Sapphire Foods India (SAPPHIRE) Q4 23/24 earnings summary

Executive summary

• FY24 restaurant sales rose 15% to ₹25,880 mn; EBITDA increased 9% to ₹4,718 mn, while adjusted EBITDA grew 3% to ₹2,717 mn.

• The network reached 872 restaurants at Mar. 31, 2024; 129 net additions were reported for FY24, including 88 KFC India openings.

• KFC India delivered record annual restaurant EBITDA margin of 19.7%; Pizza Hut faced sharp sales and margin pressure, while Sri Lanka grew in INR terms.

Financial highlights

• Q4 FY24 restaurant sales were ₹6,297 mn, up 13% YoY; FY24 sales were ₹25,880 mn, up 15%.

• Q4 EBITDA was ₹1,102 mn, up 7%, at 17.5% margin, down 90 bps; FY EBITDA was ₹4,718 mn, up 9%, at 18.2% margin, down 100 bps.

• Adjusted EBITDA, before Ind AS 116, was ₹544 mn in Q4, down 3% at 8.6% margin, and ₹2,717 mn for FY24, up 3% at 10.5% margin.

• FY24 PBT fell 36% to ₹699 mn; PAT was ₹520 mn versus ₹2,332 mn, while adjusted PAT was ₹786 mn (3.0% of sales).

• Consolidated gross margin was 69.1% in Q4, up 100 bps YoY; FY24 was 68.9%, up 130 bps.

Outlook and guidance

• Pizza Hut’s brand-revival initiatives are expected to take a few quarters; the plan includes product innovation, higher marketing investment, and improved dine-in and delivery operations.

• Pizza Hut planned cautious expansion, portfolio corrections of ~3–5% over the next two quarters, and refurbs of ~10% in 2024.

• KFC remained on track to double its restaurant count over ~3 years from the Dec. 2021 base, supported by value offers and smaller omni-channel expansion priorities.