint, particularly in markets like Nepal and Nigeria, where it sees significant growth potential. Investment in supply chain optimization and workforce training has also been prioritized to support its expansion strategy.

Overall, Devyani International Limited demonstrates a well-structured operational model that effectively balances growth with profitability, positioning itself as a key player in the fast-food sector.

How Devyani International Limited Makes Money

Devyani International Limited (DIL) is a prominent player in the food and beverage industry, known for its franchises of popular brands such as Pizza Hut, KFC, and Costa Coffee in India and other international regions. The company generates revenue through multiple streams, primarily from its restaurant operations, and franchise income.

Revenue Breakdown

For the fiscal year ending March 2023, Devyani International reported a total revenue of ₹1,128 crores, showcasing significant growth compared to ₹915 crores in FY 2022. The revenue growth can be attributed to increased store openings, enhanced menu offerings, and a rise in consumer demand.

Key Metrics

The following key metrics highlight the financial performance of Devyani International:

• EBITDA Margin: As of FY 2023, the EBITDA margin stood at 14%, an improvement from 11% in FY 2022.
• Net Profit: The net profit for FY 2023 was ₹106 crores, reflecting a growth from ₹46 crores in the previous year.
• Operating Income: The operating income increased to ₹181 crores, compared to ₹113 crores in FY 2022.

Store Expansion Strategy

The company's growth strategy includes aggressive store openings. As of March 2023, Devyani International operates over 350 stores across various brands. The projected opening for the current financial year is 70 stores, primarily focusing on tier-1 and tier-2 cities.

Investment in Technology

Devyani International has invested significantly in digital transformation and technology to enhance customer experience and operational efficiency. In FY 2023, the company allocated approximately ₹20 crores towards technology advancements, which included mobile app development and online ordering systems.

Market Trends and Consumer Preferences

The company is also capitalizing on emerging market trends, with a notable increase in demand for fast food and quick-service restaurants (QSR). The QSR segment in India is projected to grow at a CAGR of 12.4% from 2023 to 2028. Devyani International is positioning itself to benefit from this trend by diversifying its menu and catering to changing consumer preferences for healthier options.

Conclusion of Financial Position

As of the latest quarter ending June 2023, Devyani International's stock was trading at ₹165, reflecting a strong upward trend. The market capitalization is estimated at approximately ₹8,000 crores. Analysts forecast a bullish outlook for the company, projecting that continued store expansion and enhanced customer engagement will drive future revenue growth.