Q2 25/26

Oct 17, 2025

Ladies and gentlemen, good day and welcome to the Sapphire Foods India Ltd Q2 FY26 earnings call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanjay Purohit. Thank you and over to you, sir. Good afternoon, everybody. Welcome to the Quarter Two FY26 financial performance presentation. Our quarter has been a reasonable quarter for us, and the reason why I say reasonable is, one, KFC revenue grew by 7%. If I exclude the impact of Navratri, Navratri was entirely in this quarter this year, whereas last year it was in Quarter Three. Therefore, if on a like-for-like basis, actually we would have grown double-digit even in this quarter. Pizza Hut revenue declined by 6%. However, importantly, in Tamil Nadu, which is a Sapphire-exclusive territory, we grew double-digit revenue. I think it just proves the Pizza Hut-Sapphire strategy and offers a clear hypothesis for why this brand can grow or why and how this brand can grow. Finally, Sri Lanka grew handsomely by 18% in LKR terms, owing to the continued investment that we did in brand innovation, marketing value, really the tenets of the strategy we would like to execute in India. We retained the number one QSR position in the country. We delivered a revenue of ₹740 crores, overall growth of 7% year on year. SSSG trends for both KFC and Pizza Hut this quarter remain similar as previous quarter, except, as I said, the impact of KFC due to the shift of Navratri days from Quarter Three to Quarter Two. In Quarter Two, we added 19 KFC restaurants, two Pizza Huts in India, one Pizza Hut and one Taco Bell in Sri Lanka. Our total restaurant count was 997 as on 30th September. With immense pride, we inaugurated the 1,000th Sapphire restaurant yesterday at Gumadipundi in Tamil Nadu. This is a KFC restaurant. Our consolidated restaurant EBITDA declined by 12% year on year. Margin was 11.3%, down 240 basis points. Adjusted EBITDA was ₹45 crores, declined 24% year on year. This also has the Navratri impact. Excluding Navratri, our performance on adjusted EBITDA was better, negative over last year, but still better from a trend perspective versus Quarter One. Our adjusted EBITDA margin was 6.1%. Console EBITDA at ₹106.2 crores or 14.3% declined 8% year on year or 230 basis points. Consolidated PAT was loss at ₹12.8 crores, 1.7% negative. Adjusted PAT, however, was negative ₹3.6 crores or negative 0.5%. Let us now look at the KFC highlights. I want to take you through to page number 20. Our KFC brand priorities are fairly consistent. We want to drive penetration and frequency for the KFC brand. This quarter, our major marketing spends were behind the taste, the Epic Saver campaign to popularize our core buckets. We offered nine pieces for ₹299. The promotion and the value campaign did offer some green shoots from a transaction perspective. While KFC was negative 3% SSSG for the quarter, up to Navratri, we were flat on SSSG but positive on transactions. Therefore, we have extended this campaign to Quarter Three also, but included our three hero innovation products of pizza, Double Down, and the Gold Burger. Much of our advertising, like I said, on value was behind nine for ₹299. We rolled out digital kiosks across 50% of our estate, and our own delivery through the KFC app continues to be the best-performing channel. Our current pace of expansion should be in the region of 60 to 80 stores a year. From an operational excellence perspective, we are now above four rating across Swiggy, Zomato, and Google. I'll hand it over to Vijay for the financial numbers. I am on slide number 25, which gives channel-wise contribution. Dine-in and takeaway for the quarter came at 55%, delivery at 45%. This delivery improved by 300 bps over last year. One of the key reasons was the way our own channel through our own app has performed. It has actually grown very healthy over the last two quarters also. That's one of the reasons as well. In terms of SSSG, it was flat ex-Navratri, backed by low single digit in terms of SSTG, same-store transaction growth. Overall revenue grew by 10% ex-Navratri for the brand. We had 19 store additions during the quarter. Gross margin, while it dropped 110 bps vis-à-vis last year, is in a similar line as Quarter One. The reason we dropped on gross margin vis-à-vis last year was, as mentioned previously as well, that we continue to invest behind the value offers, namely the Epic Saver campaign. The restaurant EBITDA came at 13.8%, which was impacted by the negative SSSG on account of the Navratri impact, the higher delivery mix, and lower gross margin. Slide number 28 shows four-year and five-quarter trend. We continue to build on the transaction gains, which we had in Quarter One. We have further bolstered our Epic Saver campaign in Quarter Three, as Sanjay Purohit mentioned, by