Festive season, rise in vegetarian days dent KFC India's performance in Q2: Devyani International

With the decline in same-store sales growth (SSSG) at KFC India stores, Quick Service Restaurant (QSR) operator Devyani International has attributed to the 'vegetarian trend' in the country. According to Manish Dawar – CFO & Whole-time Director of Devyani International, "Whenever some festival is there we have seen a broader impact. Earlier around Ganpati Puja, it used to be West whereas now we have seen the impact of Ganpati Puja coming in North also. Similarly, earlier the Sawan impact used to be predominantly in the South, and now it has shifted to other regions also. The SSSG predominantly is impacted by the vegetarian days and the geopolitical situation, which continues".

KFC India's average daily sales for Quarter 2 FY25 stood at Rs 96,000 versus Rs 104,000 in the previous quarter. The revenues of the fried chicken-dominated QSR chain stood at Rs 543 crore, declining 2 percent on a quarter-on-quarter basis. KFC in India added 28 new stores in Q2 FY25. With this, the total store count for KFC in India stands at 645 stores as of the end of Quarter 2 FY25.

Separately, Devyani International announced the expansion of its brand portfolio during the Q2 earning call, held this month. The Pizza Hut operator added three new lifestyle QSR brands- ‘tealive’ a Malaysian tea and beverage brand, ‘New York Fries (NYF)’, a Canadian quick service snacking brand, and ‘SANOOK KITCHEN’ a Singapore-based brand specializing in Thai and Asian cuisine.

"DIL is consolidating its strategy of Food on the go and House of Brands", Ravi Jaipuria, Non-Executive Chairman said. "We are supposed to pay to the brand owners is basically the royalty and the rest we manage on our own," Jaipuria added.

Devyani International's consolidated revenue for the quarter 2 surged to Rs 1,222 crore, registering a 49% year-on-year growth. For the first half of the year, consolidated revenues stood at Rs 2,444 crore. However, the company's profit plummeted by 99.95 percent compared to the previous year. The company reported a consolidated net loss of Rs 4.92 crore in Q2 FY25 as against a net profit of Rs 35.82 crore in Q2 FY24.

During the quarter Pizza Hut's revenue increased to Rs 185 crore compared to Rs 182 crore in Q1 FY 25. Whereas, Costa Coffee reported a revenue of Rs 49 crore, a rise of 7.69 percent over Q1 FY 25, mainly due to the expansion of new stores and positive SSSG.