Devyani-Sapphire merger is a good fit, but not a demand fix

The proposed merger of Devyani International Ltd and Sapphire Foods Ltd appears strategically sound.

- Shubham Diwari [e-mail]

In a joint investor call on Tuesday, the two managements described it as one of the most complementary deals in India’s quick-service restaurant (QSR) sector.The bigger question is whether consolidation can address the more fundamental challenge of weak demand at existing stores. In the first half of FY26, Devyani’s KFC same-store sales declined 2.4%, while Pizza Hut fell 4.1%. Sapphire reported even steeper drops of 4.38% and 6.5%, respectively.