adding three more hero products. We are confident that Quarter Three, we should be able to deliver slightly better on the SSSG terms. Let's look at Pizza Hut. I take you to slide number 30. While the brand declined revenue by 6%, our Tamil Nadu results prove that the Sapphire dine-in forward omnichannel customer promise, with sustained investment in innovation and mass media, can definitely revive the Pizza Hut brand. Apart from all the work that we do at the operational end, our innovation pipeline continued to be strong. You'll remember we launched the Juicy Delicious range in Quarter One and Quarter Two. In this quarter, in October, we have launched the Ultimate Cheese Pizza and the Cheesy Pocket, which emphasizes or which looks at satisfying the customer need for additional cheese. It's a great product, and I invite all of you all to try it. We also launched the cold coffee range, and it's in about 80% of our stores now. Apart from innovation, we also focused on dine-in value. You'll see in Pizza Hut, our dine-in contribution actually improved versus last year. Exclusive value offerings like buy one, get three, four-course meals starting at 99, and unlimited pizza Fridays helped ensure that dine-in SSSG was better than delivery. Finally, in Tamil Nadu, both Sapphire and Yum! continue to invest in mass media advertising. We saw a mid-teens delta in performance compared to the rest of the country, both SSSG as well as SG. On the next page, you can see the Ultimate Cheese product has been marketed as Flip to the Cheese. Eat it ultra, starting from the crust. Very interesting product. The cold coffee, Cheesy Pockets, Juicy Delicious. On slide number 33, you'll see a picture of a food truck that we've just launched in Mumbai, also to take care of congregation points that has started well. We'll see how to scale it up later on. Over to Vijay for the numbers. Slide 35 gives channel-wise contribution on Pizza Hut. Dine-in and takeaway versus delivery mix came at 50/50. As you can see, the dine-in plus takeaway mix improved. The several promotions which Sanjay spoke about actually helped us gain dine-in share vis-à-vis delivery. Overall, Pizza Hut had negative SSSG and brand declined by 6%. While Tamil Nadu Sapphire territory, Sapphire-exclusive territory, had mid-teens delta in performance. Gross margin came at 74.4%, which is similar to Quarter One. As the case was in KFC, here too, we continue to invest significantly behind the value offers to try and drive the transactions, whether it's Juicy Delicious, unlimited pizza Friday, buy one, get three. There are some of the examples on which we had investment through gross margins. Restaurant EBITDA came at 1.8%. If I exclude the additional marketing investments, which is over and above the Yum! agreements, the brand is at a break-even level. Slide 38 gives four-year and five-quarter trend. As mentioned by Sanjay, we have got the recipe to unlock the potential of the brand as proven and reflected in Tamil Nadu performance. We are sure that we should be able to replicate this model sometime in the near future, pan-India. Let's now look at the Sri Lanka business, which again, if I were to remind you, is what is replicated in Tamil Nadu and clearly works. Our business has grown there double-digit same-store sales growth and easily. Two years ago, after the country went through a very significant economic crisis, at that point in time, we remained calm. We continued to invest in our people and in offering value to consumers. We are seeing the benefits of that coming back and reflecting in our growth on both same-store sales growth as well as system revenue. Because we've largely mitigated the Quarter One impact of the employee minimum wage increase, our restaurant EBITDA also has come quite strong. Vijay will take us through the numbers. Slide 43, channel-wise has remained steady in Sri Lanka year on year. The SSG came at 14% in LKR terms. While overall revenue grew at 18% in LKR terms, when converted to Indian rupees, the revenue grew at 23%. The gross margin improved by 220 bps year on year on account of a couple of things. First, we took a 4% to 5% price increase in Quarter Two. There was some reduction in our promotional offers, which helped us improve our gross margin by 220 basis points. Restaurant EBITDA came in at 15.4%. If you guys would remember, Quarter One, it was 12.7%. It was impacted by, as Sanjay Purohit mentioned, the minimum wage increase, which came in somewhere in May, but retrospectively from April, which we were not able to mitigate during the previous quarter. We were confident that we should be able to mitigate. That's reflected in our performance, which came at a really healthy number at 15.4% for restaurant EBITDA. Slide 47 is four-year and five-quarter trend. Sri Lanka