Devyani International Limited (DEVYANI.BO) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Devyani International Limited and Sapphire Foods joint merger Announcement Conference Call. [Operator Instructions] Please note that this conference is being recorded. I will now hand the conference over to Mr. Anoop Poojari from CDR India for opening remarks. Thank you, and over to you, Anoop.

Thank you. Good afternoon, everyone, and thank you for joining us on today's call to discuss the merger between Devyani International and Sapphire Foods that was announced on 1st January 2026. We have with us today Mr. Ravi Jaipuria, Non-Executive Chairman of Devyani International; Mr. Raj Gandhi, Non-Executive Director; Mr. Virag Joshi, CEO and Whole-Time Director; and Mr. Manish Dawar, CFO and Whole-Time Director of Devyani International. From Samara Capital, we have Mr. Sumeet Narang, Managing Director and Co-CIO; and Mr. Vikram Agarwal, Managing Director and CFO. From Sapphire Foods, we have Mr. Sanjay Purohit, Whole-Time Director and Group CEO; and Mr. Vijay Jain, Executive Director and CFO of the company. We will begin the call with opening remarks from Mr. Ravi Jaipuria, Non-Executive Chairman of Devyani International, following which we'll have the forum open for a question-and-answer session. Before we begin, I would like to highlight that certain statements made in today's call may be forward-looking in nature, and a disclaimer in this regard has been included in the merger announcement presentation shared with you earlier. Kindly also note that both companies are currently in the silent period, so please refrain from asking questions regarding the quarterly business performance. We request that the questions be limited to the proposed transaction. I would now like to hand over the call to Mr. Ravi Jaipuria.

Good afternoon, everyone, and I wish you all and your families a very happy 2026. I'm delighted to announce that last week, on the 1st of January 2026, the Board of Directors of DIL and SFIL in their respective meetings have approved the merger between Devyani International Limited and Sapphire Foods India Limited. It is a momentous occasion with significant long-term benefits for your company. The proposed merger is far more than combining 2 businesses, it is about creating one of the largest F&B platforms in India that is positioned to seize the vast opportunity in India's F&B company. The merged entity will have more than 3,000 stores globally and a turnover of approximately INR 8,000 crores on an annualized basis, a portfolio of marquee brands, including KFC, Pizza Hut, Costa Coffee, Vaango, Biryani By Kilo, et cetera, and a pan-India distribution reach covering multiple formats. India's food and beverage market is large, getting formalized and expanding rapidly with independent estimates placing the broader food services market at more than $100 billion and the QSR segment alone at more than USD 25 billion and growing -- by this time the merger gets consummated, the merged entity is likely to cross USD 1 billion in annual revenues. The merger marks a defining landmark in the evolution of the company. The merged entity will sit at the intersection of scale, brand strength and market access. We are creating a unified franchise partner for global brands that can deploy capital, talent and technology across a national footprint with unparalleled speed and consistency. The structural characteristics of the Indian market, rising disposable incomes, increasing urbanization, changing food preferences and accelerating retail and delivery infrastructure mean that national rollouts and standardized execution translate directly into durable competitive advantage. The QSR segment is amongst the fastest-growing segments within the broader F&B ecosystem. A single well-capitalized franchisee with national rights is much better positioned to capture this growth potential. In short, this merger creates a platform that is better placed competitively, deeper national penetration for marquee brands, stronger bargaining power with partners and landlords and the ability to allocate capital where returns are the highest. Our ambition is straightforward to build the preferred long-term home for global QSR brands in India and to convert India's structural demand tailwinds into sustained, disciplined growth for our shareholders, team members and partners. I would like to thank Yum! Brands, Samara Capital and the combined teams of DIL and SFIL, whose work has brought us to this point. We now begin our next journey to realize the full promise of this combined enterprise, one that has the potential to redefine the competitive map of India's food and beverage sector. Thank you.

Brian, we can open the lines for Q&A now.

[Operator Instructions] We take the first question from the line of Devanshu Bansal from Emkay Global.

