Devyani International Ltd (NSE: DEVYANI) Q1 2026 Earnings Call dated Aug. 13, 2025
Corporate Participants:
Unidentified Speaker
Anoop Poojari
Ravi Jaipuria
Raj Gandhi
Virag Joshi,
Manish Dawar
Analysts:
Unidentified Participant
Aditya Soman — Analyst
Gaurav Jogani — Analyst
Sujit Jain — Analyst
Niharika Kamani — Analyst
Saurabh Kundan — Analyst
Percy Panthaki — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Divyani International’s Earnings Conference call. As a reminder, all participant lines will be in the lesson only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anuk Pujari from CDR India. Thank you. And over to you sir.
Anoop Poojari
Thank you. Good afternoon everyone and thank you for joining us. For Devyani International’s Q1FY26 earnings conference call, we have with us Mr. Ravi Jaipuria, non executive chairman of the company, Mr. Raj Gandhi, non executive director, Mr. Viraj Joshi, CEO and whole time director and Mr. Manish Dhawar, CFO and whole time Director of the company. We’ll initiate the call with opening remarks from the Chairman followed by key financial highlights from the cfo. Thereafter we will have the forum open for a question and answer session. Before we begin, I would like to point out that some statements made in today’s call may be forward looking in nature and a disclaimer this effect has been included in the results presentation shared with you earlier.
I would now request Mr. Ravijay Purayar to make his opening remarks.
Ravi Jaipuria
Good afternoon everyone and thank you for joining us today. I am pleased to welcome you all to Debyani International’s post results Earnings Conference call to discuss our performance for the first quarter of the financial year 2526. India’s QSR industry is on a structural growth trajectory underpinned by rising urbanization, growing income levels, increasing digital adaption, increase in female work participation rate and growing appetite for convenience among younger consumers. While near term macro factors have led to phase of soft consumer demand, we see a better outlook for the industry in the coming times. We are we are learning from the evolving consumer trends and we need to reset our business to have a differentiated and compelling proposition for our consumers whether they are online or offline.
We strongly believe that our industry will remain a prime beneficiary of evolving consumer behavior. It’s important that job creation continues in the economy with rising per capita income which will lead to higher consumption. Considering the significant market potential we continue to execute on our long term growth agenda. I am pleased to announce that we have concluded the acquisition of Skygate Hospitality which runs Biryani by Kilo and Goila Butter Chicken brands increased our stake to 86.13%. Subsequently, this gives us access to market leading brands to expand our presence in the Biryani and the Indian Cuisine segment, one of the largest food categories in the country.
Skygate Hospitality has 105 outlets at present and we are confident that these brands will be one of our key contributors to our expansion plans going forward. Across the portfolio, we are expanding our footprint in a focused manner. To this end, we have added new stores in kfc, Pizza Hut and other brands in our geographies. We are also in the process of launching our three new international brands, Neoprize, Tea Life and Sunuk Kitchen in the next quarter. Savers offer providing a 9 for 299 combo this offer has been enthusiastically this offer has been enthusiastically received by the consumer.
We are already seeing significant contribution from this combo despite it being a dine in only offer. Pizza Hut saw the launch of juicy licious range of pizzas with three unique flavors of marinated toppings. Indian Sources we have seen a good response and adaption for the product to provide more value to our customers. We also piloted Unlimited Pizza Friday at select stores. Results are encouraging as the participating stores showed healthy growth in transactions and ads. Our financial performance has been healthy on a consolidated basis. Quarter one revenues reached rupees 1357 crores 11.1% year on year growth.
This growth was driven by healthy growth from kfc Costa and the Food Court business in India and supported by 11.2% year on year growth in the international business. Reported EBITDA came in at Rs 205 crores with EBITDA margins at 15.1%. The slight dip in margin was due to deleverage from lower ADFS year on year and investments in marketing and promotion in the quarter. As one of the leading QSR players, we are well positioned to benefit from the rebound in consumer spending. Our multi cuisine multi format strategy caters to a broad spectrum of consumer tastes, occasions and price points while diversifying away from any category or geography specific risks.
It also enhances our ability to capture opportunities across varied markets and involving consumer trends. With the strength of our brands and our execution capabilities, we are confident of our ability to deliver consistent growth. Our focus will remain on scaling profitability, strengthening both our core and emerging markets and creating long term value for our stakeholders. With this I would like to conclude my address and now I hand over to Manish for the financial highlights.
