Devyani International Ltd.
Devyani International Limited (DIL) is a multifaceted quick-service restaurant (QSR) operator that was founded in 1991. It is a well-known global brand and one of India’s largest QSR operators.
Core brands of the company:
KFC, Pizza Hut, and Costa Coffee.
Other brands of the company:
Vaango and The Food Street
Business Presence:
India, Nigeria, and Nepal.
Highlights of FY’22:
KFC:
Strong Performance: KFC has accomplished a lot, as it is now worth a total of ₹10,000 Million to DIL.
Pizza Hut:
Improved Growth Momentum: Pizza Hut’s annual revenue surpassed ₹5,000 Million, an increase of 85% over the past year.
Costa Coffee:
Impeccable Efforts: Costa Coffee Brand’s contribution margins were impressive in the disruptive times, giving them the confidence to rapidly scale up the brand.
Other Brands:
They also run stores for in-house brands, such as Vaango and The Food Street, along with the core brands. They usually run these outlets within larger food courts in shopping malls and airports.
Strengths:
- The industry is expected to grow at a multi-fold rate due to rising disposable incomes, busier lifestyles, and a higher percentage of young and working professionals.
- Consumption patterns and spending habits are changing as a result of urbanization and family nuclearization, with more eating out and home delivery taking place.
- The convenience of app-based ordering and delivery to the doorstep is expected to keep the market growing.
- The industry’s growth is aided by low-cost internet access and higher penetration of low-cost smartphones and social media platforms.
- +28.69% returns over the past 5 years, and +23.48% returns over the past 1 year.
- Mutual funds have increased the holdings of their stocks.
- Strong EPS growth and improved ROA (YoY).
- Net profit improved with an increased profit margin YoY in the past 2 years.
- Reduced and low-debt corporation.
- Zero stock pledges from promoters.
Weakness:
- The price is below the short, medium, and long-term averages, indicating a weak momentum.
- Promoters are decreasing their shareholding.
- Net cash flow is declining as the company is unable to generate net cash.
- RSI is stating price weakness.
Restaurant Brands Asia Ltd.
Restaurant Brands Asia Ltd., also known as Burger King India Ltd., is a publicly-traded company that was founded on November 11, 2013. The company prepares and sells ready-to-eat foods such as burgers, fries, and beverages.
Core brand of the company:
Burger King India Ltd.
Business Presence:
India
Highlights of FY’22:
- Restaurant Growth: 315 restaurants as of March 31, 2022; Q4 FY22 Net Addition: 21 restaurants (Opened: 22; Closed: 1); FY 22 Net Addition: 50 stores (Opened: 51, Closed: 1); 13 restaurants are under construction and 50 restaurants in the queue.
- BK APP: 3 Million APP installs; revenue growth of 24% QoQ; continuously growing in double digits for the past four quarters.
- BK Café: On November 9th, 2021, the first BK Café was launched; 18 BK Cafés opened in Q3 and in Q4, 17 BK Cafés opened, for a total of 35 BK Cafés as of March 31, 2022.
Strengths:
- A strong consumer proposition helps BK restaurants attract customers and increase footfall.
- Brand positioning that targets India’s large and growing millennial population.
- Mutual funds have increased the holdings of their stocks.
- Since the last two years, the return on equity (ROE) has been improving.
- Net profit improved with an increased profit margin in both QoQ and YoY. Growth in revenue in the past 3 quarters.
- Low-debt corporation.
- Stock with Low PE.
- Zero stock pledges from promoters. FII and Mutual Funds are increasing their shareholdings.
Weakness:
- -17.74% returns for over 5 years, and -21.07% returns over the past 1 year.
- QoQ, promoter holding decreased by more than 2%.
- Non-core income is on the rise.
Jubilant FoodWorks Ltd.
Jubilant FoodWorks Limited is a subsidiary of the Jubilant Bhartia Group, which was founded in 1995 and began operations in 1996. With 602 Dominos Pizza Stores across India, the company is the largest and fastest-growing food service company in India (as of June 30th, 2013), with a market share of 67% in India’s organized pizza market.
Core brands of the company:
Domino’s Pizza, Dunkin’ Donuts, and Popeyes.
Other brands of the company:
Hong’s Kitchen and Ekdum!
Business Presence:
India, Nepal, Bangladesh, and Sri Lanka.
Highlights of FY’22:
- The revenue from operations increased by 12.9% YoY to Rs. 11,579 million.
- The delivery channel has retained its steady growth. In FY22, 80 new Domino’s Pizza outlets, 4 new Popeyes outlets, and 1 new Dunkin’ Donuts, Hong’s Kitchen, and Ekdum outlets opened.
- Procured a 100% stake in the Bangladesh subsidiary.
Strengths:
- Over 2.8 years, the Nifty 500 returned 109%, and over 5.5 years, the Nifty 500 returned 336%.
- Mutual funds have increased the holdings of their stocks in the last month.
- Low-debt corporation.
- The core business’s strong cash-generating ability has improved cash flow from operations over the last two years.
- Mutual Funds increased their shareholding in Q4, FY22.
Weakness:
- Net profit declined with a decreasing profit margin in both QoQ and YoY. Degrowth in revenue, profits, and operating profit margin in QoQ.
- Declined net cash flow.
- The price is below the short, medium, and long-term averages, indicating a weak momentum.
- High stock pledges from promoters. Insiders sold stocks.
- Non-core income is on the rise.
- Stock with a high PE.