Congratulations to all parties involved on this announced merger. Sir, Devyani has always been a great executor in terms of operations. But now the company also has to manage other verticals like technology, supply chain, marketing as well as introduce new product innovations as well. So how are you, as an organization, planning to ramp up capabilities in these verticals? So that was my first question.

So Devanshu. Thank you so much. So you're right. So traditionally, we've been operators, and we've been executors. As part of the deal, we are going to be taking over some functions for some brands, some functions for the other brand. And therefore, let me explain that to you better. For Pizza Hut, we will be taking over marketing and innovation, and we will be taking over technology and supply chain function as well. Whereas for KFC, as of now, it's going to be only technology and SCM. Marketing and innovation will continue to be run by Yum!, the way it was being run in the past. We do recognize that we have to build these capabilities because in the past, we never used to handle these functions. And hence, while, let's say, the merger discussions were on, we have started to build those capabilities. So therefore, internally, we've already had discussions in terms of how the organization structure should look like for these functions. We've already discussed in terms of how the leadership for these functions should look like. So all of that planning is in place. You will also be pleased to know that we've already gone and hired some positions already and some of them are in pipeline. So therefore, we are -- so rather than waiting for the merger approval, we've already started working on these areas, recognizing what we have and what we don't have, and therefore, this is well on its way. You will also be happy to know that we've also already shortlisted a technology partner who will help us and create the new technology assets in terms of web and app. So there are some internal formalities. There are some internal approvals that we need to obtain, but we've already shortlisted a large global technology vendor to partner us in this transformation journey as well as help us give a different customer experience already. So we will announce this in due course. So considering all of our preparedness, where we stand, as far as these functions are concerned, we will be ready by June, which is the middle of the year somewhere with our capabilities and capacities well before the merger gets approved. So therefore, we've already taken steps in that direction.

Great, Manish. Manish, you did indicate some senior leadership hiring. So are you sort of trying to indicate that from a CEO perspective, also, you'll be looking for fresh candidates here who can sort of manage the overall set of capabilities, the new capabilities that will be coming into picture for the merged entity?

So let me just clarify, Devanshu, what I said, and then Mr. Jaipuria will pitch on in terms of the leadership. As you know, that is beyond my scope. So what I said was that as far as the functions are concerned, which is in terms of marketing, the technology. So those are the functional leaders that we need to kind of fill the gap, and that's the process we've already started. A few of them, we've already closed the negotiations and the offers, a few are in the pipeline. So that's the point that I made.

So I think as far as the leaders are concerned, I think we are still about a year away from the merger, and there is a lot of work to be done on both sides. So I think we need to sit together and see who are the best in both the teams and then pick and choose between the 2 teams and find the best people to take it forward.

Very clear, sir. And obviously, the company has indicated a certain level of synergies, about INR 2.1 billion to INR 2.25 billion. So wanted to clarify, all these synergies are over and above the new investments that we will be making in the business, right? So -- or maybe to ask it in a different manner. So currently, the merged entity will be operating at 7% to 8% pre-Ind-AS margins in, say, FY '26. And the leader currently operates at about 13-odd percent. So I wanted to check how much of a bridge can we sort of narrow versus the leader and based on the net-net synergies that will be there in the business?

So Devanshu, the synergies that we've indicated are net of costs and will come and sit on top of where we are currently. So we are not going to be commenting on where the leader is and what our plan is. Obviously, we will come back to you in due course. But kind of -- let's kind of progress and we will come back.

[Operator Instructions] We take the next question from the line of Jignanshu Gor from Bernstein.

Congratulations to both the teams for successfully crossing this threshold. I had a couple of points I wanted to check. One is the overall transaction mentions a combination of share swap for most of the shareholders and a specific sort of paid-up capital, which will be bought by a group company. Is there any more color that can be shared on this in terms of the terms? Are they similar for share swap versus the onetime purchase of the group company? How will that transaction sort of work together? Is there some more color that can be shared here?

So Jignanshu, as far as Devyani is concerned, it will all be share swap because obviously, there is no cash out as far as Devyani as a legal entity is concerned. And therefore, that share swap we've already indicated in terms of 177 shares of Devyani in lieu of 100 shares of Sapphire, and that is predominantly because of the face value difference. So on the promoter to promoter deal, I would request Sumeet from Samara if you can throw some light.

