Driven by high debt relative to equity, short-term liabilities exceed short-term assets, the company is currently loss-making.
In simple words: The company is currently losing money, with both sales and profits growing well. Debt is the main factor to watch.
Decision support, not a buy or sell call.
As of 18 Oct 2026, 6:05 pm
Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.
The 60-second version of Devyani International Limited — what it does, how it earns, and who it competes with, before any of the numbers below.
What does this company do?
Devyani International Limited develops, manages, and operates quick service restaurants and food courts in India, Nepal, Nigeria, Thailand, and internationally. It operates outlets under the KFC, Pizza Hut, Costa Coffee, Vaango and other brands.
IndustryRestaurants
SectorConsumer Cyclical
Employees15,955
Annual revenue₹5,571 Cr
How does it make money?
Turns over ₹5,571 Cr a year. Of every ₹100 of sales, about ₹-1 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 15,955 employees supports ₹34.9 lakh of revenue a year, the signature of a people-led business.
EBITDA margin16.0%
Net margin-0.7%
Revenue / employee₹34.9 lakh
Who are its competitors?
The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.
MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%
TITAN COMPANY LIMITEDP/E 68.5x · ROE 36.7%
TRENT LTDP/E 87.2x · ROE 25.9%
AVENUE SUPERMARTS LIMITEDP/E 69.9x · ROE 12.7%
What is its competitive advantage?Little sign of one
Returns on capital of 4.3% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.
ROCE4.3%
ROE-2.5%
Peer median ROE25.9%
What is the outlook?
18 analysts covering the stock expect revenue to grow about 13.2% and earnings to grow about 162.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.
Est. revenue growth+13.2%
Est. earnings growth+162.0%
Analysts18
What has been driving growth?
Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +87% while net margin moved -108% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.
Revenue effect+87%
Margin effect-108%
DalalBaazaar Score
36/ 100
Weak
Weighted across six categories. Every point is explained below.
✗ Return on equity is negative
✗ ROE has fallen by 29.8 points over the period
Quality vs. Valuation
Company Quality
39/ 100
Weak
How good the business is, ignoring the share price entirely.
vs
Valuation
26/ 100
Expensive
What you are being asked to pay, ignoring how good the business is.
Weak on business quality and not cheap enough to compensate.
vs. its own history
Not enough price and earnings history
vs. sector peers
Not enough peers with a usable P/E
vs. generic bands
N/A
No P/E — the company is lossmaking
P/E (Trailing)
Not meaningful
P/B
9.74x
EV/EBITDA
20.6x
PEG
—
Dividend Yield
None
What's Good / What's Bad
🟢 What's Going Well1
Cash generation is improving
Free cash flow is up 130% over 3 years.
🔴 What Needs Attention6
Margins are compressing
EBITDA margin has slipped from 22.5% to 16.0% over 3 years.
Debt is rising
Total debt is up 142% over 3 years — worth checking what it funded.
Return on equity is falling
ROE has dropped from 27.3% to -2.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 15.7% to 4.3% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 122% against revenue growth of 87% — customers are taking longer to pay.
Short-term liquidity is tight
Current ratio of 0.51 — near-term obligations exceed near-term assets.
Red Flags
7 items require attention · 5 high · 2 watch
🔴Debt has risen sharplyFinancial
Total debt is up 142% over 3 years, from ₹1,565 Cr to ₹3,783 Cr.
🔴High leverageFinancial
Debt/Equity of 2.03x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 0.8x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹39 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.5 points, from 22.5% to 16.0%.
🟡Receivables growing faster than salesFinancial
Receivables up 122% against revenue up 87% — sales are being booked faster than they are collected.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.51 — near-term obligations exceed near-term assets.
Investment Thesis
🟢 Bull CaseWhat could make this work?
No clear supporting case emerges from the available numbers.
🔴 Bear CaseWhat could go wrong?
Margins are being competed away
EBITDA margin has fallen from 22.5% to 16.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 4.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 122% against revenue up 87%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 27.3% to -2.5%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today
1Revenue growth stays above 17% a year✓ 23.3% CAGR
Latest reported year was 16.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 14%✓ 16.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✗ 0.8x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹460 Cr
Profit that never becomes cash eventually stops being profit.
