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4 reasons why Motilal Oswal Financial Services remains bullish on Devyani International

4 reasons why Motilal Oswal Financial Services remains bullish on Devyani International

4 reasons why Motilal Oswal Financial Services remains bullish on Devyani International
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By CNBCTV18.com Feb 16, 2022 3:09:05 PM IST (Updated)

Devyani International share price: Motilal Oswal Financial Services has a 'buy' call on the Devyani stock with a target price of Rs 210.

Motilal Oswal Financial Services has a 'buy' call on Devyani International -- an operator of KFC and Pizza Hut restaurants in India -- with a target price of Rs 210. The brokerage is positive on the company's strong performance in the October-December period with an overall improvement.

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According to Motilal Oswal Financial Services, both KFC and Pizza Hut saw sequential growth in average daily sales (ADS) in the third quarter of FY22 despite adding a large number of stores in the past five quarters.

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The brokerage remains bullish on Devyani International's prospects on :
  • KFC’s strong brand equity
  • Turnaround in Pizza Hut led by a focus on delivery
  • Sharp network expansion across the portfolio
  • Healthy mid-teen operating profitability
  • Devyani has managed to migrate from a dine-in company to a delivery-focused one, and its management expects this to strengthen further as most new stores are delivery-focused, Motilal Oswal Financial Services added.
    Earlier this month, Devyani reported a net profit of Rs 63.1 crore for the December quarter, up 44.1 percent on a year-on-year basis. Its quarterly revenue increased 64.7 percent on year to Rs 624.4 crore, according to a regulatory filing.


    Devyani International operated 339 KFC stores, 391 Pizza Hut stores and 50 Costa Coffee stores in India, as of December 31, 2021, its management said after the earnings announcement.
    The company opened 192 net new stores across core brands in the nine months to December 31, 2021, with 81 net new stores in Q3, it added.
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