Manish Dawar
Thank you Mr. Japuria. Good evening everyone. A very warm welcome and thank you for your valuable time for attending Dal’s Quarter 1 FY26 earnings conference call. Our 16th since our listing in August 21st, we ended June 2025 with a total store count of 2145 stores comprising of 1067 KFC stores, 627 Pizza Hut stores and 221 Costa Coffee stores. As you all know, we have signed up new brands and completed the acquisition of Skygate Hospitality recently. In view of this, please note that we’ve made an update to how we report our India operation matrices from this quarter.
We are presenting our data across three key operating segments which is Yum Brands consisting of KFC and Pizza Hut, other franchise brands such as Costa Coffee, New York Fries, Tea Live and Sanuk Kitchen and our own brands including Van Gogh and recently acquired Skygate Hospitality Portfolio. This will give better clarity and alignment with how we manage our business and how we look at our business internally as well. From the current quarter onwards we are consolidating Skygate Hospitality financials. The transaction was consummated on 10th of June, hence the results have been consolidated from June 11th and a 20 days impact is there in the consolidated numbers of DIL on to the financial matrices.
Consolidated operating revenue for quarter one FY26 including Thailand was rupees 1357 crores up 11.1% year on year basis. Consolidated Q1 FY26 gross profit came in at 925 crores which was up 9.5% y on y with margins at 68.2%. Brand contribution margin was at 13.1% versus 15.3 last year. This dip is mainly on account of decline in margins in the Indian operations. Consolidated operating EBITDA on a pre indas basis was rupees 110 crores with margins at 8.1% versus 8.9% in the previous quarter. Lower brand contribution margin led to decline. Reported EBITDA was rupees 205 crores with a margin at 15.1%.
The Indian operations grew 11% y on y to reach rupees to reach rupees 932 crores in revenues. Gross margin came in at 69.6%, a decline of 2.3% versus previous year. This has been primarily on account of investments to support transaction growth in our brands. There was also a small impact for the increase in raw material prices of cheese, flour and edible oils. A change in GST applicability on rent has also led to an increase in rental cost. As a reminder, our industry does not get input credit on gst. Further high saliency of off premises sales across the two key brands which is KFC and Pizza Hut led to higher aggregator and delivery expenses.
These costs have increased on a structural basis across the industry and the impact will continue for the year. We also took initiatives to mitigate this increase by way of tight control on utility costs and other operational expenses. However, they could not fully offset the impact onto the brands. KFC in India added eight net new stores in Quarter 1 FY26. With this, the total store count for KFC in India stands at 704 stores as of 30th June and we are on track to open approximately 100 to 110 net new stores of KFC. Average daily sales at 98,000 for KFC is higher sequentially but lower on a ymy basis.
We have seen good progress with KFC SSSG after multiple quarters with SSSG stabilizing at minus 0.7%. Revenues came in at 613 crore rupees up 10.5% year on year. Gross margin was lower at 67.1% primarily due to investments in growing transactions and a small increase in the edible oil prices. The brand contribution margin came in at 15.5% for quarter one FY26 due to lower gross profit margin, higher delivery costs and aggregator costs and deleverage on lower. Ads. With the aim of improving the performance performance of the brand. We continue rationalizing our footprint at Pizza Hut due to closures of non performing stores. We ended quarter one FY26 with 618 Pizza Hut stores in India, a net decline of 12 from the previous quarter. In the current financial year we are planning to slow down our organic expansion of Pizza Hut stores openings. Pizza Hut India revenue for the quarter was rupees 187 crores up 3%. Y on yes. The ads recovered slightly to 33,000 on a sequential basis. SSC came in at minus 4.2% and efforts are underway to stem the decline.
Gross margin at 74.8% was lower due to inflation in flour and edible oil prices coupled with investments made to support the brand. The brand had a slight negative brand contribution in the current quarter. Franchise brands which include Costa Coffee and the newer brands in India had a stable quarter. We opened the maiden New York Fries stores at Mumbai International Airport. We are enthused by the performance and will continue to grow. New York Fries and other brands the division’s revenue came in at rupees 52 crores with a stable gross margins at 75.2% and brand contribution of rupees 6.7 crores.
