Devyani International is gearing up for a bold expansion into India’s fast-growing biryani segment by considering the acquisition of a controlling stake in Sky Gate Hospitality, the parent company of Biryani By Kilo (BBK). The move marks a strategic shift for Devyani, known for operating global QSR giants like KFC, Pizza Hut, and Costa Coffee, toward homegrown food brands.
The company’s board is scheduled to meet on April 24 to discuss the potential acquisition. Besides BBK, Sky Gate Hospitality also owns Goila Butter Chicken, The Bhojan, and Get-A-Way — a diversified food portfolio that could significantly strengthen Devyani’s presence in the delivery-driven Indian food market.
Strong Growth Potential
BBK has emerged as a prominent player in the biryani space, operating nearly 100 stores across 45 cities. Its revenue has grown at a CAGR of 55% between FY19 and FY24, reaching ₹300 crore. The impressive numbers highlight BBK’s appeal in a market that continues to embrace online food ordering and home delivery.
Market Reaction and Brokerage Views
Investor confidence is rising. Devyani International’s shares closed at ₹172 on the NSE, up 4.12%, adding to a 10% rally seen last week. Brokerage firms have responded enthusiastically to the news:
- Emkay Global Financial Services has upgraded the stock to ‘Buy’ from ‘Add’, increasing its target price by 18% to ₹200.
- Emkay cited the strategic synergy and potential scale of the biryani segment, calling it a “promising entry point into a delivery-friendly category”.
- The firm has revised its valuation multiple to 30x FY27 EBITDA, up from 26x, reflecting a bullish outlook.
What This Means for Devyani
This move could signal the start of a broader diversification strategy for Devyani International, allowing it to capitalize on Indian tastes and food habits with scalable, tech-enabled brands. The acquisition could enhance its QSR portfolio and reduce its reliance on international franchises.
As India’s biryani market continues to grow rapidly, this acquisition may not only give Devyani a larger share of the delivery space but also help it compete more effectively with other Indian QSR players like Rebel Foods and Wow! Momo.
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