is now delivering consistently and delivering strong performance. This is the same dining forward omnichannel format we are now trying to replicate in India, which the hypothesis of which has already been now proven in Tamil Nadu. Hopefully, we should be able to replicate this across other states as well for Pizza Hut India. That's it from us. I just want to repeat our messages. We think it was a reasonable quarter. KFC growing at double digit, excluding Navratri, there is a clear way forward for the Pizza Hut brand versus our experience in Tamil Nadu and Sri Lanka. Sri Lanka, after a really big blow to the business two years ago, has recovered and recovered really fast and continues to be the number one QSR brand in the country. Along with all the work that we are doing, the macro trends also seem positive. GST reduction should put further money into consumer wallets, as indeed has the income tax reduction. We are hoping that as we get into Quarter Three and into calendar year 2026, we should see consumer sentiment improving. I'll now hand it over to you all for questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. In order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We can start, Vikrant. The first question is from the line of Avimeta from M. Acquire Capital. Please go ahead. Yeah. Hi, sir. Am I audible? Yes, Avimeta, Avi. Yeah. Hi, sir. I had three questions. With your permission, I'll just put them out up front. First, your comment on 3Q. Any signs of a recovery as the festivities kick in? Would love your thoughts on whether you believe you know how we did in Sri Lanka. Levers are in place to be able to, at worst, maintain margins at current levels, even if the demand environment takes time to recover. That was my first question. Should I put all the questions up front, sir? How would you prefer? Yeah, up front. Okay. The second part, sir, I wanted to understand is now we've seen two quarters of stronger performance in the Tamil Nadu market. Given, and it's clearly the proof is out there, I would just like to know what's the process and your thoughts on the timelines for this to flow through to other markets. The last bit was, just wanted to understand, this resignation that has come in of the nominee director of TR Capital, what triggered it would be useful. That's all from my side. Thank you. Let me just take it from the back. The resignation, Mr. Rohit Muttu has left TR Capital. Therefore, being the nominee director backed by TR Capital, he has to move out of the board of Sapphire Foods also. He's resigned from TR Capital, and therefore, he has to resign from all his obligations that he used to fulfill. For TR Capital. For TR Capital. Got it. TR Capital is one of the shareholders in Sapphire Mauritius, which is our promoter entity. It has happened in a regular course and an ordinary course. That is one. In Quarter Two, in third quarter, are we seeing signs of recovery? I'm really, it is 16, 17 days, and we are overlapping Navratri. The numbers look very good at this moment, Avi. I will just let a little more time go. Perhaps at the end of November, we could say that things have started to improve. The Sri Lanka and Tier 1 case is the same. You're right. There is a clear case on how we could grow the Pizza Hut brand. I think we have got ongoing discussions with all relevant parties on how we could take this. It does call for additional investments. There's no doubt about that. Apart from the additional investments, I must say that we are aligned on all other aspects of the brand journey. However, if we're not going to spend on building awareness, if you're not going to spend money on that, then all our innovation, all the work that we do on value, perhaps becomes blind to consumers. I think those are ongoing discussions, and it might take another couple of quarters for us to align. On the margin front, with the Sri Lanka example, I meant margins. Because Sri Lanka, you know, this minimum wage increase, you were able to effectively manage it. Do you think a similar situation is true for India? That even if, say, worst case demand doesn't or takes time to recover, we would still should be at least at these margins across the brands. Is that a fair statement to make? Yeah. From a KFC perspective, now we have got nearly two and a half years of flat or negative SSG. Therefore, margins undoubtedly are impacted. If you see Quarter One, it was in the region of 15.5%, give or take a bit. Quarter Two is lower because of lower level of sale. Quarter Three, we should recover that drop of Quarter Two. I think margins will remain in this region, which is lower than last year. What we require now is SSG to come back to start increasing from these levels onwards. From a Pizza Hut perspective, it's again, ADS has to improve. Once ADS