Investment Checklist
6 / 12 checks passed
✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish
Price history
Quick Metrics
3 good · 2 neutral · 6 weak
Market Cap
₹15,021 Cr
Small Cap
Smaller company — thin liquidity and deep drawdowns are normal here
P/E (Trailing)
Not meaningful
Loss-making
Earnings are negative, so a P/E multiple can't be read here
P/B Ratio
9.74x
Rich
Steep premium to book — needs high, durable returns to justify
EPS (TTM)
₹-0.08
Loss-making
Negative earnings per share — the business is losing money
ROE
-2.5%
Weak
Weak capital efficiency
ROCE
4.3%
Weak
Low return on total capital employed
Debt/Equity
2.03x
High
High leverage
Revenue Growth (YoY)
16.5%
Healthy
Healthy top-line growth
Profit Growth (YoY)
300.0%
Healthy
Profits growing at a healthy clip
Dividend Yield
None
None
No dividend yield reported — usually means no payout, but verify if one was recently initiated
Free Cash Flow
₹460 Cr
Cash generative
Generates cash even after funding its capex
More Metrics
CMP
₹121.83
P/E (Forward)
115.1x
Operating Margin
4.7%
Weak
Thin margins leave little room for error
Net Margin
-0.5%
Weak
Very little revenue reaches the bottom line
Current Ratio
0.51
Tight
Tight short-term liquidity
Beta (vs Nifty)
0.33
Defensive
Steadier than the market
52W Range Position
39%
Mid-range
Mid-range
Technical Snapshot
SMA 20 / SMA 50
130.4 / 136.2
Bearish alignment (short < long)
Price vs SMA 200
Below
Long-term downtrend
RSI (14)
20.0
Oversold zone
Financial Trend (4-Year)
Metric
FY23
FY24
FY25
FY26
3Y CAGR
Revenue
₹2,973 Cr
₹3,532 Cr
₹4,921 Cr
₹5,571 Cr
+23.3%
EBITDA
₹669 Cr
₹565 Cr
₹853 Cr
₹890 Cr
+10.0%
EBITDA Margin
22.5%
16.0%
17.3%
16.0%
—
PAT (Net Profit)
₹265 Cr
₹47 Cr
₹9 Cr
-₹39 Cr
—
EPS
₹2.19
₹0.39
₹0.08
₹-0.31
—
ROE
27.3%
4.5%
0.8%
-2.5%
—
ROCE
15.7%
4.8%
6.6%
4.3%
—
Total Debt
₹1,565 Cr
₹2,906 Cr
₹3,188 Cr
₹3,783 Cr
+34.2%
Free Cash Flow
₹200 Cr
₹114 Cr
₹409 Cr
₹460 Cr
+32.1%
🟢 Revenue has grown at 23.3% a year over 3 years.
🟢 EBITDA has grown at 10.0% a year over 3 years.
🔴 EBITDA Margin has fallen from 22.5% to 16.0% over 3 years (-6.5 pts).
🔴 PAT (Net Profit) has turned negative, from ₹265 Cr to -₹39 Cr.
🔴 EPS has turned negative, from ₹2.19 to ₹-0.31.
🔴 ROE has fallen from 27.3% to -2.5% over 3 years (-29.8 pts).
🔴 ROCE has fallen from 15.7% to 4.3% over 3 years (-11.4 pts).
🔴 Total Debt has grown at 34.2% a year over 3 years.
🟢 Free Cash Flow has grown at 32.1% a year over 3 years.
🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.
🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.
Watch Items
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.
DalalBaazaar Thesis
🔴Business QualityWeak6.2/20
🔴Financial HealthStretched7.1/20
🟢GrowthStrong13/20
🔴ProfitabilityWeak2.5/15
🔴ValuationDemanding2.6/15
🔴RiskHigh4.3/10
Weak on the fundamentals
Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 5 high-severity red flags sit above this conclusion and should be read first.
