{"id":877,"date":"2021-08-05T06:39:28","date_gmt":"2021-08-05T06:39:28","guid":{"rendered":"https:\/\/www.invest19.com\/blog\/?p=877"},"modified":"2021-08-05T06:39:29","modified_gmt":"2021-08-05T06:39:29","slug":"devyani-int-has-hit-the-market-its-time-to-deep-dive-into-its-financials","status":"publish","type":"post","link":"https:\/\/www.invest19.com\/blog\/devyani-int-has-hit-the-market-its-time-to-deep-dive-into-its-financials\/","title":{"rendered":"Devyani Int. has hit the market! It\u2019s time to deep dive into its financials."},"content":{"rendered":"<div style=\"margin-top: 0px; margin-bottom: 0px;\" class=\"sharethis-inline-share-buttons\" ><\/div>\n<p>Devyani International- an\noperator of finger licking good KFC, cheesiest Pizza Hut and brewed Costa\nCoffee Quick Service Restaurants (QSRs) is available for subscription now. The\nIPO has been fully subscribed on the first day which shows the stellar response\nof investors towards the delicious IPO. Earlier, the management of Devyani Int.\nhad filed their DRHP with an issue size of Rs. 1,838 cr. The issue size is a mix\nof fresh issue of Rs. 440 cr. and offer for sale of Rs. 1,398 cr. at the upper\nprice band.<\/p>\n\n\n\n<p>Under the Offer for Sale, Dunearn\nInvestment Pte. Ltd. and RJ Corp are reducing their stake while the net\nproceeds from fresh issue will be utilized for repayment\/prepayment of certain\nborrowings.<\/p>\n\n\n\n<p><strong>Brands\nunder Devyani International<\/strong><\/p>\n\n\n\n<p>Devyani International is the largest franchisee of Yum Brands in India. The firm is amongst the largest operators of quick service restaurants (QSR) in India and operates 655 stores across 155 cities, as of March 31, 2021. Their business is broadly classified into three verticals that include stores of KFC, Pizza Hut and Costa Coffee operated in India referred to as \u2018Core Brands\u2019 while brands such as Vaango and Food Street referred as their \u2018Other Business\u2019.<\/p>\n\n\n\n<p>Must Read: <a href=\"https:\/\/www.invest19.com\/blog\/kfc-pizza-hut-and-costa-coffee-operator-devyani-int-ipo-will-hit-the-primary-market-on-aug-04\/\">KFC, Pizza Hut and Costa Coffee operator Devyani Int. IPO will hit the primary market on Aug 04.<\/a><\/p>\n\n\n\n<p><strong>Growth in Core brand Outlets<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"604\" height=\"352\" src=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-188-1.png\" alt=\"\" class=\"wp-image-880\" srcset=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-188-1.png 604w, https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-188-1-300x175.png 300w, https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-188-1-520x303.png 520w\" sizes=\"auto, (max-width: 604px) 100vw, 604px\" \/><\/figure>\n\n\n\n<p><strong>Observations:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Growth in KFC stores is outperforming other\ncore brands. KFC stores have seen a growth rate of 40%<\/li><li>Growth in Pizza Hut stores seems sluggish. The\ncompany has opened only 29 stores.<\/li><li>Costa Coffee stores are closed heavily and\ncompany seems to focus mainly on KFC and Pizza Hut stores.