improves, that's the way that margins will also start to improve. Thank you, sir. Very clear. I'll come back in the queue for the other questions. Thank you. Sir, I wish you a happy New Valley to the team as well. Sorry for that. Thank you, Avi. Nice of you. Thank you. The next question is from the line of Gaurav Jagani from JM Financial. Please go ahead. Thank you for taking my question, sir. Diwali greetings to the management. Sir, my first question is towards the negative days that we are overlapping. The negative SSG has been there for quite some time. What does you feel, is the entire QSR market in that sense remains impacted? Is it specific to our brands that we have seen this impact? Please shed some light on the overall macro color on the QSR space, if you can give. In general, and this has been consistent with what we have said up till now, we are finding that consumer discretionary spends have been constrained. That has been compounded further by a large number of competitors, generally in food. This has been the case over the last, I would say, two years. Nothing has improved from that perspective. Yet it is possible for large brands to grow. Large brands have the greatest ability to really change performance. In KFC, that's exactly what we are attempting. Perhaps it will take us a couple of quarters to really get all our initiatives in place. In Pizza Hut, we know what we could do to drive growth. If nothing else happens in the macro environment, this is what has caused generally growth in the QSR segment at a brand level to be muted. However, on the macro front, we are clearly seeing the government taking exceedingly bold steps on GST reduction. Therefore, prices of all their food, the household baskets should reduce and put money into the consumer's wallet, which then should go behind discretionary spends. Okay. Sure. Thanks. Sir, just lastly on the Sri Lanka bit, though we have seen a very handsome gross margin expansion, at the EBITDA front, the EBITDA margin has kind of marginally declined. Are there any other expenses that have increased meaningfully that is leading to lower translation towards the EBITDA front? In fact, that impact was seen in Quarter One itself. Despite a healthy double-digit SSG and SSTG growth in Sri Lanka in Quarter One, if you see, we have dropped the margin bps in Quarter One. That happened because there was almost a 27% increase in minimum wages in Sri Lanka. It happened in May, effective from April. It left us with a very small amount of time to try and mitigate that impact in Quarter One. This is what we mitigated starting Quarter Two with a combination of some restructuring in terms of the salaries, the incentive structures, and a price increase, which we took in July. The combination of this allowed us to still cross the 15% mark. This is the impact. Yes, generally, a 14% SSG should have led to a probably even higher restaurant EBITDA. Unfortunately, the increase in minimum wages was too high and substantial that some of those benefits were eaten away because of that increase. Sure. Just to follow up on this, I mean, though you know the performance may remain better in the next coming two to three quarters, however, until this cost kind of adverse rises, we could possibly see this impact at least between the gross and the EBITDA line. In Sri Lanka, yes. Okay, sir. Thank you. That's all from me. Thank you. The next question is from the line of Harit Kapoor from Investech. Please go ahead. Good evening. I just had three questions. I'll put them up front. One was on how do you look at this continued kind of decline in dine-in shares because it actually, or dine-in mix, because it actually also kind of has a margin impact with every 100 basis points cut. Do you see in any way that we believe we can kind of address this and keep the shares around that 35, 36% for KFC? Or do you believe this is slightly more structural in nature and we will see a kind of dipping trend? That's my first question. The second one was, in KFC again, should we assume that we are starting off the quarter from a base of plus 3 because that's where the impact has been? Depending on the market macro, etc., hopefully, it moves above that. The third one was on the gross margins in both KFC and Pizza Hut, given that the focus is on value, providing more to the consumer, etc. Our first half GM, slightly the more normal for you as we look at to 67 odd in KFC and 74, 74.5 odd in Pizza Hut. Those are my three questions. Thank you. The continued decline on the dining, a few reasons to that. When you look at the dining decline, you're looking at the mix. First of all, there are a few reasons why the delivery mix looks significantly better. The first one is our OLO, which is our own channel. Our own app performance has been really good