Brand contribution for the division includes the startup cost associated with the new brands. OWN brands which includes Wango Biryani by Kilo and Goyala Butter Chicken Brands reached rupees 35 crores in revenues with steady gross margin at 70.1%. Please note that acquisition of Skygate Hospitality was effective from June 11. Hence only 20 days of financials of Skygate Hospitality are included. Brand contribution margin from own brands declined to 6.7%. Owing to this consolidation and dilution from Skygate portfolio of brands. We are working towards achieving positive brand contribution and turnaround of Skygate over the next 12 months. Our international business continues to grow steadily.
Revenues reached rupees 433 crores in quarter one FY26 with gross margins at 65.6%. Brand contribution improved to rupees 72 crores representing 16.7% margins on the back of better gross margin performance in the Thailand business. In conclusion, we are navigating a phase of soft consumer demand with a disciplined and measured approach. Our marketing strategy strikes a balance between broad based brand campaigns and targeted tactical interventions. Driving profitable and sustainable brand growth remains our unwavering North Star. On that note, I would like to request the moderator to open the forum for any questions or suggestions that you may have.
Thank you very much.
Questions and Answers:
operator
Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to withdraw yourself from the question queue, you may press Star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. First question is from the line of Aditya Soman from clsa. Please proceed.
Aditya Soman
Hi, good afternoon. So two questions from me. Firstly, on KFC we’ve seen sort of flattish like for like growth on a base that was already quite negative. So from here on to see an improvement in trajectory at kfc, what in your view are sort of the two or three key things that need to happen to sort of start seeing a meaningful improvement? And within this sort of flattish ssg, is there any meaningful trend difference that we saw maybe in the first half of the quarter versus the second half or in the more recent period in July? And my second question is on these. New brands that we are adding. Whether it’s sort of Biryani by Kilo or New York fries, over what period does the management intend to make these significant from an overall company perspective? Thank you.
Manish Dawar
Okay, let me. Thanks Aditya. Let me first talk about KFC Triple SG so while I agree with you that the KFC has been negative for a few quarters in fact to be precise almost eight to nine quarters. So there have been this whole quarter on quarter kind of impact which kind of comes in but despite that we’ve managed to kind of stem the the degrowth in KFC triple SC which was there and we are virtually flat this time. So this time there was also a season shift from a Savan perspective where the consumption is typically low because last year the period was little different, it was spilling over into second quarter little bit whereas in the current one so that we’ve seen a better impact.
So given that impact we would have been probably virtual flat or a small positive on on kfcsse. Having said that, we’ve seen a good growth momentum in the online category because we took initiatives on online specifically and therefore the SSSG online which is Omato and Swiggy is positive. We are trying to address the dine in piece which you’re hoping that we will be able to do that over the next one or two quarters and therefore with that you will see the numbers kind of improving because what we did online from a triple HC perspective is very heartening.
Coming to the new brands from coming to the new brands from Biryani or let’s say New York Fries and all. So right now as far as the new brands that we’ve signed up we want to test those brands, see how the consumer response is and then scale up. We’ve opened New York Fries, one store at Mumbai Airport. We’ll be shortly opening some of the Tea Life stores on Sanu Kitchen also we will start with couple of stores to see how the consumer response is. So therefore this will take some time to scale up and become overall meaningful contributor within the dial portfolio.
As far as Skygate portfolio is concerned which is Biryani by Kilo and Goela Butter Chicken it’s almost about 105 stores. So the objective there is to first set the model as you all know that it’s a loss making portfolio as of now. So our first priority is to turn around the brand. We are hoping in the next 12 months we will have a positive brand contribution in brand beta and post that start to ramp up the brand into our own channels and so on and so forth. Simultaneous to the overall turnaround we’ve also started experimenting the new formats or the new distribution channels for Biyani by Kilo which is airports and food courts again to test how the consumer responses from a dine in perspective.
We are also starting to work on some bit of recipe optimization from the kitchen preparation time and so on and so forth. So there’s a lot of groundwork which has already started to happen along with the turnaround priority. And once this is all achieved, that is where we will talk about a significant ramp up in the new portfolio. Hope that answers your questions.
Aditya Soman
Yeah, thanks so much Manish. Very clear. Maybe just on biryani by kilo just as a follow up. The current model is largely delivery only, is it?
