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, while Pizza Hut faced continued challenges except in Tamil Nadu. Sri Lanka operations remained strong, and digital and product innovations are expected to support future growth.
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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 crores and a unified technology strategy. Integration is planned within two years, with regulatory approvals and a share swap structure in place.
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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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Sales grew 11% year-over-year with 91 new restaurants, but adjusted EBITDA declined 4%. KFC margins held steady despite negative SSSG, while Pizza Hut's Q4 was impacted by reduced advertising. Sri Lanka delivered a strong turnaround with double-digit growth and improved margins.
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Double-digit revenue and EBITDA growth achieved across all business verticals in Q3 FY25, with stable margins and continued store expansion. KFC and Pizza Hut showed improved trends, while Sri Lanka delivered its best quarter in over two years.
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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.