Yum! Restaurants India cuts ad spend, reports profit in FY24

According to reports by PTI, Yum! Restaurants (India), which operates QSR (Quick Service Restaurant) brands like Pizza Hut and KFC in India, returned to profitability for the financial year 2023-24, reporting a net profit of Rs 162.04 crore. This marked a significant turnaround from the loss of Rs 108.17 crore posted in FY23. Revenue from operations rose by 6.6 per cent to Rs 689.93 crore, according to an Registrar of Companies filing.

The company’s total income saw a notable increase of 13.4 per cent, reaching Rs 832.05 crore. This growth was primarily driven by other income, which amounted to Rs 142.11 crore, up from Rs 86.46 crore the previous year. The boost in other income was largely attributed to gains from the sale of Yum! Restaurants’ investment in Devyani International Ltd.

The company’s advertising and promotional expenses were reported at Rs 220.69 crore for FY24, reflecting a 3.8 per cent decrease from the prior year.

In addition to reporting positive results, the company disclosed that it had sold its entire stake in Devyani International Ltd in a block deal for Rs 871.09 crore. This stake was initially acquired for Rs 230 crore as part of a business transfer agreement in FY21. The transaction yielded an overall gain of Rs 635.05 crore (net of selling expenses of Rs 6.04 crore). A gain of Rs 97.20 crore, recognised under ‘other income’ due to fair value through profit or loss (FVTPL) accounting, was recorded in the current fiscal year.

For FY24, the company reported total expenses of Rs 671.33 crore, down by 22.16 per cent from the previous year, contributing to its improved profitability.

The company is the holding entity for Pizza Hut India Marketing and KFC India Marketing and manages the development and operations of these brands through a combination of company-owned stores and franchisees. It also provides support services to affiliated restaurants in select neighbouring countries. The franchise agreements stipulate that franchisees contribute a percentage of their revenues to advertising efforts, while certain business partners also make contributions towards marketing and promotional activities.

The company is owned by Singapore-based Yum Asia Franchisee Pte Ltd, a subsidiary of Louisville, Kentucky-based Yum! Brands Inc.