Thank you, Manish. As was disclosed in DRHP, as per Yum! requirement, Sapphire Foods India Limited has a promoter entity in Mauritius, Sapphire Foods Mauritius Limited, which is supposed to maintain at least 25% stake. And without Yum!'s prior approval, that stake cannot be sold to anyone. So it's a restricted stock in that sense. Now as the merger that was being conceptualized in discussions with Yum!, the surviving combined entity needs to have one promoter, which is RJ Corp as a promoter and controlling shareholder of the merged business and hence the promoter entity of Sapphire Foods, which has 25% stake has bilaterally promoter to promoter at Mauritius level, decided that part of that 25% stake will be transacted bilaterally so that RJ Corp can maintain a significant shareholding in the combined entity in line with discussion with Yum!, and that number will be 18.5% out of the remaining 25%, and the remaining portion 20% will be share swapped in the combined entity. This 18.5% also will be closed bilaterally somewhere between 3 and 15 months between the 2 parties on a mutually agreeable basis, which allows RJ Corp to maintain a significant shareholding, which also satisfies a lot of Yum! criteria in terms of the threshold of shareholding of a promoter they want to maintain. And the combined entity will then have complete public shareholding other than the RJ Corp as a promoter.

Understood. Understood. So if I were to rephrase for my understanding [indiscernible] to be finalized, and it will be disclosed in due course when it is finalized. Is that the right approach? Is that the right conclusion?

Yes. I think so there'll be filings and -- what is being disclosed today, and that 18.5% will be sold bilaterally, somewhere to be closed between 3 and 15 months on a bilateral basis. And the remaining will be share swapped into the combined entity, which is DIL with RJ Corp as a promoter and Sapphire Foods Mauritius will cease to be a promoter, which has all been approved by Yum!. And the reason I think RJ Corp had to -- affiliated entity had to purchase so that the promoter shareholding in the combined entity of RJ Corp Group is strong enough from Yum!'s satisfaction perspective.

Makes sense. Okay. Okay. Just second quick question then, and this is specific to Pizza Hut, right? We've been -- there have been a lot of discussions over the last few quarterly calls on the approach for reviving Pizza Hut as a brand. And I have the pleasure of having both the management on the call between -- from Devyani and Sapphire. So is there a common understanding or view which we can share today? Or is it something that we are still working towards and we will revisit it later? So just interested to understand the future for Pizza Hut.

So Jignanshu, let me just explain you first what the regulatory landscape is. So both of us, as you know, are publicly listed companies. And we cannot engage with each other in terms of what the future strategies and what the future objectives are and how will that be fructified and so on and so forth, given the antitrust and the Competition Commission rules. And hence, we've not done that. Once we have the CCI approval, we will engage in deep conversations in terms of what the future and unified strategy for Pizza Hut will be. And therefore, at the right time, we will come back and we can talk about the Pizza Hut strategy going forward on the basis of merged entity. But Yum! also recognizes India to be one of the priority markets within the Yum! global portfolio. And the way we've negotiated the deal in terms of certain incentives and waivers and so on and so forth, and whatever is our thought process because obviously, we've not engaged with Sapphire on this one, I can tell you that in the first year, we will be able to kind of get to a positive brand contribution margin on Pizza Hut. If at all, our endeavor will be that we will be at a low double digit given what we have as part of the deal and negotiation with Yum! and as part of our revival strategy. So all of that is already kind of baked in into when I say that we'll be able to achieve low double digits. So let me give you some color broadly from whatever we've kind of negotiated with Yum!, which will kind of give you the confidence in terms of why we are saying so. So one, if you look at both the companies over the last 3 years, we expanded Pizza Hut franchise quite rapidly. And that led to negative SSSG, that led to kind of eating away into the margin structures and so on and so forth. We've already negotiated with Yum! that our priority is to turn around the business. Our priority is to put back Pizza Hut back to its old glorious day where it used to be the market leader. And hence, we will not be under stress to open net new units from where we are today. What we've negotiated is a very small number that can be easily achieved. We will have the full flexibility to shut the stores and turn around the stores and put new stores in place. Very clearly, what we've agreed with Yum! that the net new units, which is the net count as we close the merger will not be negative. But within that, we will have the flexibility to turn around the brand, to turn around the stores, to shut the stores, to open the new stores in a much more faster way so that we are able to achieve the results faster. At the same time, since it will be a unified team and therefore, the decision-making and qualitative engagement will be far superior to what it used to be earlier. And hence, we feel confident that along with these elements and the fact that we are going to be taking over marketing and innovation and the fact that we've already started or taking steps on the technology side, that gives us the confidence that over a period of time, Pizza Hut brand contribution margin should come closer to KFC. But to begin with, we will be able to kind of demonstrate that we are able to get to the low double-digit brand contribution.

