Devyani International Adjusts Quality Grade Amidst Mixed Financial Performance Indicators

Devyani International, a small-cap player in the leisure services industry, has recently undergone a quality adjustment reflecting its current financial standing. The company has demonstrated notable sales growth over the past five years, achieving a rate of 32.88%. However, its EBIT growth during the same period has been relatively modest at 1.02%.
In terms of financial health, the company's EBIT to interest ratio stands at 1.50, while its debt to EBITDA ratio is recorded at 7.76, indicating a higher leverage position. The net debt to equity ratio is 1.53, which further highlights the company's reliance on debt financing. Additionally, the sales to capital employed ratio is at 0.86, suggesting efficiency challenges in utilizing capital for generating sales.

Devyani's tax ratio is 15.66%, and it maintains a dividend payout ratio of 0%, with no pledged shares. Institutional holding is at 26.31%, reflecting a moderate level of institutional interest. The return metrics reveal that the company has underperformed compared to the Sensex across various time frames, including a year-to-date return of -18.52% versus the Sensex's 6.50%.

In comparison to its peers, Devyani International's performance metrics indicate a challenging position within the leisure services sector, particularly when juxtaposed with companies like Sapphire Foods and Saregama India, which exhibit stronger financial indicators.