Manish Dawar
See they do have some dine in stores but even from those dine in stores also predominantly it’s delivery. So if I were to look at the overall portfolio, 90% plus is delivery whether you talk about the dine in stores or the cloud stores. Perfect.
Anoop Poojari
Thank you so much Manish. All the best.
operator
Thank you. Next question is from the line of Gaurav Jogani from GM Financial. Please go ahead.
Gaurav Jogani
Thank you for taking my question. So my first question is with regards to the gross margin impact that we are seeing because of the, the promotional spends, how long do you know, expect these to sustain? And additionally, you know, given that they will also help to drive the transaction growth. So at an EBITDA level, when do you expect this to, you know, start contributing positively?
Manish Dawar
So Gaurav, we did multiple experiments on online to see how the consumer is reacting so that we are able to kind of and as you know, I mean online you are able to kind of measure such things much more closely and much more faster manner compared to the offline channel. And that’s the reason you see a significant impact in the gross margin as well as the brand contribution. So having kind of done that, done that for a couple of months, our plan is to continue with the same model for another one or two months, get our learnings and then start to optimize in terms of what is working, what is not working and therefore within the next quarter, when I say next quarter means not the current quarter that we are talking about, we will start to see the gross margins improving as well as the same flowing into the brand contribution margin.
Because right now we are in the process of testing multiple things to see what is and then, and then the, and then the objective is to basically fine tune after that.
Gaurav Jogani
Sure. That’s thankful. And I’m assuming that this will be across both the brands, KFC and Pizza both.
Manish Dawar
See the nature and the nature and the extent and therefore the impact is different. But as an initiative it is both brands.
Gaurav Jogani
Sure. And the next question is with regards to this drag from the, the Skygate hospitality brand on the the own brands franchise. If you can quantify how much that have contributed negatively towards the margin this quarter for the own brands.
Manish Dawar
Maybe I can quantify it on a one time basis but we will not be able to kind of do it on a repeated one because we are going to be presenting the divisional results as own brands because otherwise let’s say given the multiple brands we have will become very, very complicated for everyone. So just to kind of quantify the negative brand contribution for the first 20 days that we’ve consolidated is about 1.2 cr from the, from the portfolio. So therefore if you were to look at the own brand’s portfolio excluding the biryani by kilo portfolio, then the Bangun numbers are virtually flat.
Gaurav Jogani
Okay, and Manish, my last question is with regards to the, the impact that you called out for the GST bit on the rental and some, some impact of that increase in the aggregator expenses. If you can elaborate that a bit.
Manish Dawar
If you remember last year, October, there was the GST ruling change whereby earlier for example there was this whole exemption which was available for rentals lower than a threshold level which government kind of brought in as a, as a reverse charge mechanism. And therefore as far as the corporates are concerned they are supposed to pay GST on 100% of the rents wherein earlier given the lower income levels of the landlords you would save some bit of gst. So that impact has carried out and therefore we. So since in qsr, as you know the GST is not allowed to be set off, therefore in our case it kind of hits the bottom line.
So that’s the impact that I talked about.
Gaurav Jogani
Okay. And you said something about the aggregator bit as well, the aggregator cost also.
Manish Dawar
Increasing because if you see in the current quarter KFC online sales are higher than earlier quarters and with the online sales becoming higher because we ran these multiple things as an initiative on the online basis, obviously your aggregator cost also goes up because the aggregator proportion is going up in the overall sales.
Gaurav Jogani
Okay. Okay, sure. Thank you Manish for this. That’s all.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the question queue, please restrict your questions to two per participants. Should you have a follow up question, please rejoin the queue. Next question is from the line of Sujeet Jain from Valik. Please go ahead.
Sujit Jain
Yeah, thank you. This is Commissioner Jaipuri and these are not quarter related questions. You may note them down skew points. Our categories are urban centric, so that brings cyclicity. When urban is in a slowdown, we also slow down. We don’t have an answer to the entire industry Excel jubilant to 20 minute delivery which has worked for them. For us to even think about something like that, maybe we need to get our store economics right before we start thinking of adding an additional expenditure line. The third thing is that if I look at 9/4, 9-10/4, the SSIG has been negative to flat whereas the like to like for something like jubilant has been positive.
