Devyani International Limited saw its share price climb approximately 9% after the company reported a four-fold jump in first-quarter profit alongside improved operating margins.

Devyani International is one of the largest quick-service restaurant franchise operators in India, managing brands including KFC, Pizza Hut, and Costa Coffee across the country. The company is part of the RJ Corp group and is listed on Indian stock exchanges. India's QSR sector has been one of the fastest-growing segments in the country's retail food market, driven by rising urban incomes, expanding mall footprints, and increasing acceptance of organized food chains among younger consumers.

According to the Q1 results, Costa Coffee's revenue rose 7% year-on-year to ₹212.5 crore, despite a reduction in the total number of outlets. This translates into higher revenue per store, indicating improved productivity at existing locations. The focus on store-level economics comes at a time when Indian QSR operators have been under pressure from elevated food inflation and rising input costs, making per-store profitability a critical metric for investors monitoring the sector.

Costa Coffee, the British multinational coffeehouse chain acquired by The Coca-Cola Company in 2019, is operated by Devyani International in India under a franchise arrangement. The brand competes in India's rapidly expanding premium coffee market, which has seen growing demand from urban consumers alongside both international chains and domestic specialty coffee brands.

The company stated that it is adopting a more disciplined and selective approach to its expansion strategy. Management indicated that this measured approach to new store openings is intended to strengthen the premium coffee chain's positioning, which Devyani International considers one of its key growth drivers.

The combination of profit growth, margin expansion, and improved per-store revenue productivity at Costa Coffee contributed to the positive market reaction.

Source: CNBC-TV18