over the last one year. It has grown probably 2X to 3X more than what aggregators would have delivered in terms of the growth, our own app. That's the first reason. The second, I think I would have called out previously that our late-night operating hours, which are typically the delivery occasions, 11:00 P.M. onwards, those are increased and continuously increasing. Whether it was 11:00 to 1:00 earlier, now some of the stores going up to 2:00. Now even probably 10% to 15% of stores remaining open till 5:00 A.M. as well. That's the second where occasions are getting added, but they're getting added under delivery. That's the second reason of delivery mix look going better. The third was more structural post-COVID. A lot of our restaurants came in high streets. The mall development actually stopped immediately during the COVID. The high street, typically, the delivery mix is higher compared to the mall mix. That was the third reason. The fourth, the mall performance itself, the dining performance in the mall itself has been a struggle. The footfalls in the mall have been challenging. The mall typically is a dining portfolio for us. These are the four reasons where delivery mix has got improved vis-à-vis dining. Having said that, a lot of steps which we are taking is to try and get the dining footfalls back. The entire Epic Saver campaign, which we ran and invested a lot of gross margin, was entirely on dining and takeaway channel. The transaction improvement you are seeing, a lot of it has come from a dining and takeaway channel. Even as we go forward, just like we did in Pizza Hut, most of the campaigns which we ran, unlimited pizza Friday, whether it is buy one, get three, the four-course meal at 99, all of these to do with dining. I'm giving you examples of both KFC and Pizza Hut that how the idea is to focus and get the transactions back in dining. That was the first part. The second question was on KFC. If you can just repeat on KFC? Yeah. The second question was on that, you know, we are starting from plus 3. Should we assume that we start from plus 3 and forward depending on macro, your own initiatives? Is that appropriate? Yeah. Largely, yes, except for a small difference that a 3% on a Q2 base is a smaller base. That same 3% on a Diwali and a festive quarter could be 2.5% rather than 3%. That's the only small change. Yes, one should assume that we are probably starting 2.5% positive as we get into Q3. The third was on the gross margin value and the gross margin percentage. The kind of investments which we have done in H1 across both the brands, KFC and Pizza Hut, we have dropped roughly 100 basis points on KFC or invested 100 basis points on KFC on the Epic Saver campaign in H1. We have invested roughly 150 to 180 basis points in Pizza Hut for H1 on gross margins. Again, those are Juicy Delicious campaign, buy one, get three, unlimited pizza Friday, currently four-course meal at 99. Yes, this investment will continue. What could change is that if the particular promotion and offers are not working, the idea is how quickly we can move on to something next, which is we can try something out. The investment in the gross margins, we expect to remain at this level. Okay. Thank you for answering my questions. Wish you a good one. Wish you the same. Thank you, Harit. Thank you. The next question is from the line of Saurav Kunden from Goldman Sachs. Please go ahead. Thanks to Sanjay and Vijay. I just wanted to check on gross margins again. While you are investing in gross margins and doing innovations in both the formats, in this quarter after the GST cut, did you see any decrease in your input prices? Has that helped margins a little bit in any way now or going forward? Was that completely passed on to the consumers? Being a part of a QSR industry, first of all, there is no change for us in terms of the output tax rate, which continues to be at 5%. Yes, from our input prices, there is a very small marginal benefit, which we see, 0.5% or less. We have passed on to the customers, although we wouldn't have received the benefit immediately because we carry inventories. Yet, in good faith, we have passed on to the customers for both KFC and Pizza Hut. The way we have passed across is that rather than now trying to spread this 0.5% or so across all the product lines, it would be meaningless for the customers. We have tried to restrict this reduction, and not restrict in terms of the quantum, but this entire quantum, we have passed across the top 7 to 8, 10% lines so that those 7 to 10% lines see a meaningful reduction, which could be anywhere between 5% to 10%. This is done starting September 22. I think the idea there, Saurav, was the government has done something quite bold and imaginative. We have also got to respond to that move. Therefore, we