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KFC Operator's Shocking Loss: How Festive Season Slump Cost Rs 24 Crore

Devyani International, which operates KFC and Pizza Hut in India, has reported a significant quarterly loss. The company slipped from profit to a Rs 23.9 crore loss in Q2 FY26, blaming the downturn on reduced out-of-home consumption during Shraavana and Navaratri festivals. Unseasonal rains in eastern India during September further dampened sales performance. Despite these challenges, the company managed to grow revenues by 13% year-on-year through aggressive store expansion.

Key Points: Devyani International Q2 Loss KFC Pizza Hut Operator

  • Sequential loss of Rs 23.9 crore from previous Rs 2.2 crore profit
  • 367% YoY loss widening due to festive season impact
  • 13% revenue growth to Rs 1,377 crore with 263 new outlets
  • EBITDA margin decline to 14.1% amid Biryani by Kilo acquisition losses
2 min read

KFC operator Devyani International slips into losses sequentially by Rs 23.9 crore in Q2

Devyani International reports Rs 23.9 crore Q2 loss amid festive season impact and unseasonal rains, despite 13% revenue growth and 263 new store openings.

"Out-of-home consumption getting impacted due to both Shraavana and Navaratri falling in the same quarter - Company Exchange Filing"

Mumbai, Nov 6

Devyani International Limited, the operator of popular quick service restaurant (QSR) brands like KFC and Pizza Hut, on Thursday slipped into losses by Rs 23.9 crore in Q2 FY26 on the sequential basis, from Rs 2.2 crore profit in the previous quarter this fiscal (Q1 FY26).

On the year-on-year basis, the losses widened by a massive 367 per cent, from the loss of Rs 4.9 crore in the same quarter last fiscal (Q2 FY25), as per its stock exchange filing.

The company attributed the losses to out-of-home consumption getting impacted due to both Shraavana and Navaratri falling in the same quarter, according to the exchange filing on Thursday.

Further unseasonal rains – especially in eastern parts of the country during the crucial second half of September also weighed down on the gains.

The company's consolidated revenues grew to Rs. 1,377 crore, posting a 13 per cent YoY growth. The revenue surge was fuelled by the opening of 263 new outlets in the past year, bringing the total store count to 2,184 units.

The company posted Rs. 572.3 crore revenues from KFC India, up 5.3 per cent YoY.

The EBITDA margin fell to 14.1 per cent in the second quarter, down from 16.3 per cent a year earlier, due in part to losses from its acquisition of Sky Gate Hospitality, the parent company of Biryani by Kilo.

It also cited declining demand and strong competition from local restaurants as reasons for the downturn, noting that urban consumption is just starting to recover after a period of slow growth.

The company in April had announced tie-ups with three international brands -- New York Fries, Tealive, and Sanook Kitchen -- to strengthen its overall portfolio.

The company announced that it saw strong momentum in the business revenue from Biryani By Kilo and Goila Butter Chicken from Skygate portfolio post Dussehra. It added that integration of Skygate with DIL remains on track, and remain poised to achieve brand contribution break-even by March 2026.

- IANS

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Reader Comments

R
Rohit P
Opening 263 new outlets while posting losses? That's some aggressive expansion strategy. Hope they don't compromise on quality and service standards in this rush.
A
Anjali F
The real issue is pricing! KFC has become so expensive compared to local chicken restaurants. For the same money, I can get better quality food from my neighborhood dhaba. 💸
S
Sarah B
Interesting that they're diversifying into Biryani By Kilo and other Indian brands. Maybe they've realized that international chains need to adapt more to local tastes in India.
V
Vikram M
The unseasonal rains definitely impacted business. I remember last month in Kolkata, even we avoided going out due to continuous heavy showers. Weather plays a big role in QSR business.
K
Karthik V
Respectfully, blaming festivals and weather seems like an excuse. Many other QSR chains managed better results. Maybe they need to rethink their menu and pricing strategy for the Indian market.
N
Nisha Z
Hope they turn around soon. KFC is still my go-to for quick meals, and their outlets provide good employment opportunities for youth in smaller cities too. 🤞

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