Sapphire Foods India (SAPPHIRE) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 saw 7% year-over-year revenue growth, reaching ₹7,424.37 million, with KFC revenue up 7% and Pizza Hut India revenue down 6%, while Sri Lanka operations grew 18% in LKR terms and retained the number one QSR position.

• The company added 19 KFC, 2 Pizza Hut restaurants in India, and 2 new outlets in Sri Lanka, reaching 997 outlets by September 30, 2025, and inaugurated its 1,000th restaurant in Tamil Nadu in October 2025.

• Unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2025, were approved by the Board and reviewed by auditors without qualification.

Financial highlights

• Consolidated revenue from operations for Q2 FY26 was ₹7,424.37 million, up from ₹6,956.97 million in Q2 FY25; consolidated restaurant sales rose 7% YoY.

• Consolidated restaurant EBITDA declined 12% YoY; margin at 11.3%, down 240 bps; adjusted EBITDA was ₹450 million, down 24% YoY, with a margin of 6.1%.

• Consolidated net loss after tax for Q2 FY26 was ₹127.87 million; adjusted PAT was negative ₹36 million.

• KFC gross margin dropped 110 bps YoY due to value offers; restaurant EBITDA at 13.8%.

• Pizza Hut gross margin at 74.4%, restaurant EBITDA at -1.8%; Sri Lanka EBITDA margin at 15.4%.

Outlook and guidance

• Early Q3 numbers look promising, but management prefers to wait until end of November for a clearer trend.

• Margin levels for KFC and Pizza Hut expected to remain at current levels unless SSG improves; expansion in Pizza Hut will be cautious, guided by payback rates and brand performance.

• Continued focus on omni-channel expansion, innovation, and value campaigns for KFC and Pizza Hut, with sustained investment in advertising and product innovation, especially in Tamil Nadu and Sri Lanka.