Sapphire Foods India (SAPPHIRE) Q1 25/26 earnings summary

Executive summary

• Consolidated revenue grew to Rs. 7,768.28 million (up 8–11% YoY), with total restaurant count reaching 974 as of June 30, 2025.

• Consolidated EBITDA post-India was INR 113 crore (14.6%), down 9% YoY, with a 270 bps margin decline; Adj. EBITDA margin fell to 7.1%.

• Consolidated PAT was negative at -₹17 Mn (-0.2%), while Adj. PAT was ₹58 Mn (0.7%).

• KFC's SSG was flat YoY but transaction growth was positive, driven by value campaigns; Pizza Hut saw -5% revenue growth and -8% SSG.

• Sri Lanka delivered 12% SSG and 15% system growth, with EBITDA margin at 12.7%, though wage hikes offset margin gains.

Financial highlights

• Consolidated restaurant sales rose to ₹7,748 Mn in Q1 FY26 from ₹7,165 Mn in Q1 FY25 (8% YoY growth).

• Gross margin declined to 67.6% from 68.8% YoY; KFC gross margin dropped by 90–110 bps, Pizza Hut by 150 bps.

• Adj. PBT fell 65% YoY to ₹83 Mn; reported PBT was -₹18 Mn.

• Consolidated net loss after tax was Rs. 17.38 million, compared to a profit of Rs. 20.24 million in the same quarter last year.

• Pizza Hut restaurant EBITDA at -2.5%, break-even excluding extra marketing spend; Sri Lanka restaurant EBITDA at 12.7%.

Outlook and guidance

• Management expects margin improvement in Sri Lanka following price increases and will focus on omni-channel expansion.

• KFC India aims to maintain expansion pace of 60-80 stores per year and strengthen digital and delivery channels.

• Pizza Hut's revival strategy will be expanded pan-India as operational alignment is achieved, with focus on product innovation and mass media advertising.

• The company remains focused on core restaurant operations and addressing operational challenges.