India · Delayed Price · Currency is INR Sapphire Foods India Earnings Call Transcripts
Fiscal Year 2026
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Q4 FY26 saw record SSSG and Adjusted EBITDA growth, led by KFC's 15% revenue rise and Sri Lanka's double-digit SSSG, despite inflation and LPG challenges. Margins improved, new store expansion continued, and strategic value offers drove consumer recruitment.
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Q3 FY26 delivered improved profitability with KFC leading growth and Sri Lanka operations performing strongly, while Pizza Hut faced challenges outside Tamil Nadu. Store expansion continues for KFC and Sri Lanka, with digital and ESG initiatives advancing.
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The merger will create a leading F&B platform in India, combining over 3,000 stores and major brands, with expected annual synergies of INR 210-225 crore and a unified tech strategy. Regulatory approvals are pending, and full integration is targeted within 9-15 months.
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Revenue grew 7% year-over-year to ₹740 crores, with KFC up 7% and Pizza Hut down 6%. EBITDA margins declined due to value campaigns and wage hikes, but Sri Lanka delivered strong growth. Expansion continues for KFC, while Pizza Hut growth is focused on proven markets like Tamil Nadu.
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EBITDA declined 9% year-over-year with margin pressure from value campaigns and wage inflation. KFC saw flat SSG but positive transaction growth, while Pizza Hut lagged except in Tamil Nadu. Sri Lanka delivered strong SSG but faced margin headwinds from wage hikes.
Fiscal Year 2025
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Double-digit growth in restaurant count and revenue was achieved despite a tough environment, with KFC and Sri Lanka showing resilience but Pizza Hut impacted by marketing disputes and lower margins. Guidance remains cautious, with store expansion focused on KFC and stable margins expected if SSSG improves.
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Double-digit revenue and EBITDA growth were achieved across all business verticals, with strong expansion in India and Sri Lanka. KFC and Pizza Hut showed improving trends, though consumer sentiment remains soft and recovery is gradual. Store expansion and operational efficiency remain key priorities.
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Q2 FY25 saw 8% revenue growth but EBITDA declined due to weak demand, negative SSSG, and higher costs. KFC and Pizza Hut both faced margin pressure, while Sri Lanka operations improved. Management remains cautiously optimistic for H2, with expansion plans moderated.
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Q1 FY25 saw 10% sales growth and steady EBITDA, with KFC and Pizza Hut facing negative SSSG due to subdued demand and festival impacts. Pizza Hut showed sequential recovery, Sri Lanka delivered strong growth, and store expansion remains cautious amid margin pressures and macro headwinds.