Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Devyani International Ltd (NSE: DEVYANI) Q4 2026 Earnings Call dated May. 15, 2026
Corporate Participants:
Ravi Jaipuria — Non-Executive Chairman
Manish Dawar — Whole-time Director and Chief Financial Officer
Analysts:
Anoop Poojari — Analyst
Devanshu Bansal — Analyst
Presentation:
Operator
Ladies and gentlemen, Kathyan. Welcome to the Devgani International’s earnings conference call. As a reminder, all participant lines will be in the listen only mode and anyone who wishes to ask a question may enter star n1 on the touchtone phone to remove yourself from the queue. Please enter Star and two, 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.
Anupajari from CDR India. Thank you. And over to you sir.
Anoop Poojari — Analyst
Thank you. Good afternoon everyone and thank you for joining us for Devyani International’s Q4 and FY26 earnings conference call. We have with us Mr. Ravi Jaipuria, non executive chairman of the company, Mr. Raj Gandhi, non executive director, Mr. Anish Savar, president and CEO and Mr. Anukam Kumar, CEO of the company. We initiate the call with opening remarks from the General followed by key business and financial highlights from the CEO. 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 to this effect has been included in the results presentation shared with you earlier. I would now request Mr. Abhijai Puriya to make his opening remarks.
Ravi Jaipuria — Non-Executive Chairman
Good afternoon everyone and thank you for joining us today. It’s my pleasure to welcome you all to Devyani International. Post results Earning conference call to discuss our performance for the fourth quarter and full year.
Anoop Poojari — Analyst
25:26 this year has been a defining one for Divyani International. A year in which
Ravi Jaipuria — Non-Executive Chairman
We navigated a challenging operational environment while taking transformational steps that position the company strongly for the future. Our proposed merger with Sapphire Foods is a strategic combination of two scaled up and complementary platforms united by a shared vision for long term growth. Upon completion, the merged entity will emerge as one of the largest QSR platforms globally and as one of the largest partners for yum. With a diversified portfolio of leading brands, expanded geography reach and enhanced operational capabilities, the merger is expected to unlock meaningful synergies, strengthen execution and create a more agile and efficient organization capable of accelerating growth across markets.
I’m pleased to share that the process is progressing as per plan and we remain on track to complete the merger by the end of the current fiscal year. We have also taken steps to transform our management team under the leadership of Manish, our new CEO. I’m happy with the progress made and feel very confident that we’ll be able to largely have the new team in place by next quarter. Our focus is to bring in experienced and forward looking professionals with deep operational and strategic expertise as we prepare for the next phase of growth and integration.
These capabilities will be critical in driving transformation across the organization. Technology, automation and data led decision making will remain central and critical to this journey. This will also play a key role in enhancing efficiency, scalability and customer experience. The new management team is being formed keeping in with our aspiration for DIL to become one of the largest and most admired global QSR companies. Demand sentiment during the quarter remained broadly stable helped by favorable policy stimulus and GST rate rationalization.
Volume leading growth in adjacent consumption categories like FMCG further points to stable to improving demand trends thanks to a stable demand environment and tailored and sustained customer engagement. KSP delivered its strongest performance in the last 14 quarters posting 4.9% positive SSFG and nearly 15% year on year growth during the quarter. It continues to anchor our growth momentum and network expansion. Our own and franchise brands also maintained positive SSSG trends. Overall, our footprint growth was calibrated and we ended the year with a global network of 2,256 stores.
Throughout the year we remained disciplined in our execution with a clear focus on protecting unit economics, driving operational excellence and maintaining financial prudence. At the same time, our marketing efforts remain sharply focused on enhancing value perception and improving accessibility for consumers across key brands. Encouragingly, we continue to witness improvement in the consumption trends as far as our brands are concerned. Our value led initiatives and accessibility focused campaigns at KFC are resonating well with our customers resulting in improved average daily sales trends and sequential recovery in SSSG performance.
