Devyani-Sapphire merger set to add spice to QSR competition

The newly announced merger of Sapphire Foods India Ltd (SFIL) with Devyani International Ltd (DIL) will make the latter one of the largest players in the quick-service restaurant (QSR) space.

- AKSHARA SRIVASTAVA New Delhi, 2 January

The move will create a unified Yum! India franchise for KFC and Pizza Hut, where SFIL was operating the restaurants in South, while DIL was running shop in North, East and West India. It will also intensify competition between DIL and Jubilant FoodWorks, which operates Domino's and fried chicken brand Popeyes.

"Post the merger the combined entity will be amongst India's largest QSR players; it will also be a multi-brand, multi-cuisine and multicountry QSR platform, and will potentially offer growth visibility, improved resilience across demand cycles and a structurally stronger business model," JM Financial said in a note on Friday.

Back-of-the-envelope calculations, which do not bake in the merger, show that the combined equity value could be around ₹387 billion, according to the report.