Devyani Q3 FY26: Pizza Hut India Sales Decline Amid Turnaround Push

Devyani International reported consolidated revenue from operations of INR 14,409 million (₹1,440.9 crore) in Q3 FY26, up 11.3% year-on-year, while operating EBITDA stood near INR 2,267 million with an EBITDA margin of about 15.7%. The company remained in the red for the quarter; press accounts put the net loss at roughly ₹10–11 crore, a detail that varies across reports and should be confirmed in the regulatory filing.

Beneath the headline growth, Pizza Hut India weakened: Q3 revenue fell to INR 1,781 million (₹178.1 crore) from INR 1,902 million a year earlier, and same-store sales contracted sharply by 9.1% in the quarter and 5.8% year-to-date. Management has begun a targeted reset of the Pizza Hut chain, rationalizing loss-making outlets and adopting a selective, capex-light approach to new openings. Non-Executive Chairman Ravi Jaipuria summed the plan: “The company has also started the process of turnaround of the Pizza Hut business by rationalizing loss-making stores. Our idea is to bring a sharper focus to this exercise and therefore we will open new stores only to compensate for the closure of loss-making stores. This will also help us to utilize the existing assets and equipment in our new stores and bring down the capex for the new openings as well.”

KFC India remained the largest revenue contributor with INR 6,032 million (₹603.2 crore) and a gross margin near 69.8%, though KFC’s same-store sales were negative at 2.9% in the quarter. Devyani’s own-brands portfolio including Vaango, Biryani By Kilo and Goila Butter Chicken showed rapid expansion and strong year-on-year growth; one set of table figures places own-brands revenue at INR 602 million (₹60.2 crore), up 204% year-on-year, and reports indicate Biryani By Kilo reached EBITDA breakeven. Some press accounts put own-brands revenue at a higher figure (about ₹94 crore), so the company’s investor materials should be consulted for the definitive number.

The quarter saw 95 net new stores added across the portfolio, lifting the network to 2,279 outlets across India and international markets including Thailand, Nigeria and Nepal. Net unit additions were led by KFC (+54) and Pizza Hut (+18), while franchisee brands recorded net closures (-13) and international markets added +20 stores. The company noted that January saw positive same-store sales across its brands except Pizza Hut: “The company has seen positive same-store sales growth (SSSG) across all its brands in the month of January, except Pizza Hut where the losses are being contained. The management is expecting that if this momentum continues through the quarter, this will lay a strong foundation for future growth,” the company said.

For workers, the Pizza Hut reset implies near-term disruption: closures of unprofitable outlets will affect store-level staff and managers, selective openings that reuse existing assets may limit hiring intensity versus a full-growth push, and redeployment into expanding own-brands or international units may offer alternative opportunities. The leadership transition elevating Manish Dawar to president and CEO from April 1 is being read by investors as continuity at the top, even as markets responded positively to the results.

Investors and employees should watch the company’s Q3 FY26 regulatory filing for clarified PAT figures, the exact own-brands revenue line, and any disclosure of store-level rationalizations and one-time costs. For frontline workers and managers at Pizza Hut, the coming quarters will determine whether the turnaround stabilizes traffic and hours or leads to further consolidation into higher-performing formats.