While external and seasonal factors remain fluid, we are optimistic about demand conditions and believe the business is well positioned for stronger performance during the year. Our strategic priorities remain unchanged, disciplined expansion, stronger profitability and deeper consumer relevance through innovation and digital engagement. Our view on India opportunity remains unchanged and the proposed
Anoop Poojari — Analyst
Merger
Ravi Jaipuria — Non-Executive Chairman
Further enhances our ability
Anoop Poojari — Analyst
To execute these priorities
Ravi Jaipuria — Non-Executive Chairman
On scale and reinforces our confidence in the long term opportunity ahead. This has been a year of resilience, execution and strategic progress. With the merger progressing well, leadership capabilities strengthening and demand trends showing signs of recovery. We believe we are entering into our next phase of growth from a position of strength. With this I would like to conclude my address and now hand over to Manish for the business update. Thank you,
Manish Dawar — Whole-time Director and Chief Financial Officer
Thank you Mr. Jaipur. Good evening everyone. A very warm welcome and thank you for your valuable time for attending our Q4FY26 earnings conference call. Our performance in Q4 provides a good foundation as we plan and build Dil2, a journey of transformation led by the new leadership team and enabled by digital technology, automation and AI. DIL has always been a brand and employee centric organization and our vision is to leverage these assets to form a common and scaled up one DL view and to create a frictionless organization in the interactions of employees, brands and technology.
The combination of deep institutional knowledge within the organization and the fresh perspective being brought by the new leadership team is helping shape a clear and ambitious roadmap for the future, one aimed at strengthening DIL’s position amongst leading food services players globally. While we’ll share more details on Dil2 strategy and transformation roadmap over the course of the year, let me briefly outline its core pillar pillars. It’s all about reimagining how we work, expanding the reach of our brands, making the organization more efficient and focus on digital transformation.
We also see significant opportunities in driving greater collaboration across brands, enabling the sharing of capabilities, common infrastructure, strategic thinking at middle management level, consumer insights and best practices across the portfolio. Together these initiatives will help us build a leaner, more agile and significantly more productive growth oriented organization with technology and digital capabilities. Customer recruitment and increasing in store traffic will remain one of the core strategic priorities, serving as important growth enabler.
We have now achieved more than 80% digital kiosk penetration across our KFC store network, enhancing customer experience, convenience and engagement across physical formats. In parallel, we are making strong progress on DL Commerce, our unified technology platform designed to strengthen operational execution, deepen customer engagement and create a scalable digital backbone for future growth onto the business Updates we ended FY26 on a good note. KFC delivered a positive triple Hg of 4.9% for the quarter, the strongest performance in the last 14 quarters, reaffirming both the resilience of the brand and the long term opportunity in the market.
This momentum Translated into nearly 15% year on year growth for KFC with Q4 revenues of INR 586 crores, brand contribution grew nearly 20% y and y to reach INR 99 crores with brand contribution margins improving to 17% for the quarter. We ended the year with 783 KFC stores across India. KFC continues to execute effectively on the dual priorities of innovation and delivering disruptive value along with higher footfalls in the stores. At Pizza Hut, our focus remains on portfolio consolidation and operational discipline.
While SSSG was at minus 3.7%, the performance improved on a sequential basis with ADS remaining stable at approximately INR 30,000 per store per day. Brand contribution for the quarter was slightly negative primarily due to operating leverage arising from lower same store sales. We ended the year with 639 stores with no net additions during the quarter. Our own brand’s portfolio comprising of Vango and Biryani by Kilo continue to deliver healthy performance with both brands reporting mid single digit positive triple sgs with Biryani by Kilo now achieving positive brand contribution.
We have initiated measured expansion in the offline channels by way of test launch and smaller express formats. Within our franchise brands portfolio which includes Costa Coffee. Revenue growth remained steady at nearly 3% year on year. Elevated coffee and cocoa prices however impacted input costs and led to a 1.2% year on year decline in gross margins. The portfolio delivered a healthy brand contribution margin of 16.1%. As you all know there was a very significant gas crisis in the country because of the Middle east war.
I feel very happy to report that our teams manage the same very closely and effectively and we could come out of it with minimal impact on the business. The gas crisis continues to be on, it continues to be an issue in some parts of the country and we are still not fully out of it, but we are able to manage the same very very closely. Our international business continues to deliver strong and consistent growth. Nepal, while still is a relatively small contributor, recorded an impressive 46% year on year increase in sales while Thailand grew revenues by 19%.
