New Delhi, Jan. 7 -- The proposed merger of Devyani International Ltd and Sapphire Foods Ltd appears strategically sound. In a joint investor call on Tuesday, the two management teams described it as one of the most complementary transactions India's quick-service restaurant (QSR) sector has seen.

The bigger question, however, is whether consolidation can address the more fundamental challenge of weak demand at existing stores. Both companies reported negative same-store sales growth in the first half of FY26 across their key brands. 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.

When two independent franchisees of the same global brands reco...