We take the next question from the line of Manoj from ICICI Securities.

I had a couple of questions actually. The first one, in fact, was on the previous participant because I was actually looking to get some clarity on, let's say, your portfolio reshape opportunity, particularly on the Pizza Hut side. Manish, if I understood the response, it's very detailed, correctly, just to reconfirm, you're essentially saying that Pizza Hut, let's say, need to be restructured, bringing the profitability to a certain level and then there could be a phase for faster growth in that brand, right? Is that the right, let's say, I mean, conclusion?

See, very clearly, we need to restructure the brand, and we also need to drive the top line from a SSSG perspective because obviously, with the SSSG turning negative for the last few quarters, the deleverage has set in, which has kind of eroded the profitability. And hence, both will have to be kind of sorted out together. On restructuring side, obviously, we do not have the complete visibility on how the Sapphire individual store level portfolio looks like. We will engage into that once we have a set of regulatory approvals. We also need to engage together in terms of how should we drive the top line and the growth. And that is where the expertise from both sides will come about in terms of marketing initiatives, in terms of innovation that is required to be done. And hence, that's the reason I said initially that we will be able to come back to you guys in due course of time. So it's basically restructuring and SSSG drive. Those are the 2 important pieces to the turnaround.

Loud and clear. Just one quick follow-up and then I'll fall back in the queue. So thanks for the disclosure on the cost synergies, which is very impressive. But I have a question on any potential revenue synergies which you see. That's point number one. The second, let's say, how do we think about the cost synergies? Is that, let's say, more fuel for, let's say, investing behind a lot of the new brands, including the recent acquisition of BBK, et cetera. How do we think about the, let's say, the utilization of the cost synergy? Second one or rather the first one is on -- your thoughts on revenue synergies on both the brands?

Sure. So as you know, Manoj, that this is a unit level retail business, right? So therefore, in terms of -- and I mean, I don't want to kind of get into individual companies, but we've seen at times, for example, let's say, there is a brand store, which is there and there is a next store, food court store where the same brand is present. We also need to think through in terms of the channels because today, there is a very, very clear division available between a customer who consumes QSR at home versus a customer who consumes QSR by way of dine-in, and they are looking for that experience. It could be a weekend experience. It could be an evening experience. It could be in the malls, whatever channels we are talking about, and you guys are aware of that. So therefore, we need to have a distinct and very, very clearly articulated strategy for all of these channels, for all of these things. And therefore, let's say, once we become unified, these things will help a lot. And hence, very clearly, when I say SSSG, that's a revenue opportunity which kind of comes about, whereby, let's say, the 2 companies are able to kind of jointly strategize, jointly communicate, have a common strategy in terms of negotiations, in terms of execution and so on and so forth.

We take the next question from the line of Saurabh Kundan from Goldman Sachs.

Most of the questions are already answered. But just one quick one on KFC. The release does not like specifically mention that there will be an acceleration in the combined entity. But is it fair to assume that we could expect an acceleration in KFC? Because you've spoken of signing new DAs as well. Would it be fair to assume that being the stronger format, we could see an acceleration there on store basis?