As a result, the international business grew 20% year on year and crossed INR 500 crores in quarterly revenues for the first time. Improved gross margins and operating leverage drove brand contribution margins to 17.7% with brand contribution reaching INR89 crores. On a consolidated basis we delivered 18.5% year on year growth in revenues for the quarter reaching INR 1437 crores. For the full year we crossed INR 5500 crores revenue milestone reaching INR 5611 crores, both gross margin at 68.8% and brand contribution at 14.1% but better on a Y on Y basis.
Operating EBITDA came in at INR 123 crores representing 8.6% of sales and grew 13.8% y and y over the past year. Our priority has been to consolidate the portfolio and strengthen the foundation for the next phase of growth. We ended FY26 with a system store count of 2,256 stores representing a net addition of 217 stores over the last 12 months. We expect to add approximately 200 to 225 net new stores in FY27 as DIL. KFC is expected to contribute 100 to 110 stores of these additions, with the balance being driven by Costa Coffee, Biryani, by Pillow and international businesses.
Having tested Tealive in India and Thailand, we’ve decided to discontinue the brand and the same will happen in the next quarter. Before I conclude, I would also like to briefly update you on the proposed merger with Sapphire Foods. The process remains on track. We have completed filings with the stock exchanges and we are expecting to receive the necessary approval shortly following which we will proceed with the CCI application. We continue to expect completion of the merger by end of the current financial year.
With this, I would 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 very much. 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 remove yourself from the question queue, you may press Star and two participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Devanshu Bansal from MK Global. Please go ahead.
Anoop Poojari
Yes. Hi, good afternoon to everyone and congratulations on a strong, strong pickup in ksc. Manish, we’ve made multiple leadership announcements in the recent time. Maybe if you could highlight how these leadership changes across some of the key roles can help us in growth augmentation in the subsequent quarters would be helpful.
Manish Dawar
Thanks, Ivanshu. So when we drew the blueprint in terms of where we want to go as a company, we kind of analyzed and saw what were the skill sets that were missing. So that was one piece and the other piece was this whole impending merger with Sapphire Foods. Because if you put the two companies together, we are going to be almost a one billion dollar top line by the time we complete the merger. And hence the exercise was to kind of evaluate what are the skill gaps, where is that we need to go and how is that we need to go there as part of the entire exercise.
What we thought that we lacked was one strong technology leader. And we’ve hired a gentleman by the name of Neeraj Tiwari, who’s going to be the CTO for the company going forward. We’ve already made this announcement. As you know, we also identified that with our own brands coming in and with some of the other franchise brands where we take the lead on marketing and at the same time as we’ve announced in the past that Pizza Hut marketing will come to us as part of the merger, we wanted to enhance our marketing overall portfolio and hence we’ve hired a gentleman by the name of Sandeep Anand.
So Sandeep has joined us as Chief Marketing Officer and he will be also looking after the Pizza Hut operations. Sandeep’s background is a combination of QSR and technology and therefore all of the relevant experience will help us as we move forward in our journey. We’ve also made a couple of other announcements like Robinder, who’s going to be leading our portfolio on the Costa side and some of the smaller brands that we have like New York Flies and and Sanuk Kitchen. We’ve also made an announcement for the COO today.
I don’t know whether you’ve seen that or not. So therefore this gentleman also will be joining us in the next couple of weeks. Comes with a very strong background from FMCG and technology with the companies like Unilever and Amazon. So with that we are becoming a future forward organization and we want to transform ourselves not only from people practices point of view, we want to bring in much more automation and technology led operations transformation and technology driven operations so that we are able to ride the next wave.
So that has been the broad hypothesis in terms of the people changes that we are looking at.
Anoop Poojari
So majorly, if we have to summarize this one is from marketing perspective, right? And the other one is based from maybe the own delivery capabilities as well as from a customer equation perspective. And thirdly from a CEO perspective, obviously that will be an unbound sort of. So is that right way to look at it, Manish?
