Sapphire Foods India (SAPPHIRE) Q4 24/25 earnings summary

Executive summary

• Achieved 11% year-over-year sales growth and 10% increase in restaurant count, adding 91 new locations to reach 963 restaurants by year-end, despite a challenging environment.

• KFC reached 500 restaurants, doubling its count over three years, and was recognized as the world's best KFC franchisee; Sapphire Foods maintained its No.1 QSR ranking in India on the Dow Jones Sustainability Index.

• Sri Lanka operations delivered a strong turnaround with 14% revenue growth and restaurant EBITDA margin at 15.4%.

• Audited standalone and consolidated financial results for FY25 were approved, with unmodified opinions from statutory auditors.

• Senior management changes included the resignation of the Sr. VP & Head of Business Development and reassignment of responsibilities.

Financial highlights

• FY25 consolidated revenue grew 11% year-over-year to ₹28,818.64 million; Q4 revenue reached ₹7,099 million, up 13% year-over-year.

• FY25 adjusted EBITDA declined 4% year-over-year to ₹2,616 million (margin 9.1%); Q4 adjusted EBITDA was ₹508 million (margin 7.2%).

• FY25 consolidated net profit after tax was ₹167.04 million, down from ₹519.56 million in FY24; Q4 PAT was ₹20 million (margin 0.3%).

• Gross margin for FY25 was 68.7% (down 20 bps YoY); India gross margin stable at 69.9%.

• Pizza Hut Q4 restaurant EBITDA was -4.6%, with gross margin down 70 bps.

Outlook and guidance

• KFC net store additions expected at 60-80 per year; Pizza Hut to add 20-25 stores annually, with a cautious expansion approach.

• Continued investment in digital, delivery, and product innovation for both KFC and Pizza Hut.

• Pizza Hut EBITDA expected to remain in low single digits for the next 12 months, with double-digit margins deferred until higher ADS is achieved.

• Free cash flow generation may not be positive next year due to renewal fees and major refurbishments, requiring a dip into cash reserves.

• No explicit forward-looking guidance provided, but management notes ongoing appeal against a significant GST demand and confidence in a favorable outcome.