Aniket PujariManish Dawar, the incoming president and chief executive, said the company will add zero net new Pizza Hut outlets in calendar 2025 and 2026, shifting attention instead to fixing the fundamentals.
A key priority is shutting loss-making stores, alongside upgrading technology, an area where Devyani has fallen behind its peers, he said, adding the clean-up exercise could take a couple of years.
Pizza Hut will also see sharper marketing, a stronger innovation pipeline, and more targeted online-offline strategies as the company works to revive demand, he said.
Dawar acknowledged that Devyani’s earlier operating structure, split across Yum! Brands, Sapphire Foods, and Devyani slowed decision-making and technology investments, leaving them less nimble than competitors.
The ongoing merger with Sapphire Foods is aimed at fixing that, with Devyani set to take control of technology and supply-chain operations, which management believes will help accelerate Pizza Hut’s reset.
Dawar said the company has begun experimenting with promotions, value deals, and differentiated online and offline strategies, which helped deliver positive same-store sales growth in January.
“We’ve started taking initiatives, and we’re seeing early results,” he said. “But it’s too early to conclude. We’ll come back with a sustainable strategy as things evolve.”
Leadership changes
Devyani International on Wednesday announced that Dawar will be appointed as the new president and CEO, effective 1 April 2026, transitioning from his role as chief financial officer to lead the company’s growth and the merger with Sapphire Foods.
He succeeds Virag Joshi, who will remain with the company as a non-executive director. Virag Joshi, who spent over two decades at Devyani, will remain closely associated with the company in a non-executive role, ensuring continuity as the group transitions into its next phase of growth.
As part of the CEO transition, Devyani announced new leadership changes. Anupam Kumar, who is currently executive vice-president-finance, will become the new CFO. He brings over 20 years of experience, having worked at Vedanta and Walker Chandiok & Co. before joining Devyani’s parent RJ Corp.
The company also appointed Neeraj Tiwari as chief technology officer, highlighting its focus on a digital-first approach in the QSR industry. Tiwari has previously led digital technology at Americana Group, a major restaurant operator in the Gulf region, and has also worked with Zee Entertainment and Jubilant FoodWorks.
Business restructuring
The pizza chain’s reset comes right after the company announced a merger with rival Sapphire Foods on 1 January, creating a single operator for Yum! Brands in India at a time when the fast-food sector is under pressure from weak demand and shrinking margins.
The deal, expected to close in 15-18 months, aims to deliver ₹210-225 crore in annual synergies from the second year, while giving Devyani scale and tighter control over technology and supply chains—critical as Pizza Hut struggles in India and globally.
Its revenue from operations during the December quarter of 2025-26 stood at ₹1,440.9 crore, up 11.3% year-on-year.
As of 31 December 2025, Devyani International operated 2,279 restaurants worldwide, up from 2,039 at the end of March 2025.
In India, it had 1,877 outlets, up from 1,664 just nine months ago. Among Yum! Brands, KFC was the largest chain, growing from 696 to 788 stores. Pizza Hut added only nine new locations, increasing its total to 639.
Franchise brands such as Costa Coffee and Tealive saw a slight decline, going from 220 to 211 locations. However, Devyani’s own brands, including Vaango, Biryani By Kilo, and Goila Butter Chicken, more than doubled their footprint, expanding from 96 to 218 stores.
Internationally, Devyani had 402 restaurants in Thailand, Nigeria, and Nepal, up from 375 in March, with most additions in Thailand.
Sandeep Abhange, equity research analyst, consumer and staples at LKP Securities, said demand in the December quarter remained uneven, with pressure on discretionary spending delaying a broader consumption recovery. “Festive-led promotions helped improve trends towards November and December, but management is guiding for a gradual recovery through Q4 rather than a sharp rebound,” he said.
He noted KFC continues to be Devyani’s strongest performer, delivering positive same-store sales growth (SSSG) and healthy store-level margins. “Pizza Hut India remains in negative SSSG territory, which has led to ongoing store rationalization and portfolio pruning,” he said.
He added delivery now accounts for nearly 55-60% of sales, supported by value-led offerings and deeper digital penetration, even as discounting intensity on aggregator platforms has been rationalized to protect margins. “Traffic trends are beginning to stabilize, with mature stores showing better throughput.”
On expansion, Abhange said Devyani added around 250 gross stores over the past 12 months, even as it selectively closed underperforming Pizza Hut outlets. “The company is taking a calibrated approach to growth, focusing on tier II and tier III cities where store economics are better, while prioritizing return on invested capital over headline expansion.”
Margins also showed early signs of recovery in the quarter, helped by easing food cost inflation in key inputs such as poultry, cheese, and edible oils, although employee costs remain elevated due to wage pressures and staffing at new stores. “Store-level Ebitda improved sequentially, and management expects a gradual margin recovery trajectory,” Abhange said.
Shares of Devyani International surged over 6% to close at ₹123.30 on BSE on Wednesday, reflecting a strong positive market reaction to the development.