Manish Dawar
Yeah, absolutely. Because if you remember, we announced in the last call that we’ve kind of tied up with one of the leading IT companies as our technology partner and therefore we will be developing our own apps, we’ll be developing our entire technology stack and therefore we wanted to build that capability also in house because we’ll have to manage the technology as we go along inside the company.
Anoop Poojari
Now secondly Manish, the broader commentary that you have come across qsi players post Q4, the dining footfalls have definitely improved after a fairly long period of time. So wanted to check if you could share your thought process on the sustainability of this trend. Right. So what all initiatives, company specific we have taken and what is the confidence on sustainability at these times?
Manish Dawar
See Devanshu, as I mentioned in the past, we need to give a reason to the consumer to come into the store Right. And because for example, if you’re able to give the same offering to a consumer inside the home with zero incentives to come to the store, nobody will walk into the store. And therefore that meant that you have to kind of reimagine the business from the point of view of what is your pricing in the two channels. In the two channels, what is the innovation, and so on and so forth. So we’ve done some experiments to treat the two channels as two different businesses, which is what again I have alluded in the past and therefore that is showing some results.
It is just the start of the journey. We have to cover a lot of gaps from there, but we are encouraged with what we have done and the response that we’ve seen from the consumers. So therefore it kind of again reiterates our belief that if you give a reason to the consumer to come into the store, they will come into the store. And that’s how we are kind of now approaching the entire business.
Anoop Poojari
So this trend at least we can assume, right? So obviously geopolitical tensions, etc. Sort of some uncertainties remain, but so far so good. Right.
Manish Dawar
See macro levels, Devanshu, none of us can control. Right. And we’ve seen number of macro issues over the last three, four years. So it started from COVID and since the time of COVID there has been some event or the other which is regularly kind of coming along. So I think the way we look at it, I mean we have to accept this as a reality and therefore we continue to chug along in terms of whatever we need to do, whatever is under our control. Do that to the best of your capability and carry the business along.
Because remember that any of the geopolitical situations they put more pressure on the small scale players which kind of helps us consolidate further on whatever we are doing.
Anoop Poojari
Great, thank you. Manish. I have just two couple of bookkeeping questions but I will come back in the chat. Sure. Thanks a lot.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, we would request you to please restrict your question to one per participant. If you have a follow up question, you may rejoin the queue. The next question is from the line of Gaurav Jogani from JM Financial. Please go ahead.
Anoop Poojari
Thank you. Since I can ask only one question, my question with regards to the store opening, basically the store opening this quarter around, we have noted that across the format we have stored problems. So just want to understand. I’m sorry to interrupt
Operator
You Mr. Jogani, but you Are not clearly audible. Sir,
Anoop Poojari
Is this better?
Operator
Yes, but it is sounding a little muffled.
Anoop Poojari
Is this better now?
Operator
Yes, please go ahead.
Anoop Poojari
Yeah, so my question is with regards to these store openings, basically we have seen that, you know, there has been stored clauses across formats. So is this a deliberate strategy wherein as a part of this exercise of the authorization we are kind of chugging out the loss making or the non profitable stores and then start on a cleaner straight for the next year. And if so, is there any change in the guidance for the store expansion?
Manish Dawar
So Gaurav, on the guidance, first, as I said in my address that we are planning to open about 200 to 225 new stores during the year of which KFC will account for about 100 to 110, 120 kind of store levels at the same time. We’ve communicated in the past that for 26, I’m talking about calendar year 26 here, we are not planning to add any net new stores for Pizza Hut. The idea is to consolidate and realign the portfolio for Pizza Hut. So therefore the remainder edition up to 200, 225 will come from Costa Vango Biryani by kilo and so on and so forth.
Having said that, I know that you’ve seen negative numbers in quarter four which is primarily because we are resetting our strategy from a BD perspective in terms of better quality stores and therefore a better pipeline. That’s the reason first quarter was a negative store. And the focus as you said is to kind of shut the loss making stores which are there in the portfolio and open better quality stores. While let’s say our new strategy is kind of build the pipeline as per our new guidelines and what we’ve discussed internally.
That’s the reason the store count is looking negative. But again as I said for the entire year you will be able to see 110 to 120 new KFC stores and with the overall store count of about 200 to 225 stores.