passed this on. There are people within the industry who might have taken it across all products. In cases the impact would have been one rupee or two rupees on a particular product, it didn't make for us. We said, let the consumer see some material change. Actually, on our highest selling products, we took a material difference in our material reduction in our pricing. Yet kept the overall quantum to that 0.5% or so. Understood. Makes sense. Just one last question on Pizza Hut side. Assuming that this sort of lockdown or whatever the situation remains, the status quo remains, you are not in a position, the format is not in a position to fund any expansion as of now for you. Is it fair to say that you will bear that in stores if you? You are right. While we would have chosen a different language than what we use internally, internally, what we call is the strike rates for the payback periods. If the brand is overall in negative or just about break even, of course, the new stores would not be giving the desired paybacks. At Sapphire, they've always called out that finally, our expansion would be guided by the strike rates and the paybacks we get on the new store performance. While KFC, there is still a challenge on SSG, our new store performance has been pretty healthy and reasonable, and hence, we have continued with our expansion journey. On Pizza Hut, yes, there has been a struggle. On a calendar year, and with Yum, we work on a calendar year. Last year, we opened, last calendar year, we opened 20 or 20 stores. This year, we are so far negative one, and yes, unless we see a revival in the brand growth in terms of SSG and growth coming back, we don't see any meaningful additions to the count. Right. Thank you. Thank you, Saurav. Thank you. The next question, it's from the line of Devanshu Bansal from MK Global. Please go ahead. Yes. Hi, Sanjay. Vijay, greetings. Sir, I wanted to check. There have been multiple questions here. I wanted to check, these 17 days that have happened in this quarter, is it fair to assume the underlying trend in KFC is still flattish, or because of the pricing corrections that we have done in light of the GST cut, there is some pickup in, say, like-for-like comparison for these 17 days? Overall trend is flattish from an SSG point of view. Quarter One was flat. However, the SSTG was positive in Quarter One as well, low single digit. Quarter Two, while it's minus 3% because of the Navratra impact, ex-Navratra SSG is flattish. SSTG continues to remain again positive, low single digit. The trend is flattish. The SSTG is in definite improvement. We are at least in SSG flattish territory versus what we were at least negative a year ago or so. That's the positive. The price reduction is 0.5% or so, as we called out, spread across a few of our hero products, 5% to 10%. Quarter Two has only seen eight days or nine days of impact, and that too during Navratra. The 22nd is when the GST cuts came into effect. That's when the price reduction came into effect, and that's when the Navratra started as well. I think it's too short a period to say that this reduction has made any meaningful impact from a customer demand perspective or not. Now, when you look at the SSG last year, this time, the first 10 days of October, the first and second week of October, there was Navratra. The numbers are not really comparable. Let's give it a bit of more time before we comment that the trajectory has changed from flattish to positive. I understand, Vijay. My question was more since post-Navratra 17 days this year and last year. I get your point. I was just checking on that then. Sir, my second question is on Tamil Nadu Pizza Hut performance. You indicated that the trends are in double digit there. I wanted to check if this is largely because of same-store growth or there's a component of store additions in that market as well. There were store additions also there. Same-store sales growth was about mid-single digit. That's through store additions. It's in line with the rest of the country. The important part to look over here is the delta vis-à-vis the rest of the brand performance and the rest of the country. That's the mid-teens delta. Across all the three parameters, whether it is SSG, SSTG, or overall revenue growth, the delta is 15% or so or mid-teens levels. Okay. Lastly, a small follow-up here. From a margin perspective, is this better same-store sales growth giving you the desired operating leverage to offset the additional marketing spend? Are we still, on a year-over-year basis, seeing some dip in the Tamil Nadu market? The margins are still positive, at least in Tamil Nadu, vis-à-vis the brand showing negative performance in terms of the restaurant EBITDA. Whether they are at the desired levels, I would say no. We have called out