Sapphire Foods India (SAPPHIRE) Q3 24/25 earnings summary

Executive summary

• Achieved double-digit revenue growth of 14% YoY in Q3 FY25, reaching INR 7,550-7,565.37 million, with all business verticals (KFC, Pizza Hut, Sri Lanka) contributing.

• Adjusted EBITDA grew 12% YoY to INR 811 million (margin 10.7%), with consolidated EBITDA up 14% YoY to INR 1,398-1,400 million (margin 18.5%).

• Added 54 new restaurants in Q3 FY25, bringing the total to 963 as of December 31, 2024; continued expansion in India and Sri Lanka, with Maldives operations fully exited.

• Board approved unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2024, reviewed by statutory auditors with no material misstatements.

• Merger of two wholly owned subsidiaries completed, effective from March 31, 2024, with retrospective restatement.

Financial highlights

• Q3 FY25 consolidated revenue from operations: INR 7,550-7,565.37 million, up 14% YoY; 9M FY25: INR 21,655 million, up 11% YoY.

• Q3 FY25 Adj. PAT: INR 194 million (margin 2.6%); Q3 FY25 PAT: INR 127.32 million (margin 1.7%).

• Gross margin for Q3 FY25: 68.7% (down 30 bps YoY); India gross margin: 69.8% (down 30 bps YoY).

• 9M FY25 Adj. PBT: INR 637 million (down 35% YoY); 9M FY25 PAT: INR 147 million (down 71% YoY), impacted by exceptional items (Maldives impairment INR 114 million).

• Exceptional item: INR 114-169.64 million impairment in subsidiary assets and investments.

Outlook and guidance

• KFC store expansion to continue at 70-80 stores per year; Pizza Hut expansion to remain cautious until double-digit store-level EBITDA is achieved.

• Focus on SSSG revival for KFC India through value offers, product innovation, and day-part targeting.

• Sri Lanka business targets at least 15% revenue CAGR over the medium term, with ongoing store expansion opportunities.

• No significant rental pressure anticipated; long-term leases in place.

• Company continues to operate in the restaurant segment with a focus on operational efficiency.