Anoop Poojari
Thanks for this follow up. You know also you know you’ve been highlighting that you’ll be doing a lot more tech driven initiatives. So would that in any case, you know, you would be tinkering with at least the store size or the any changes in the capex per store. Any changes that you see here on this front?
Manish Dawar
Not so much Gaurav. As I said around the call that we where we announced the merger that we believe we will be able to manage all the tech changes within the existing budgets that we have and whatever charges we pay to the YAM and so on and so forth. So therefore that is how we’ve tailored ourselves in terms of the new investments also. And plus, given the current optionalities on AI and all of that, we will be able to use our current infrastructure better with the help of some overlaying AI technology.
And that is what we are focusing on.
Anoop Poojari
Just one last question from Ayan Manish is regarding the KFC revival that you have seen. So you know, we have also seen the macroeconomic situation also kind of improving. Plus we have also taken initiatives in terms of the interventions we have done so for the SSD that you have reported, how much you would accord to the oral macro changes and how much would be our own initiative and how sustainable this is going ahead.
Manish Dawar
See, it is difficult to quantify factor by factor as I’ve said in the past. But again, we feel confident that we’ll be able to sustain the initiatives that you’ve seen, if at all. I mean, if you look at, let’s say in the quarter almost 45 days have gone by, we have seen that we are able to maintain the current SSS trends in line with the previous quarter. So therefore that is encouraging. We are monitoring it. Obviously it will take another couple of quarters by the time we are firmly able to say that the worst is behind us.
And we are not too sure about the macroeconomic situation as well. But as for the current actual numbers, we think we will be able to maintain the trends that you’ve seen.
Anoop Poojari
Sure. Thank you. Thank you very
Operator
Much. Thank you. The next question is from the line of Varsity Pantaki from ISL Securities. Please go ahead.
Anoop Poojari
Hi Manish, just wanted to understand the gross margin expansion on kfc. It’s a pretty big number. What has really driven that?
Manish Dawar
See, but see there are many things that would go into the gross margin line. So one is whatever raw materials and packing materials that we buy at the same time, how we handle the promotions and discounting structures and the multiple deals that we offer. What are the timings of the deals? So it’s a combination of all of that. The raw material and packing material environment has been pretty stable. So therefore that has not been an issue. And at the same time we tweaked the deals in favor of the dining customers more where we were lacking initially.
And that has helped us to kind of improve the gross margins a little bit and drive the customers in the stores to deliver the triple sg.
Anoop Poojari
Sorry for the in store part of the business. You have reduced your promotions. Is that what you are seeing?
Manish Dawar
No, I have reduced the promotions on online.
Anoop Poojari
Understood, understood. Also just wanted to understand, I mean, in light of the fact that promotions have been actually reduced, what is really driving this sssg? I mean, we have seen it across both Sapphire and yourself. So is it just that, I mean, beyond the point, after two, three years of sort of negative ssg, the sort of only the loyal customers are left and they are now sort of seeing a normal growth and whoever had to leave has left. Or is there any. Can you, can you just tell me if there are any two, three very specific actions which you have taken which in your opinion have driven the SSG for kfc?
Manish Dawar
So firstly, as I mentioned to Devanshu, that end of the day, you need to give a reason to the consumers to come into the stores. And that is what we’ve increased the intensity, which is where we were not kind of as active. Our entire focus used to be on online and we shifted the focus now more to dine in and more to the dine in customers. And therefore we are tailoring the offers and the price points and the promotions to make sure that the dine in customers are attracted and that is what has predominantly helped us.
Anoop Poojari
But at the same time, the reduction in the offline promotions, haven’t that had a negative effect on that part of the business?
Manish Dawar
No, I’m not saying that we’ve reduced the offline. I said we’ve reduced the online promotions.
Anoop Poojari
Yeah, online. I’m saying the online promotion reduction, which is
Manish Dawar
Much more than the online losses.
Anoop Poojari
I see, I see. Understood. Also, have you taken any menu price increases in KFC either in the past quarter or recently?
Manish Dawar
It was a very small correction. So on a portfolio basis I would say it was maybe less than half a percentage point. It was only to kind of tweak some bits of mismatches which were here and there. That’s a continuous process.
