Sapphire Foods India Limited has informed the Exchange about Transcript
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Sapphire Foods posted Q1 FY26 revenue of Rs. 775 crore, up 8% YoY, with total restaurant count rising to 974 after adding 8 KFC, 2 Pizza Hut India, and 1 Pizza Hut Sri Lanka outlets. However, profitability took a hit: consolidated restaurant EBITDA fell 13% YoY with margins at 12.2% (down 290 bps), and adjusted EBITDA dropped 22% to Rs. 55 crore. The company slipped to a small consolidated loss of Rs. 2 crore (adjusted PAT positive at Rs. 6 crore). KFC same-store sales were flat though transaction growth turned positive for the first time in 12 quarters, driven by value campaigns like '9 for 299.' Pizza Hut India continued to struggle with -8% same-store sales, though Tamil Nadu (where mass-media advertising is used) delivered positive growth, reinforcing management's revival strategy. Sri Lanka delivered robust 12% same-store sales growth but wage inflation pressured margins there. Management indicated margins have largely bottomed out at current levels, with Sri Lanka expected to see margin improvement from Q2 FY26.
Mixed signals for shareholders—revenue growth and store expansion continue, but margin pressure from value investments and wage costs weighed on Q1 profitability. Management's confidence that margins have bottomed and that value campaigns will eventually drive sustained same-store sales growth is a positive, though Pizza Hut's continued weakness and reluctance to give long-term guidance may keep the stock range-bound in the near term.