So there is at least one player that has done better in the industry. And the fourth thing is some of the categories that you’ve entered which are more, you know, there’s regional variation such as in a biryani and for example, when I’ve tested a Vango because of the batter that will change locally from place to place, there’s a limited standardization you can do. So how do you address that?
Manish Dawar
Thank you. Okay, let me address a few questions for you and then Mr. Jaipuriya would also come in and let me start from. So you talked about biryani in terms of regional piece. So you’re right, there are multiple types of biryanis available in the country. If I remember my number right, there are almost 300 types of biryanis which are available in this country. But if you were to sub segment the entire market and you were to analyze in terms of what works in the overall category, Hyderabad biryani is the biggest piece followed by Lucknowhi Biryani and followed by Calcutta.
So therefore if you were to look at almost 70% of the market would be top 4 to 5 types of biryanis. So within that if you look at BBK portfolio, we have Hyderabadi, Lucknowi and Calcutta which is already there and that is working well for us. Hyderabadi biryani works on an all India basis. Lucknowi biryani works virtually on an all India basis. Calcutta biryani is predominantly in East. So they’ve already kind of fine tuned the portfolio on the basis of three biryanis if need be, maybe if we need to add one or two more we can do that.
But otherwise we are largely covering what is important from an overall market perspective. Coming to your point on the brands being urban centric and therefore what is happening there? See, I mean if you look at the overall QSR market, I mean Jubilant is there in 400 plus cities. We are also at about in about 280 and 290 cities. Similarly, if you look at the penetration of the food aggregators, they are currently in in more than 800 cities. So therefore this whole thing is straddling much beyond what are historically understood as urban centers. And therefore we are also kind of there.
The opportunity lies in the Tier 2 segment because the awareness is there, the aspiration is there, but the income levels are a little bit of an issue. But otherwise we’ve started to present ourselves beyond the urban centricity, beyond the urban presence. That’s how we managed to cover almost about close to 280 to 290 cities. And again let’s say when you go there, it is not just about opening a store. You need to have the portfolio, you need to have the right product mix, right price points, what works in a smaller town from a promotion point of view.
So all of that also needs to be worked, which is what we’ve optimized a few things, we are working on a few things. So therefore we are geared up beyond the urban India. Obviously we are far, far away from rural as of now, but let’s say urban itself is still a very, very big opportunity. You talked your another question was about delivery, am I right?
Sujit Jain
Yeah, 20 minute delivery.
Manish Dawar
Yeah. So we’ve experimented, as I said, a few things in the delivery platform and that’s given us good results from a triple SC perspective both for KFC and Pizza Hut. But obviously you’re right that Jubilant is doing a far, far better job versus what we are doing because their model is kind of fits very well with the overall delivery portfolio because it’s a delivery first brand. Right. And we have kind of over a period of time moved from a dine in centric brand to a delivery brand and therefore we are also moving in that direction.
We are also internally strategizing in terms of how do we kind of capture that market quicker and maybe we’ll be able to come back to you in the next few quarters so that we are able to cater to the current consumer preferences and therefore with that we will see that our triple SGS also will start to fare better. At the same time on the online basis, we have to work on the dining basis, we have to work on our menu options and what we offer to the consumers on a unique basis versus what is there in delivery.
So that is again something that we are already working on.
Sujit Jain
How to improve the store economics so that you can accommodate more branding expenditure and including more expenditure on this delivery initiatives.
Manish Dawar
See, we need to continue to optimize the formats for the, for the dine in channel and as you know over the last few years we’ve reduced the Store format sizes. So KFC since everybody knows but let me for the sake of repeating it, KFC the format used to be 3000 square feet. We are down to about 1400 to kind of catch up with the delivery trends and the lower dine in. Similarly on Pizza Hut also we moved away from a dine in first brand to a delivery kind of focused format. So therefore this needs to be continuously optimized.
At the same time we also need to be cognizant of the fact that there is a category of consumers who prefer and they prefer a good dining experience. So which kind of has started to work in in on a very segmented basis. So therefore more than the format optimization we also need to combine formats along with the channels that will give us good results. And that also is a plan that we are currently working on.
Sujit Jain
And I wanted to hear. Mr.
operator
Sorry to interrupt. Mr. Jain, may we please request you to rejoin the council?