<\/li><\/ul>\n\n\n\n<p><strong>Break-down\nof revenue from core brands<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"466\" height=\"286\" src=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-189-1.png\" alt=\"\" class=\"wp-image-881\" srcset=\"https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-189-1.png 466w, https:\/\/www.invest19.com\/blog\/wp-content\/uploads\/2021\/08\/Screenshot-189-1-300x184.png 300w\" sizes=\"auto, (max-width: 466px) 100vw, 466px\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li>Company generates 81.5% or Rs. 9,776.06\nmillion of their total revenues from the Core Brands- KFC, Pizza Hut and Costa\nCoffee.<\/li><li>KFC generates 66% of the revenues from the\nCore brands.<\/li><li>Same store sales growth has fallen sharply\nlast year in KFC, Pizza hut and Costa Coffee by 33.69%, 30.25% and 61.64%\nrespectively.<\/li><\/ul>\n\n\n\n<p><strong>Financial\nStatements<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"\"><tbody><tr><td>\n  Income Statement (In\n  Millions)\n  <\/td><td>   \u00a0   FY21<\/td><td>   FY20   <\/td><td>   FY19<\/td><\/tr><tr><td>\n  Gross Operating Income\n  <\/td><td>\n  11988.95\n  <\/td><td>\n  15350.41\n  <\/td><td>\n  13236.83\n  <\/td><\/tr><tr><td>\n  Cost of Employee &amp;\n  Inventory\n  <\/td><td>\n  4989.92\n  <\/td><td>\n  6858.81\n  <\/td><td>\n  5804.39\n  <\/td><\/tr><tr><td>\n  Impairment of\n  Non-Financial Assets\n  <\/td><td>\n  480.05\n  <\/td><td>\n  38.77\n  <\/td><td>\n  247.53\n  <\/td><\/tr><tr><td>\n  Other Expenses\n  <\/td><td>\n  4089.18\n  <\/td><td>\n  5750.21\n  <\/td><td>\n  4511.97\n  <\/td><\/tr><tr><td>\n  EBITDA\n  <\/td><td>\n  2429.8\n  <\/td><td>\n  2702.62\n  <\/td><td>\n  2672.94\n  <\/td><\/tr><tr><td>\n  Depreciation\n  <\/td><td>\n  2294.53\n  <\/td><td>\n  2233.14\n  <\/td><td>\n  2028.26\n  <\/td><\/tr><tr><td>\n  Interest \n  <\/td><td>\n  1528.03\n  <\/td><td>\n  1584.37\n  <\/td><td>\n  1356.04\n  <\/td><\/tr><tr><td>\n  Profit Before Tax\n  <\/td><td>  -1392.76   <\/td><td>  -1114.89   <\/td><td>\n  -711.36\n  <\/td><\/tr><tr><td>\n  Exceptional Items\n  <\/td><td>\n  -568.84\n  <\/td><td>\n  -345.78\n  <\/td><td>\n  -131.48\n  <\/td><\/tr><tr><td>\n  &nbsp;Tax\n  <\/td><td>\n  -10.68\n  <\/td><td>\n  18.41\n  <\/td><td>\n  13.02\n  <\/td><\/tr><tr><td>\n  Profit After Tax\n  <\/td><td>   \u00a0-813.24<\/td><td>   -787.52   <\/td><td>   -592.9   <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li>Revenues have been declined in FY21 by 22% due\nto reduced spending by people and restrictions on movement of man, material and\nmachines this financial year. <\/li><li>Majority cost of a food retail chain is\nallocated to cost of raw foods which has been slipped by 24.52%.<\/li><li>Employee cost of the company has fallen by\n31.5%.Cost of Employee &amp; Inventory is slipped more in comparison with\nrevenues which shows an operational efficiency is achieved by firm.<\/li><li>&nbsp;EBITDA\nfigure is fallen to Rs. 2,429.8 million reduced by 10%.<\/li><li>Net Losses are expanded to Rs. 813.24 million\nfrom Rs.787.52 million. <\/li><li>QSR chain has a free cash flows of Rs.\n1,419.82 million<\/li><li>Devyani Int. is a leveraged company as it has\na debt of Rs. 359.38 cr.<\/li><\/ul>\n\n\n\n<p><strong>Comparative\nanalysis with other listed QSR chains<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"\"><tbody><tr><td>   Paramenters <br>(Figures in cr.)   <\/td><td>   <br>Devyani <br>   International   <\/td><td>   <br>Jubilant<br>   Foodworks   <\/td><td>   <br>Westlife <br>   Development   <\/td><td>Burger <br>   King   <\/td><td>Barbeque<br>   \u00a0Nation   <\/td><\/tr><tr><td>\n  Enterprise Value\n  <\/td><td>\n  10702.04\n  <\/td><td>  48598.26   <\/td><td>\n  8519.7\n  <\/td><td>  7036   <\/td><td>\n  4000\n  <\/td><\/tr><tr><td>\n  Sales\n  <\/td><td>\n  1134.8\n  <\/td><td>\n  3312\n  <\/td><td>\n  986\n  <\/td><td> 494.4   <\/td><td>\n  507\n  <\/td><\/tr><tr><td>\n  EBITDA\n  <\/td><td>\n  227\n  <\/td><td>\n  771\n  <\/td><td>\n  47\n  <\/td><td>\n  15\n  <\/td><td>\n  92.43\n  <\/td><\/tr><tr><td>\n  EV\/Sales\n  <\/td><td>\n  9.4\n  <\/td><td>\n  14.7\n  <\/td><td>\n  8.6\n  <\/td><td>\n  14.2\n  <\/td><td>\n  7.9\n  <\/td><\/tr><tr><td>  EV\/EBITDA   <\/td><td>\n  47.1\n  <\/td><td>\n  63.0\n  <\/td><td>\n  181.3\n  <\/td><td> 469.1   <\/td><td>\n  43.3\n  <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li>Jubilant Foodworks is the only profitable firm amongst the listed QSR chains.<\/li><li>Considering the price band, Devyani Int. IPO is going to list with an Enterprise value of Rs. 10,702 cr.<\/li><li>EV\/Sales of the company stood at 9.4x much lower than the Domino\u2019s operator Jubilant Foodworks and Burger King India while Barbeque Nation claims lowest at 7.9x followed by Westlife.<\/li><li>EV\/EBITDA of Devyani Int. stood at 47.1x much lower than Jubilant Foodworks, Westlife and Burger King while a little higher than Barbeque Nation.<\/li><\/ul>\n\n\n\n<p>Also Read: <a href=\"https:\/\/www.invest19.com\/blog\/krsnaa-diagnostics-ipo-will-hit-the-primary-market-on-aug-04-should-you-subscribe\/\">Krsnaa Diagnostics IPO will hit the primary market on Aug 04. Should you subscribe?<\/a><\/p>\n<div class='epvc-post-count'><span class='epvc-eye'><\/span>  <span class=\"epvc-count\"> 3,107<\/span><\/div><div class=\"pld-like-dislike-wrap pld-template-1\">\n    <div class=\"pld-like-wrap  pld-common-wrap\">\n    <a href=\"javascript:void(0);\" class=\"pld-like-trigger pld-like-dislike-trigger \" title=\"\" data-post-id=\"877\" data-trigger-type=\"like\" data-restriction=\"ip\" data-ip-check=\"0\" data-user-check=\"1\">\n                        <i class=\"fas fa-thumbs-up\"><\/i>\n                    <\/a>\n    <span class=\"pld-like-count-wrap pld-count-wrap\">5    <\/span>\n<\/div><\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Devyani International- an operator of finger licking good KFC, cheesiest Pizza Hut and brewed Costa Coffee Quick Service Restaurants (QSRs) is available for subscription now. [&hellip;] <span class=\"read-more-link\"><a class=\"read-more\" href=\"https:\/\/www.invest19.com\/blog\/devyani-int-has-hit-the-market-its-time-to-deep-dive-into-its-financials\/\">Read More<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":882,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[70,2,7,10],"tags":[],"class_list":["post-877","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ipo","category-stock-market","category-investment","category-featured"],"_links":{"self":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/877","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/comments?post=877"}],"version-history":[{"count":1,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/877\/revisions"}],"predecessor-version":[{"id":883,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/posts\/877\/revisions\/883"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media\/882"}],"wp:attachment":[{"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/media?parent=877"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/categories?post=877"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.invest19.com\/blog\/wp-json\/wp\/v2\/tags?post=877"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}