Anoop Poojari
And given the inflationary sort of macro scenario that we are seeing, do you foresee any price increases in the near future?
Manish Dawar
If you can help me foresee the inflation in the near future, I’ll be able to tell you that.
Anoop Poojari
Got it, Got it. Okay, that’s all for me. Thank you.
Manish Dawar
Yeah, thank you so much.
Operator
Thank you. The next question is from the line of from Boston. Please go ahead.
Anoop Poojari
Hi Nish, congratulations on, on sort of revival in kfc. I wanted to double click on KFC and had a very quick question on. I’ll post both questions together so you can, you can answer them on kfc. Would you help us understand this SSD that we’ve seen? What Part of it is higher AOV or higher average value orders and higher incremental transactions. I think this is a bigger share. And what gives you the confidence of sort of sustaining that irrespective of what happens in macro? I think on Pizza Hut the last time you mentioned that, we will have a more detailed answer to what’s your approach going to be right to revise the brand.
So when should we expect to see that? Thanks.
Manish Dawar
Sure. Thanks, Shikanshu. So let me answer your question on the KFC first. So in terms of again, I think it’s basically going down to the online and offline. So if you see our past trend, when we were losing triple SGs, we were losing more on dine in versus the online channels, if at all. While let’s say that triple SG was negative in the same quarter, we had seen that the online channel was positive and the offline channel was negative and that negativity was kind of overlapping the positivity on the online channel.
And that is what we’ve tried to reverse in the last quarter by focusing more on the offline channel. And so let’s say online triple HG has come down, but the offline has taken over more. And again, it’s basically as I said, I mean you need to give right reasons for the consumers to come into the stores because it cannot happen that. Let’s say, for example, if a consumer is ordering at home and at times they are able to get cheaper pricing sitting at home rather than coming into the store where the expense is higher and at the same time where the customer gets the convenience.
So that is what we started to monitor much more closely. And we’ve taken steps that for any customer the best deals will always be at the store level. And that is basically where you experience the brand at its best. Not only from a freshness point of view, but also from a customer experience point of view. And we’ve seen that the customers have responded very positively to that. And that is kind of helping us to your other sub question. In terms of the tickets versus the aov, it’s a combination of both.
We’ve seen the tickets also grow because what we’ve seen over a period of time that there were a lot of new consumers who were coming in, but there were a lot of lapses also which were happening. So the new consumers were coming in, the olds were lapsing out. So we’ve tried to address through multiple ways in terms of how do we get back the consumers who’ve lapsed out. And while we continue to recruit the new consumers. So therefore, that strategy we’ve seen has played out well in the current quarter.
We need to ensure that we are able to run with it for the next few quarters to be able to call out that our strategy is working. So the start has been good. Let’s see how it shapes up on the Pizza Hut. To your other question, as I said, we’ve hired a new gentleman by the name of Sandeep. He’s going to be focusing on Pizza Hut. He’s basically a marketeer all through his career with a strong FMCG background, QSR background and technology background. And so basically we are going back to basics as far as Pizza Hut is concerned in terms of identifying the gaps on the portfolio from a product point of view, identifying the pricing layers which are kind of missing in our portfolio, looking at the quality on a de novo basis as far as Pizza Hut pizzas are concerned.
And not only from just because as you know, in a pizza typically you have to look at the dough, cheese and toppings. So we are trying to revisit all of those things internally. We’ve seen some good work which is happening and I think it’ll take maybe a couple of months by the time we actually launch that in the market. We are seeing how the technology is working. We are actually starting to retrain all of our store staff both from a product quality perspective as well as the CX training. So it’s Pizza Hut is back to basics.
So maybe during the course of the year, as I said in my comments, that we will come back to you with the complete strategy in terms of how we are trying to approach various brands. Maybe we can fix an analyst day in the next couple of quarters and we can take you guys through in detail on what our plans are and what is that we are trying to do brand by brand once the entire new management team or the leadership team is in place.
Anoop Poojari
Okay, perfect. Thank you for the answer. All the rest,
Manish Dawar
Thank you.
