Last Updated: February 21, 2024, 12:37 IST
Devyani International inventory (Representational Photo)
Shares of Devyani International Ltd, the biggest home franchisee for Yum Brands (KFC & Pizza Hut), gained 6% in early commerce
Shares of Devyani International Ltd, the biggest home franchisee for Yum Brands (KFC & Pizza Hut) and the only franchisee for Costa Coffee, gained 6 per cent on February 21 as 5.3 crore shares, representing a 4.4 % stake, within the fast service restaurant operator modified arms in a block deal.
The stake was offered at a flooring worth of Rs 164 apiece, a marginal low cost of 1.2 % from the earlier shut.
While News18.com couldn’t verify the patrons or the sellers, a CNBC-TV18 report stated Yum Restaurant India Private Ltd is the doubtless vendor, divesting your complete 4.4 % stake within the KFC operator. Citigroup Global Markets India is the only book-running lead supervisor.
The report got here at a time the QSR {industry} is seeing weak unit economics, throughout dine-in and supply codecs. Despite these industry-wide difficulties, KFC has proven resilience in managing the disaster successfully, Motilal Oswal Securities stated in a current notice.
“On the other hand, PH has been struggling, partly attributed to intense competition in the market. Store expansion plans remain buoyant for Devyani despite near-term industry challenges. The overall guidance of reaching 2,000 stores by FY24 remains on track. We maintain a cautious stance due to the ongoing demand challenges in the near term. The recent correction in the stock partially covers up the near-term pressure,” it stated. We reiterate our BUY score on the inventory with a goal of Rs 195,” it stated.
The Yum stake sale is believed to be valued at Rs 814.80 crore and Citigroup Global Markets India is believed to be the only e book working lead supervisor (BRLM).
A current Elara Securities report advised Devyani International was actively engaged on enhancing its supply efficiency and fostering nearer relationships between its shops and supply providers. It was planning to broaden presence of Pizza Hut and KFC retailers which can be particularly geared towards supply. This included collaborating extensively with supply aggregators to leverage the fast-growing on-line supply section.
“In case of Pizza Hut India, it has shifted focus toward a delivery-centric model while maintaining strategically located dine-in and flagship stores. The accelerated expansion of delivery-focused stores has resulted in significantly improved delivery times, which, in turn, has enhanced overall consumer experience. This transition from large dining-oriented stores to smaller, delivery-focused formats has not only positively affected unit-level performance but also has facilitated a faster nationwide expansion,” it stated.
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