Sujit Jain
Yeah, this is, this is not a question I wanted to hear Mr. Jaipur how he wants to take this company at the poll position. Thank you.
Ravi Jaipuria
See I think it’s better Manish is on the ground level with this. So that’s why I’ve asked Manish to say it. I am not totally at the ground level so I didn’t want to answer your question and that’s why I’ve kept quiet. But. I will understand a bit more from him and then get back to you. I don’t want to give you answer which is I’m not fully prepared for.
operator
Thank you sir. Ladies and gentlemen, please restrict your questions to two participants. Should you have a follow up question, please rejoin the queue. Next question is from the line of Niharika Kamani from Cab Grow Capital. Please proceed.
Niharika Kamani
Hello. Yeah, hi. So a couple of questions. First question is more towards the QSR sector. So do you think QSR sector has kind of bottomed out or is it also facing threats from the likes of say Cloud Kitchen or consumers ordering more from the likes of Swiggy Zomato? Is this more of a structural change or is it related to QSR slowdown? And second is when do we see triple HG getting ramped up? Like is it a matter of couple of more quarters or will the turnaround take some more time?
Manish Dawar
Hi Niharika. Niharika C To your first question. In terms of what is happening with the QSR sector and where is it headed? In our view there is nothing wrong with the QSR sector if at all. We still believe that this is one of the highest opportunity industries which are available now, when you talk about, let’s say just the listed QSR space, obviously it is different, but I am talking about QSR as an industry. So which means that will include aggregators, that will include local competition, that will include all the new players who are coming in.
So all of that constitutes and they are predominantly playing in the QSR space. So there are multiple startups which have experimented traditional foods, they’ve converted that into QSR and therefore they are kind of jumping in. So therefore that is all about the QSR industry, but coming to the listed players. If you look at where the recent issues are, and I will combine your question along with the triple sg, we’ve expanded very, very aggressively over the last four to five years. If you look at, let’s say Divyani numbers, what they were around the time we listed to where we are now, we are multifold in terms of the top line.
Similarly, if you look at, let’s say the competition also everybody has grown now that densification has come at the cost of triple sg. But if the overall industry has to grow, we have to make sure that we are densified. Because if you look at, say, take us as a market in the us, QSR industry is bigger than the FMCG industry because of the food habits, because of the multiple choices available, because of the densification and so on and so forth. So therefore, in our view, there’s a significant opportunity in the QSR space, the densification is required.
Once the consumption starts to pick up, we will see the triple SG is also coming back. It is also a combination of how aggressively we are opening and adding new stores. And I’ve said in my comments that you will see a very limited Pizza Hut organic expansion. And therefore we are hopeful that with that little bit of slowdown, we should see positive SSS on kfc. If you look at the current quarter performance, we are virtually, we have neutralized the losses which were there for the last many quarters because we’ve played out some online strategies. So therefore we are working on these things and you will start to see a positive triple SGS over the next few quarters.
Niharika Kamani
Okay, got it. Just one follow up here. So what are your views on Cloud Kitchen? Will it be a threat or is it just complementary to list?
Manish Dawar
APPLAUSE See, it is complementary because today, for example, if you look at the consumer convenience, they prefer to consume food at home, given urbanization, traffic jams and so on and so forth. So we have to ensure that how do we become a very meaningful player as far as the cloud Kitchen or let’s say online food strategy is concerned because it’s important that we are able to satisfy the consumer demand. And as Sujeet mentioned, for example, Domino’s has kind of worked very beautifully on this whole 20 minutes delivery time and they are seeing good results. We are also working on a similar strategy because if, let’s say 50% of the industry is getting consumed at home, then obviously you need to make sure that you have a proper location strategy.
You have to have a cloud strategy so that you are able to serve the consumer demand through the aggregators. So all of those pieces are work in progress and we are already working on those.
Niharika Kamani
Understood. Thank you.
operator
Thank you. Next question is from the line of Jignanshu Gore from Bernstein. Please go ahead.
Saurabh Kundan
Hi. Thank you for the opportunity. Manish. Am I audible?
operator
Yeah, you are.