See, Saurabh,our objective is to kind of accelerate the business, both on KFC as well as Pizza Hut as we come along, as we get unified. And with that objective is where the merger is taking place. So because India presents a large opportunity, the kind of conditions which are there in the market, it needs a unified strategy. It needs a unified thinking. I mean, anything or everything, a unified approach is far better compared to a 3-way approach. On KFC, the objective will be to kind of accelerate, but it will be a calibrated expansion. So just to give you an idea in terms of where we stand, whatever our DAs are, which is what we've indicated, will be kind of executed in due course. On KFC, whatever are the individual commitments between us as Devyani and Sapphire, the common DA will be very close to those numbers. So therefore, it will not be a huge one. But again, we've already indicated and we've kind of always demonstrated in the past that it's a market demand that needs to get created, which drives the store expansion. DA is just one element of it. So for example, if the market kind of grows better than what we expect, if we are able to kind of strategize better and if we have to go beyond the DAs also, we'll be quite happy to do that. So the market has to support. Capital is not an issue. What is important for us, as we've indicated in the past, is the return on capital.

Okay. Fair enough. My second and last question is that you will be investing in tech app for Pizza Hut. For KFC as well, can we assume that there will be a focus now on phone fleet? Is that a fair assumption to make? And in general, would you want to change -- you're saying a few things about Pizza Hut. Are you going to do that for KFC as well? Do you have the liberty to do that now?

Okay. So Saurabh, as I mentioned, on KFC also, the technology and SCM will get transferred and get transitioned to the merged entity as we go along. However, what is important and which I think Devanshu had raised initially that we need to build the capability and demonstrate that we are able to handle that with Yum!. So hence, our entire technology road map is going to be a common one for DIL, including KFC and including our own brand. Obviously, the top layer, which is the consumer UI, UX, the consumer interface, the brand representation, the brand colors, menu that will be individual for the brand. But the basic tech stack will be a common tech stack across DIL and across all of its brands. So hence, again, here, we will drive the benefits coming out of a unified tech strategy. And I did indicate that we've already shortlisted a large global technology vendor to partner with us. And we will be kind of looking at that internally, approving. We need to kind of take Yum! also on board for that so that they also get the confidence that we've taken the right decision. But technology for the entire company will be common, and for KFC also will get transitioned to us.

Understood. Just a follow-up, sir. In very simple terms, there are things like faster delivery like 20 minutes, et cetera, which a lot -- some of the -- which the market leader does. Is the effort towards that...

Absolutely. So if you look at, Saurabh, I mean, in the QSR world today, it's all about speed and innovation. And therefore, that is what gives the best results. And speed means the faster turnaround in the stores, the faster delivery to the consumers and so on and so forth, along with innovation, and that will be the big focus area for the merged entity.

We take next question from the line of Avi Mehta from Macquarie.

Just had a few clarificatory questions. First, if you could just explain the process through which the pricing for this 18.5% promoter stake will be determined and whether there is an exit fee in case the approvals do not fall in place. That's an unlikely event, but still wanted to kind of clarify that. And last clarification, just whether the marketing and innovation functions for KFC, are they also -- is this more a temporary arrangement? And will they also eventually move? Is that also part of this agreement? Just any clarification over there or any thoughts over there?

So Avi, let me answer the easier one first. So marketing and innovation for KFC will continue with Yum!. And there is nothing as part of the current agreements. On the other piece that you mentioned, I think I will request Sumeet to kind of come in for that.

Yes. So I think on the 18.5% promoter to promoter stake sale, it will conclude between 3 to 15 months on a mutually agreeable basis. It could be pre-approval of NCLT post basis bilateral arrangement. And I think the pricing, there has been a floor price set between the 2 parties of INR 280, which is driven by both the fairness valuation, which was around that level and the 90-day average as well. And then I think exact closing is bilateral between the 2 promoter entities, which could be anytime between 3 to 15 months from now from the date of signing and approval of the transaction.

And the exit fee bit, Sumeet? Is there any...

There is no exit timing. What would -- what exactly is exit fee bit...

In case the approvals don't pan out for any reason?

