INDIA—Deyvani International, KFC India’s operator, has reported a better-than-expected Q2 2024 profit. The consolidated net profit increased to INR 301.1 million (US$3.6 million) for the reported quarter, compared to analyst predictions of INR 207.5 million (US$2.46 million). 

The operator attributes this impressive performance to discounts and other value promotions offered to customers. 

Deyvani International reported this strong performance despite a challenging inflation-ridden QSR environment. 

High inflation reported in the past few years has significantly increased the cost of raw materials and ingredients, which caused a significant increase in prices for customers. Cash strapped customers, especially those living in rural India have significantly cut down on eating out, which has stifled demand in the QSR sector. 

It has also caused a significant increase in interest rates, making it more expensive for QSR chains to achieve adequate capitalization. Deyvani International’s performance is considered an outlier in the QSR sector, as many of its competitors have reported a significant decline in consolidated net profits in Q2 2024. 

Last week, Restaurant Brands Asia, which operates Burger King and Popeyes chains in India, reported a consolidated net loss of INR 493.6 million (US$5.9 million) in Q2 2024 on a year-on-year basis. This was the operator’s 15th consecutive quarterly loss.  

The Burger King India operator attributed this consecutive net loss to a 5% increase in ingredients and raw materials. 

Sapphire Foods, KFC, and Pizza Hut’s operator in India reported a 68% decline in consolidated net profits in Q2 2024 to INR 85.2 million (US$1.02 million) year-on-year (YoY) compared to an expected profit of INR 173.9 million (US$2.07 million). 

The operator revealed prices of ingredients increased by 10%, increasing total expenses by 13% to INR 7.12 billion (US$85 million). 

Westlife Foodworld, which operates McDonald’s in India, also recorded an 88.7% drop in consolidated net profits in the reported quarter. 

Deyvani’s outlier performance is attributed to the value deals that were offered before competitors. The operator offered chicken rolls at INR 99 (US$1.2) at its KFC outlets earlier in the year. 

The strong performance can also be attributed to its Costa Coffee Chain, whose operational revenue increased by 44% to INR 12.22 billion (US$145.2 million). 

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