Operator
Thank you. The next question is from the line of Naman from Sangri Family office. Please go ahead.
Anoop Poojari
Hi, just one quick clarification. So we mentioned about 225 new store editions. That is taking into account the merger scenario or is it on standalone basis At DI level?
Manish Dawar
It’s on a standalone basis. Standalone basis, but considering all of our brands. So therefore that would include kfc, Costa Bango, Biryani, Vaikilo, all the brands put together.
Anoop Poojari
Okay. And just second clarification. You know, in Mumbai I think you started with this new KFC store around the metrons. So do you think that that channel as a whole is giving us a very good visibility and showing?
Manish Dawar
See, Mumbai territory is with Sapphire, not with us. And therefore your specific question on Mumbai will have to be addressed by Safire. But in general I’ve mentioned I think probably a few quarters back that we see a big momentum on the travel side. And that’s the reason we were focusing on multiple brands. That was the reason we were focusing on opening food courts at the highways and the malls and the food courts and so on and so forth. So that is part of that overall strategy. So we are bullish on the travel segment.
But Mumbai question you need to check with Sophia.
Anoop Poojari
I’m so sorry. Thanks.
Manish Dawar
No issues. Thanks.
Operator
Thank you. Participants who wish us to ask a question, please press star and 1. Anyone who wishes to ask a question, you may press Star and one. Now the next question is from the line of Devanshi Bansal from MK Global. Please go ahead.
Anoop Poojari
Thanks for the follow up. Just a couple of bookkeeping questions. This bad cost, is this a small 1.52% of sales or is it a sizable part of your portfolio? If you could just specified it.
Manish Dawar
So I’ll not be able to give you the exact number they want you but it’s a small cost.
Anoop Poojari
Okay.
Manish Dawar
And
Anoop Poojari
Lastly Manish on the at the same time
Manish Dawar
For example they want you just to give you. Because in our portfolio as a result of gas gas crisis we started evaluating electrical equipments. For example in in Biryani by Kilo we’ve managed to switch our equipments to electrical. At the same time we are also exploring whereby the equipments can work on both gas as well as electricity. So there are multiple initiatives which we’ve taken so that in future we are able to mitigate the impact better.
Anoop Poojari
Sure. And secondly Sir, Biryani by Kilo we don’t get the individual brand wise profitability but this India portion excluding the KFC and Pizza Hut has done well from a profitability perspective. So anything if you could highlight from next year perspective how we should begin for this particular brand.
Manish Dawar
So Biryani. Biryani Vaikilu. As I said we’ve managed to turn the brand around. As you know it was a loss taking brand. There is a further potential because right now we’ve basically brought the negative to positive and we have to grow from a profitability perspective. At the same time we started experimenting with the brand on an offline basis. So we’ve opened a few express outlets in our food courts to see how the brand performs. It’s a profitable store wherever we’ve opened. So therefore we are very bullish on Biryani by Kilo and it can do wonders once we are able to stabilize the entire situation.
Anoop Poojari
Understood. One last from balance sheet perspective, Manish, there is some increase in debt as well as some increasing intangible assets as well. So anything to sort of look into it or how. How should we read these two numbers in FY20? So it’s
Manish Dawar
Predominantly Biryani by Kilo consolidation Devanshu. Because the consideration that we paid obviously will go and sit predominantly on the intangible side. So if you want details we can connect on an online offline. Yeah, and we’ll be able to. But it’s predominantly Biryani Vaikilo going and sitting in the Goodwill as well as the brands.
Anoop Poojari
Okay. And anything why the debt has increased, Manish for FY26.
Manish Dawar
So that was only a temporary because we were trying to. We raised some debt because there was some injection required in Thailand and because of the local Thailand regulatory issues. So that has got squared off in the first week or the second week of April already.
Anoop Poojari
Okay, Understood sir. Thanks.
Manish Dawar
Okay, thank you.
Operator
Thank you ladies and gentlemen. That was the last question for today. Now hand the conference over to management for closing comments.
Devanshu Bansal
Thank you very much. We hope we have been able to answer all your questions satisfactively. Should you need any further clarifications or would like to know more about the 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 once again.
Operator
Thank you ladies and gentlemen. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.