There's no -- I think there's nothing attached to -- there's no exit fee in that sense.

Got it. Manish, just one last bit, if I may ask you. On the cost synergies versus what is being paid to Yum!, the contrast, just wanted to understand how you look at it. So we're looking at a payout of INR 320 crores odd to Yum! for this merger and the synergies, which will eventually occur to us is only -- is about INR 210 crores to INR 220 crores. If you could help us explain how should we look at this? Is this correct to contrast and say that a lot of the synergies are going away? Or is this INR 320 crores already part of that factoring in? So your thoughts on that would be helpful.

So Avi, INR 320 crores, that onetime fee that we are going to be making payment to Yum!, that's a onetime payment, whereas synergies will accrue year after year for the entire whatever, lifespan of the business. So therefore, it's not a right comparison. So because -- I mean, this is only -- and this will get -- so in a way -- I mean, therefore, from your perspective, the way you look at -- maybe you can say the entire merger cost is a consideration of the share swap plus whatever, INR 320 crore of fee. And this will also get capitalized. So therefore, that is how it will work.

We take the next question from the line of Percy Panthaki from IIFL Securities.

My question is on KFC. Last several quarters, the SSSG for the brand has been quite weak, and the numbers have been similar within a small band for Devyani and Sapphire, SSSG for KFC. Given that you're not taking over any new functions like marketing, innovation, tech, et cetera, for KFC, how will this merger help you accelerate the SSSG for the KFC brand?

Percy, see, as I mentioned, for KFC also, we are going to be taking over technology and SCM in due course of time. And today, let's say, if you look at KFC, for both the businesses, close to 45% of the business gets home consumed or home delivered. And there, technology has a huge role to play. And hence, we are trying to sort that piece out by having a unified strategy on technology and a unified strategy on technology for all of our brands. So we feel it's going to definitely help us in terms of driving the top line. At the same time, whenever such situations are there, and we've been engaged in this deal for a while now, it does kind of defocus a little bit from the core proposition. With having this done already, we will kind of get back on the SSSG numbers also on the fundamentals of the business. So therefore, we feel very, very confident that we will be able to kind of recover more and deliver more versus where we are today. And again, we think that the current headwinds which are there are basically temporary in nature, are basically cyclical in nature with whatever is happening in the economy. And therefore, we should be able to come out of that very shortly.

Got it. Secondly, on the synergies of INR 210 crores to INR 225 crores, which you have mentioned, which you said is a net number because you are going to spend more also as you are taking over some functions from Yum!. So this is the number after that additional expense which will come in. Would you be able to give some idea on the quantum of these additional expense? So what I'm trying to see is what is the gross versus the net synergies? And also some breakup of these, like how much is going to come from royalty reduction, how much from corporate overhead, how much from logistics, et cetera? Any kind of flavor, if not the exact number?

Fine. So we will not be able to give you the exact numbers, but let me tell you how it kind of works. So if you look at the G&A between the 2 companies, obviously, that's an opportunity area, and we've taken some assumptions. Obviously, let's say, when we are integrating the 2 companies, there will be some costs. At the same time, as you indicated, that not only that we are supposed to take over some people from Yum! in terms of the functions that we are going to be taking over, we also need to build the leadership capabilities in those functional areas. We will also be contracting out, for example, I have indicated that we are close to finalizing a global technology vendor who will help us in this transformation journey. So that will also cost money. So all of these are costs. All of this is in the pipeline. We've just concluded our agreement stages we've just announced. We'll have to get into the details. We've not kind of crystallized every last penny because we've not engaged at that level. So in due course, we will come back and give you all the answers. We feel confident that we will be able to deliver these synergies by way of G&A, by way of additional Yum! incentives, by way of additional negotiations on the procurement costs and so on and so forth. And again, I think we also heard some feedback from the market that people are not very clear in terms of when these synergies will be realized. So we are expecting in the first year post-merger approval, we will be able to realize a substantial part of the synergy. Our estimate is that number will be close to 60% or upwards of 60%. And in the second year, we will be able to realize the balance amount of synergies. So within 2 years post merger, we will be able to realize 100% of the synergies that we've already indicated.