Saurabh Kundan
Okay. Manish was just one question. I think a lot of it has been discussed already on KFC and Pizza Hut. I hear the argument and the logic behind the marketing investments or the promotional investments to bring transaction growth. Would you be. So two parts to this question. A, for the current quarter in the YoY or sequential improvement in SSSG that we have seen, would you be able to share what kind of transaction growth have you seen in both these brands? And the extension is do you have a particular ads number in mind at which you will sort of start to taper these specific investments in growing transactions uptown.
Manish Dawar
Okay, so obviously we don’t disclose the transaction numbers, but We’ve seen almost 10% plus improvement on the transactions overall with the initiatives that we’ve taken. If you look at only the online strategy, which is where this, this whole initiative was focused on, we’ve seen a much higher transaction growth. So therefore this was one, as I said to test second is to kind of spur the consumer momentum a little bit. And within this now we will select in terms of what to do and how aggressively to do that. On the ads side, our normalized KFC target is about 100,000 of ads on a consistent basis for the full year.
And that is what we want to kind of aim at on an immediate basis. And once that is there, obviously we will start to rationalize. So they both kind of work together from that point of view.
Saurabh Kundan
Okay, great. Just a clarification. These promotions or campaigns were done across all stores, cities, or was it selected clusters for KFC and Pizza Hut?
Manish Dawar
Jaganshu, There was a differentiated strategy for online and offline. Where we’ve seen a huge momentum is the online strategy. So obviously the stores. So those promotions and schemes Were not run at the. At the Dine in stores. Dine in had different sets of promotions. So that’s how it has been understood.
Gaurav Jogani
But obviously as you know, the entire. Servicing is from the stores only.
Manish Dawar
Correct. But it was across geographies. It wasn’t like focused only on metros or on tier two and so on. No, across geographies. You’re right.
Saurabh Kundan
Okay, great. Thank you. Thank you.
operator
Thank you. Next question is from the line of Saurabh Kundan from Goldman Sachs. Please go ahead.
Saurabh Kundan
Thank you very much for the opportunity. My question is also regarding these promotions. Just wanted to understand, understand them a little better. Manish, what is the nature of these spends that you’re doing especially on online? Is it something paid to aggregators for better visibility or are these some menu level strategic pricing or combos that you’ve done based on insights that are leading to better revenue growth?
Manish Dawar
Sort of. If you look at, there are multiple ways to kind of handle the entire online piece. One is this whole banner advertising and so on and so forth which in any case we’ve been doing in the past and we’ve continued with that because that comes out of the overall advertising revenue. And when we talk about online, it predominantly goes into the aggregators apart from the other targeted digital media in terms of the large spend that has been mainly consumer focused in the shape of participating in some flash sales. It could be a new combo, it could be a little bit of different structure and therefore a higher discount and so on and so forth.
So there have been multiple combinations which we’ve tried.
Saurabh Kundan
Right, right. So some of those pens are for visibility. And.
Manish Dawar
So visibility has been more or less in line with whatever we’ve done in the past.
Saurabh Kundan
Okay.
Manish Dawar
It has been targeted at consumers directly.
Saurabh Kundan
Okay. All right. The second and last question is at this point do you have any color on? Because you said multiple types of initiatives are going in any color on what type of initiatives are working and which ones will you pull back? Which ones will you continue? That’s it.
Manish Dawar
See, obviously I will not be able to share each promotion detail on a call like this. But obviously we’ve seen what the result has been. So. Because as I said, I mean I cannot give you entire rundown of all the promotions under subs.
Percy Panthaki
I just meant that is it, is it something like value that’s working or is it, I don’t know, some, some combos, any pattern to the initiatives that are working?
Manish Dawar
See, the value always works for the Indian consumer. Right.
Percy Panthaki
All right, thank you.
Manish Dawar
That’s normal. You pick up any category Any industry you give value to the consumer there’ll be cues. So. So therefore.
Percy Panthaki
Right. Right. Thank you. Okay, thanks.
operator
Thank you. Next question is from the line of Percy Pantaki from IIFL Securities. Please proceed.
Percy Panthaki
Hi Manish. I was just looking at the dine in numbers for kfc. So you’re given the total sales and you’re given the dine in percentage so you can calculate that. And I see that the dine in sales in rupee crore terms has declined 14%. Y o I this is in spite of whatever store additions we have. So on a per store basis it’s probably declined in the high teens. So just wanted to understand this. Like while we are seeing a growth in the online format is it just a customer shifting the channel from online to offline and if so it’s really not very good.
