Honestly, if you’ve walked into a KFC or a Pizza Hut in India lately, you’ve probably seen the crowds. It's buzzing. But if you look at the Devyani International share price on your screen, the story feels... different. Confusing, even.
The stock has been a bit of a roller coaster. As of mid-January 2026, we’re seeing the price hover around the ₹132 to ₹135 range. It’s a sharp contrast to those highs we saw back in 2024 when everyone thought the QSR (Quick Service Restaurant) sector was an unstoppable money printer. Now? Investors are asking if the crispy chicken giant has lost its crunch.
The Massive Merger Nobody Expected
The biggest news right now isn't actually the daily price ticker. It’s the bombshell announcement from January 1, 2026. Devyani International and Sapphire Foods India—the two biggest players holding the keys to the Yum! Brands kingdom in India—are merging.
🔗 Read more: Sentence with Big Business: Why Most Corporate Writing Fails
This is huge. Basically, they’re combining to create a $1 billion revenue powerhouse. The deal is a share swap where Devyani will issue 177 shares for every 100 shares of Sapphire.
Why does this matter for the Devyani International share price?
Because for years, these two were fighting each other for territories. Now, they’re one team. They’re projecting annual synergies—that's corporate speak for "saving money"—of about $23 million to $25 million within two years. But mergers are messy. They take 12 to 15 months to get all the legal stamps, and the market is currently in a "wait and see" mode.
🔗 Read more: Why Staff of the Month Programs Usually Fail and How to Fix Them
Why the Bottom Line is Bleeding
Top-line growth is great. Everyone loves seeing more stores. But the recent Q2 FY26 results were a bit of a gut punch. Devyani reported a consolidated net loss of roughly ₹22 crores.
Compare that to the same quarter last year. It’s a massive swing into the red. Revenue actually grew by about 12.6% YoY, reaching over ₹1,380 crores, but the costs of doing business just exploded. We’re talking about:
- Cheese and Oil: Input costs haven't been kind.
- Marketing Spend: They’ve been aggressive with promos to keep people coming in, which eats the margins.
- Expansion Fatigue: They added 39 new stores in just one quarter. That’s a lot of rent and electricity to pay before a single pizza is sold.
The EBITDA margin slipped to 13.97%. In simple terms? They’re making less money on every bucket of chicken they sell than they used to.
Is the Stock Undervalued or Just Underperforming?
Technically, the stock is in a weird spot. It’s trading below its 100-day and 200-day moving averages. That usually smells like a "bearish" trend to the chart nerds. Yet, some analysts are still banging the drum for it.
Deven Choksey, for instance, has maintained an 'ACCUMULATE' rating with a target price of ₹165. Motilal Oswal has even higher targets, reaching up to ₹180. The "fair value" estimates are all over the place, with some models suggesting ₹115 and others pointing toward ₹170.
It’s a classic tug-of-war. On one side, you have the massive scale of 2,100+ stores and the powerhouse brands like Costa Coffee and Vaango. On the other, you have a company that is technically "destroying shareholder value" right now because its return on capital (ROCE) has dipped below its cost of borrowing.
What Real People are Watching
If you're holding these shares, or thinking about it, don't just look at the P/E ratio. It’s currently negative because they aren't making a profit. Look at the Average Daily Sales (ADS).
During the Q1 and Q2 calls, management admitted that while more people are ordering online via Swiggy and Zomato (about 35-45% of sales), the dine-in numbers have been soft. People are looking for value. That’s why you see the "₹99" deals everywhere. These deals keep the stores busy but they don't exactly make the Devyani International share price skyrocket.
Practical Next Steps for Your Portfolio
- Monitor the Merger Milestones: The Sapphire merger is the catalyst. Watch for the Competition Commission of India (CCI) approvals over the next six months.
- Wait for Margin Stabilization: Don't chase the "dip" blindly. Look for at least two quarters where the net loss turns back into a profit and margins crawl back toward 15-16%.
- Check the "Pizza Hut" Turnaround: Management specifically said they are slowing down Pizza Hut expansion to fix the existing stores. If Pizza Hut starts performing like KFC, the stock will likely re-rate.
- Analyze the Debt: With a debt-to-equity ratio around 2.15, high interest rates are a silent killer here. Any news of debt reduction is a huge green flag.
Investing in QSR is always a long-game. People won't stop eating fried chicken tomorrow, but the company has to prove it can turn that hunger into actual dividends.