And would the gross synergies in the ballpark be about 1.5x the net synergies? Or I mean, is that more or less in the ballpark?

It will be lower than that, but not 1.5x. Remember that the 2 businesses are very, very similar to each other. If you look at the asset footprint, if you look at our systems, processes, everything, it's very, very complementary to each other. So it's not such a -- so I think from an integration point of view, this is probably, I would say, one of the best mergers in the history that it's such a complementary set of assets and complementary set of people as well as the processes as well as the IT systems and all that the gross cost is not going to be huge.

No, I was just asking because some of the Yum! functions will -- you will be bearing the cost now. So from that point of view, I was asking.

Yes, yes. So we've netted that off already.

We take the next question from the line of Gaurav Jogani from JM Financial.

So my question is with regards to the incentives, specifically with regards to the Pizza Hut. So are these incentives for a limited period of time and post which, once things are in order, proper shape, will these incentives kind of go away?

So Gaurav, we have incentives for a period of 10 years. And I think in your model beyond 10 years, the NPV, I guess, will be 0. So therefore, I mean, these are long term. These are here because as I said, Yum! is equally serious as we are in terms of turning around the Pizza Hut business. And they have really kind of helped us and supported us in putting the entire thing together so that we are able to kind of make sure that Pizza Hut comes back to its old glorious days and it starts to do extremely well. Similarly, on KFC also, the fact that we are going to be taking over supply chain and technology shows a very positive kind of momentum from Yum!'s side. So these are all here for the long term.

Sure. And sir, just a follow-up on the Pizza Hut only that they have globally -- Yum! has globally taken a strategic call to review the Pizza Hut as a business. So would that in any way have any effect on the Pizza Hut business going forward?

Gaurav, in our understanding, because we are not privy to whatever their negotiations or contracts or state positions are. But typically, let's say, in these situations, the current agreements and the current negotiations are protected. And therefore, hopefully, there should not be any impact on us, but we are not privy to what their negotiations are.

Ladies and gentlemen, we take the last question from the line of Athar Syed from Smart Sync Services.

Am I audible?

Yes, you are.

Sir, just wanted to know -- going forward, what would be our strategy after 1 or 2 years later, let's assume like where do we focus mainly, in online or off-line? Like recently, I read some QSR companies and I realized that some companies are getting good growth in online and facing some headwinds in off-line stores. So can you please throw some light on this?

So as I said before, we will not be able to -- because we are not allowed to engage very closely at this stage of the merger announcement. And hence, we will not be able to present to you right now in terms of what our strategy post-merger will be. Once we have some fundamental approvals in place, that is where we'll engage. We will discuss the merged company synergies, and we can come back to you in terms of what the synergies are, what the future strategy is, what the plans are, how are we going to be handling every brand. So that will happen in due course of time. As you know, that the entire merger approval process is going to take about 12 months' time. So it could be anywhere from 9 months to 15 months. And I think that's the time that we will utilize for defining the structures, the organization, the strategies and all of those things.

And can you please throw some light on that part, like our company has higher debt compared to Sapphire Foods and our debt to equity is higher compared to Sapphire. So can you throw some light on that part, if you can?

So as you know, let's say, whatever the market cap is or whatever the share price is that takes into account the debt, which sits on both the balance sheets. And if at all, let's say, when we come together, the balance sheet will become even more stronger versus where we are today. And even from a Devyani stand-alone perspective, the debt is a very, very small number. So it's not a very high amount of gearing that there's any concern. So therefore, that to us is not a big concern area in any case.

Ladies and gentlemen, with that, we conclude the question-and-answer session. I now hand the conference over to the management for their closing comments.

Okay. Thank you very much.

Thank you, everyone, for participation in our investors call. And I'm sure the management was able to give answers to the finer points of the merger, which whatever your doubts were. And still, if you want, you're most welcome to contact the Investor Relations department of the company. And once again, thank you very much.

Thank you. Ladies and gentlemen, that concludes today's conference call. Thank you for joining us, and you may now disconnect your lines.

Thank you very much.