Right. Because we have had negative SSG for last 2, 3 years which means that the capacity utilization in the store is anyways low. And if we get higher capacity utilization in store the flow through from gross margin to EBITDA is going to be huge. So we should focus on that rather than diverting the customer away from the dine in towards the delivery by launching these schemes and all that.
Manish Dawar
So Percy, what you’re saying is right because if you see quarter one of FY25 the ADS was 104,000 and now it is 98 with a much higher share of delivery. So therefore, I mean what you’re saying is right because as I said we’ve taken some specific initiatives for online and obviously when we focused more on online there are some consumers who got shifted because they were able to get the value proposition sitting at home because we wanted to. If you see the last few quarters we’ve been kind of protecting our margins, not participating whereas the competing businesses have been doing that and the margins were eroding.
So therefore we also wanted to kind of test. So we’ve seen better transaction growth, we’ve seen better triple SG’s and so on and so forth. As Mr. Jeffrey also said in his address and I also mentioned that we need to have a very very differentiated strategy now for online and for dine in which is what we are working on so that we are able to differentiate the consumers. But with our learnings obviously we will now be balancing out in terms of what is happening in the online and dine in to ensure that the consumers are not getting shifted.
Percy Panthaki
So this Epic Savers 9 piece for 299 which is for dine in was that run only towards the end of the quarter or was it running for the entire quarter?
Manish Dawar
It was somewhere in the middle of the quarter and it was only a dine in. This offer was not available on online basis.
Percy Panthaki
Yeah, which is why I am, which is why my question that if it is available only for dine in and despite that the dine in salience has fallen and the absolute sales per store has fallen. So does it mean that this offer is not really having the kind of impact that we hoped for or is it that just it was for a very small part of the quarter and therefore the impact is not visible?
Manish Dawar
See on this one, for example, let’s say whenever we experiment with new offers we set some kind of targets for ourselves that this should be the menu mix and therefore from that perspective Epic has kind of exceeded that menu mix. But at the same time the offers which were available on online were much more compelling than this value proposition from a consumer point of view. And therefore we’ve seen the online momentum much more than the offline. So that’s the reason I said that once we now try and balance out things, you will see a better one coming in.
Percy Panthaki
Understood? Understood. So for bringing the dine in growth back, do you think the Epic saver just continuing the Epic saver is going to be enough or some more intervention will be required?
Manish Dawar
So this will obviously continue. Obviously we are also planning on some more promotions which are only diamond focus. We are also looking at some more value offers there. So therefore that’s the overall strategy that I talked about.
Percy Panthaki
Understood. Just one more question from me again possibly on KFC only. So we have seen almost two to three years of bad top line and demand scenario. Now generally there is one thought that or one school of thought which says that when we are having this kind of a backdrop then the recovery can be equally sort of steep. So it can rather than just go into a low single or mid single digit, we can have a year, year and a half of double digit kind of SSSG just because we’ve had a poor performance in the past.
So do you think that the averaging just works out on its own or. I mean there is something very specific which would be needed for the double digit growth to happen or just a normal consumer recovery will help that double digit SSG happen.
Manish Dawar
See, we’ve seen these kind of consumer behaviors in multiple cycles in the past, right? Whenever it’s weak and then suddenly it kind of spikes up. We’ve seen that in the other industries also. Now overall it’s a playoff whether the consumption is strong or not. So if the consumption is kind of strong, obviously it comes back even more strongly. And given this phenomenon also probably is bottoming out, it could be some good times. Let’s hope so. We can discuss this more on an offline basis, but we are also equally hopeful as you are.
Percy Panthaki
Sure, sure. Thanks a lot, Manish. That’s all from me all the way. Thanks so much.
operator
Thank you. Ladies and gentlemen, we will take this as the last question for the day. I would now like to hand the conference over to the management for the closing comments.
Manish Dawar
Thank you very much. We hope we have been able to answer all your questions satisfactorily. Should you need any further clarifications or would like to know more about our company, please feel free to contact our investor relations team. Thank you once again for your interest and support and for taking the time out to join us on this call. Thank you very much.
operator
Thank you, sir. Ladies and gentlemen, that concludes this conference. Thank you all for joining us. And you may now disconnect your lines.