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Devyani International, which runs KFC, Pizza Hut, Costa Coffee and Biryani By Kilo outlets, reported revenue of ₹1,519 crore for July to September, up 10.4 per cent. Much of that growth came from opening new restaurants. At KFC outlets that were already open a year ago, sales rose just 4.4 per cent.

Crispy golden fried chicken pieces on a paper towel

The quarter in numbers

Devyani’s revenue from operations for the quarter ended 30 September 2026 was ₹1,519.4 crore, against ₹1,376.8 crore a year earlier. For the first half of the financial year, revenue reached ₹3,099.9 crore, up 13.4 per cent.

The company also moved to a small profit before tax of ₹5.7 crore, compared with a loss of ₹26.8 crore in the same quarter last year. For the half-year, profit before tax was ₹29 crore against a loss of ₹24 crore.

Operating EBITDA, calculated before Ind AS accounting adjustments, rose nearly 34 per cent to ₹125.1 crore, a margin of 8.2 per cent. Reported EBITDA was ₹228.6 crore, up 17.6 per cent. Gross margin improved 70 basis points to 68.5 per cent, so the company kept a little more of every rupee after paying for ingredients.

Old stores, slow growth

Same-store sales growth is the number restaurant watchers track most closely. It shows whether outlets that already exist are drawing more customers or bigger bills, rather than growth that simply comes from opening more doors. At Devyani’s KFC outlets, it was 4.4 per cent.

Costa Coffee did better at 9.9 per cent, and Biryani By Kilo came in at 8.1 per cent. Chairman Ravi Jaipuria said positive same-store growth of 4 to 9 per cent ran across the India portfolio, with one exception: Pizza Hut.

The company did not put a number on Pizza Hut, saying only that it improved compared with the previous quarter. Jaipuria still struck a confident note in the results release: “Our growth momentum carried on firmly into the second quarter.”

Same brand, different pace

The contrast with Sapphire Foods is sharp. Sapphire, the other large KFC and Pizza Hut franchisee in India, reported its numbers on 22 October. Its KFC business posted 14 per cent same-store sales growth and 26 per cent revenue growth, while Pizza Hut managed 5 per cent same-store growth.

Sapphire’s overall revenue rose about 20 per cent to roughly ₹888 crore, and its net loss narrowed to ₹1.5 crore from ₹12.8 crore a year earlier. Its figures include Sri Lanka, where it flagged inflation pressure, so the comparison is not exact.

Still, the same bucket of chicken growing at very different speeds under two operators suggests Devyani’s slower pace is not only about demand for the brand. Sapphire also said its Pizza Hut restaurants were still loss-making at the restaurant level, so neither operator has solved pizza yet.

More stores, one company

Devyani added 70 net new stores in the quarter, 68 of them in India and 50 of them KFC outlets. It now runs 1,923 stores in India and 2,325 in all, across India, Thailand, Nigeria and Nepal. Its target for this financial year is 200 to 220 net new stores.

The bigger change is the merger. The Competition Commission of India has approved the merger of Sapphire Foods into Devyani International, and Jaipuria confirmed the approval in the results release. A detailed CCI order on certain related transactions is still to come.

Sapphire had 1,086 restaurants at the end of September. Put the two together and one company would run more than 3,400 restaurants in India and abroad, with both KFC and Pizza Hut franchisees under a single roof.

What to watch

Pizza Hut is the first test. Both operators are still trying to make the brand pull its weight, and a combined company will have to decide how hard to push it.

The second is whether KFC’s same-store growth at Devyani can move closer to the double digits Sapphire is reporting, once the two businesses share menus, pricing and supply chains. The third is the pace of openings against the 200 to 220 store target.

Devyani’s October to December quarter covers the festive and wedding season. Those results will show whether existing stores can start carrying more of the growth, or whether new outlets keep doing the heavy lifting.