Devyani International shares surge 16% in two sessions despite reporting higher losses in Q3; here is why

Shares of Devyani International climbed for a second straight straight session on Thursday, February 5. The stock witnessed buying interest despite reporting higher losses in December quarter.

Devyani International shares have surged as much as 16.5% in the last two trading sessions and in intraday deals on Thursday, Devyani International shares climbed as much as 9.45% to hit an intraday high of ₹135.

Devyani International on Wednesday said that its net loss widened to ₹10 crore in December quarter from loss of ₹49 lakh in the same period last year.

Its revenue from operations advanced 11.3% to ₹1,441 crore in the third quarter of current financial year from ₹1,294 crore in the year-ago period.

The company, however, reported strong operating performance as its EBITDA (earnings before interest, taxes, depreciation, and amortization) also known as operating profit advanced 8.3% to ₹231 crore and its EBITDA margin came in at 16%.

Devyani International, which operates KFC and Pizza Hut outlets in India, said that revenue of KFC India rose 6% annually to ₹603 crore, top line of Pizza Hut declined 6.3% to ₹178 crore and revenue from international business advanced 10% to 473 crore.

"We continue to invest in and steadily expand our core business. In India, new store openings accelerated during the quarter with 54 net new KFC outlets. While we added 18 net new stores to Pizza Hut in this quarter, on a cumulative basis during the calendar year 2025 we have not added any net new PH stores. Within our own brands portfolio, we also added 17 new stores to Biryani by kilo and Vaango. The International business added 20 new stores during the quarter between Thailand and Nepal. At the end of Q3’ 2026, the total store count for DIL stood at 2,279 stores," said Ravi Jaipuria, Non-Executive Chairman, Devyani International.

"We have seen positive SSSG across all our brands in the month of January except Pizza Hut where the losses are being contained. We are expecting that if this momentum continues through the quarter, this will lay a strong foundation for future growth," Jaipuria added.

What global investment banks said on Devyani International’s Q3 performance

Global investment bank Jefferies said that elevating CFO Manish Dawar to CEO with effect from April ensures leadership continuity and expects the incoming CEO to take a hard look at the business and steer the franchise back to a sustainable growth trajectory.

Jefferies added that management commentary indicating that the Pizza Hut turnaround is underway, with January 2026 seeing positive same-store sales growth (SSSG) across all brands excluding Pizza Hut.

Bernstein described the CEO transition as the start of a “long road to recovery” for the franchise.

Devyani reported 12% year-on-year consolidated revenue growth in Q3 FY26, of which around 40% was driven by the recent Sky Gate acquisition, which includes Biryani By Kilo and Goila Butter Chicken. However, underlying growth in the core India business remained muted, with KFC India growing 6% YoY, Pizza Hut India declining 6%, Vaango up 3%, and franchisee brands rising 9%, Bernstein noted.

Goldman Sachs acknowledged positive SSSG in January but stopping short of declaring a full recovery. While KFC SSSG came in below its estimates and EBITDA was broadly in line, Goldman flagged a gross margin beat across formats.

As of 12:11 pm, Devyani International shares traded 9.11% higher at ₹134.49, outperforming the NIFTY Smallcap 100 index which was down 1.5%.