Quick‑service restaurant giant Devyani International Ltd.(DIL) has pulled back plans to expand its Pizza Hut India footprint and is shutting under‑performing stores amid continued weak consumer demand and a strategic realignment of its portfolio.
In its latest quarterly results for Q3 FY26, Devyani, the largest franchisee of Pizza Hut and KFC in India, reported that revenue from Pizza Hut India declined to Rs 178 crore, down 6.3 percent year‑on‑year, while the average daily sales per Pizza Hut outlet remained subdued at around Rs 31,000. The company added 18 net new Pizza Hut stores in the quarter, but management said there will be no net increase in overall Pizza Hut outlets in 2026, with new openings limited to replacing units that are being closed due to poor performance.
DIL’s overall consolidated revenue for the quarter rose 11.3 percent to Rs 1,441 crore, but the group reported a net loss of Rs 10.3 crore, underscoring ongoing pressure across parts of its portfolio. The company said it has begun a turnaround process for the Pizza Hut business by rationalising under‑performing locations and focusing on improving profitability and operational execution rather than continuing footprint‑led growth.
Management indicated that strengthening marketing effectiveness, technology adoption and menu innovation are key priorities for stabilising the pizza business, alongside tighter control of same‑store sales.
The move comes amid a broader period of adjustment for Devyani. Earlier this month, the company elevated Manish Dawar to Whole‑time Director, President and CEO, effective April 1, 2026, signalling a renewed focus on turning around lagging segments and driving improved performance across brands.
Industry analysts say the Pizza Hut brand, historically positioned more as a dine‑in and mid‑premium choice, has struggled in recent quarters against competitors that have strengthened delivery‑led operations and value offerings.
While Devyani continues to expand aggressively in its KFC business and new formats such as Biryani By Kilo, the pizza segment remains a drag on near‑term growth amid caution on discretionary spending.
This development follows broader consolidation moves in the Indian QSR sector. Devyani and Sapphire Foods India Ltd., another major franchise operator for KFC and Pizza Hut brands, have agreed to merge in a deal that would create the largest Yum! Brands franchisee in the country with more than 3,000 stores, a transaction expected to generate cost synergies and unified operational control under one umbrella.
