Active Stocks
Mon May 27 2024 13:32:26
  1. NTPC share price
  2. 370.35 -1.20%
  1. Tata Steel share price
  2. 176.30 0.86%
  1. Tata Motors share price
  2. 962.80 0.21%
  1. State Bank Of India share price
  2. 836.00 0.89%
  1. ICICI Bank share price
  2. 1,143.70 1.10%
Business News/ Markets / Stock Markets/  Devyani International stock slides over 4% after Q4 results; should you buy, sell or hold?
BackBack

Devyani International stock slides over 4% after Q4 results; should you buy, sell or hold?

KFC, Pizza Hut, and Costa Coffee operator Devyani International's stock witnessed 3.8 per cent decline on Wednesday, after the company reported a net loss of ₹49 crore for the March quarter of the financial year FY24.

Devyani International stock slid over 4% on May 15 (AP)Premium
Devyani International stock slid over 4% on May 15 (AP)

KFC, Pizza Hut, and Costa Coffee operator Devyani International's share price slipped over 3.8 per cent on Wednesday's trading session. The stock closed at 150.85 per share on May 15, versus the previous close of 156.90 on Tuesday.

The stock's decline was triggered by the company's announcement of a net loss of 49 crore for the March quarter of the financial year FY24. 

In the corresponding quarter of the previous year, the company had recorded a profit of 60 crore, whereas in the December quarter of FY24, the company's profit amounted to 5 crore.

Also read: Devyani International Q4 result: Company reports a loss of 49 crore; adds 47 stores in the fourth quarter

Revenue from operations for the assessed quarter reached 1,047.1 crores, a 38.7 per cent increase compared to the revenue of 755 crore in Q4FY23. This growth was bolstered by the acquisition in Thailand and additional store openings. Sequentially, the company's consolidated revenue expanded by 24.2 per cent, with Q3FY24 revenue standing at 843.1 crores.

In FY24, the company announced opening 256 net new stores spanning various brands and geographic locations.

"Over the course of the year, we opened 256 new stores, including 47 in the fourth quarter. As of March 31, our total store count has reached 1,782, including the 283 KFC stores, we acquired in Thailand on January 18, 2024," said Ravi Jaipuria, Non-Executive Chairman, Devyani International.

Should you buy, sell or hold?

Brokerage firm Elara Securities maintains its ‘buy’ rating on the stock with a lower target price of 190 per share.

Also read: Devyani's domestic struggles continue as it integrates Thai acquisition

“DEVYANI KFC is trading at 33x one-year forward EV/EBITDA (pre-IndAS). This could be at a premium versus other categories, which could lead to a target EV EBITDA of 39x (unchanged). The stock has corrected 14% in the past six months. Maintain Buy with June 2025E SoTP-TP pared to INR 190 (from INR 210), as we cut pre-IndAS EBITDA margin for KFC. We maintain our preference for the fried chicken category because of stable profitability in an uncertain demand environment. We foresee the category to have strong growth Q2FY25 onwards, led by better offtake and a low base, last year," the firm said in a note.

 

You are on Mint! India's #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 15 May 2024, 04:14 PM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started