Sapphire Foods India (SAPPHIRE) Q3 25/26 earnings summary

Executive summary

• Q3 FY26 saw improved profitability, led by KFC, with consolidated revenue of INR 8,138.29 million (₹8,112 Mn reported elsewhere), up 7% year-over-year, and total restaurant count reaching 1,028 as of Dec 31, 2025.

• KFC India revenue grew 11% YoY, while Pizza Hut India revenue declined 11% YoY; Sri Lanka revenue rose 15% in LKR.

• Tamil Nadu market for Pizza Hut continues to outperform with double-digit SSSG and EBITDA delta versus other regions.

• Unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2025, were approved and reviewed by the Board and Audit Committee.

• Scheme of arrangement for amalgamation with Devyani International Limited approved, subject to regulatory/statutory approvals, with a share swap ratio of 177:100.

Financial highlights

• Consolidated revenue from operations for Q3 FY26 was INR 8,138.29 million, up from INR 7,516.86 million in Q3 FY25.

• Consolidated Adj. EBITDA declined 5% YoY to INR 774 million (margin 9.5%), and EBITDA fell 3% YoY to INR 1,360 million (margin 16.8%).

• Adj. PBT before exceptionals was INR 238 million (2.9% margin), down 7% YoY; consolidated net loss after tax for Q3 FY26 was INR 48.08 million.

• Exceptional items for the quarter included INR 80.26 million impact from new labour codes and INR 31.37 million merger-related expenses.

• Gross margin remained stable at 68.9% in Q3 FY26.

Outlook and guidance

• KFC store expansion guidance remains at 60-80 new stores per year, with focus on value offerings and digital initiatives.

• Sri Lanka store growth expected to continue at high single digits, possibly reaching 10 stores per year.

• Pizza Hut expansion paused; focus remains on brand revival and alignment with franchisee partner post-CCI approval.

• The amalgamation with Devyani International Limited is expected to be effective from April 1, 2026, pending approvals.