this entire journey that this additional marketing investment backed by innovation has to be a two to three-year journey. It cannot be six months or nine months. Last year, I think we started on a positive note where we invested behind the brand for the nine months, and we saw a 17% uplift pan-India. Post that, Quarter Four last year, we stopped investing at least on mass media. While Sapphire continued to invest BTL, they did not give results. This year, at least starting April, we are investing mass media in Tamil Nadu, and Tamil Nadu is showing results. I think for us to reach the desired level of ADS, the investment has to continue for two more years at least. Understood. Lastly, a bookkeeping question, Vijay. This 97% of depreciation, is this a sustainable run rate for coming quarters? Because there is some debt, I just wanted to check. When you are looking at these depreciation numbers, it's post-IND AS 116 numbers. The underlying real depreciation will be significantly lower. Yes, when you look at even that number, we don't see this number materially altering. There are no big impacts, which I would say need to be carved out as we move forward. The number would keep increasing. You cannot really look at the absolute value because as we keep adding more stores, the number would keep increasing. There's always some impact where we take a call on store closure. Those are some small one-offs which can come. I won't see the number as materially off the mark from a trend perspective. Fair enough, Vijay and Sanjay. Thanks for taking the questions, sir. Thank you, Devanshu. Thank you. The next question is from the line of Tejesh from Awendis. Please go ahead. Hi. Thanks for the opportunity. Sanjay, KFC has seen now multiple deceleration and slow quarters. Our explanations have ranged from our readings have ranged from post-COVID high base to brand boycott in between too. Private final consumption also kind of slowing down. Now, given our parent, Yum!'s depth of experience, both in terms of scale and history, what's their current diagnosis of the sluggishness that we are seeing in this brand? How have global QSRs or this brand has historically emerged from such slowdowns? Yeah. Tejesh, I don't think Sapphire called out brand boycott in any of our investor presentations. You could go back and check. I don't think we've called this out. However, what you've been saying that we have in or the brand has seen now six to eight quarters of flat SSG or negative SSG is absolutely right. Like I said, it's a combination of two things. One is private discretionary spending has been muted. That's the reason why the government, despite strong GDP numbers, is still calling out very specifically that they need to do something to increase consumption spend. A combination of that plus increased competition within the entire food space, including QSR. I think that's the articulation. Plus, we've also expanded stores significantly. At one point in time, our growth rates, our SSG numbers were quite strong. If you look at three years, we have doubled the store count. I think it's a combination of all these factors. Having now said what is the way forward, firstly, I think India is a little unique because there's no other country in the world which has such a strong wedge population. Therefore, internally, we say that we have two tasks on KFC. One is indeed how do we grow frequency of consumption with KFC brand loyalists. Over a period of time, the big opportunity is how do we expand the consumer franchise for KFC. On the first part, which is increasing frequency, there are global models which are really around occasions of consumption and innovation. Around the part of increasing consumer penetration, there are a few markets like India. It's a matter of, in a sense, to some consumers, almost introducing the concept of fried chicken in a QSR format to them. All of this is not, we believe, possible to do. It will take a degree of focus, and it will take time. I think we are aligned between Yum! and us on what our journey is. It is starting to play out, but it's not a silver bullet. Once we get some tailwinds of consumption going, I think in general, we'll see that positively reflected on KFC also. Perfect. Thanks, Sanjay, for that detailed answer. Just one follow-up there. The way we have seen Tamil Nadu Pizza Hut as a very silver lining and gives us hope that it's just a matter of replicating that model. Are we doing any or are we seeing any KFC experiment at micro or micro market level, which gives us confidence at this stage that if we replicate it at pan-India, we'll have some better numbers there? There are several experiments being carried out on KFC, which give us optimism for the future. It's really too early to specifically call out in an investor presentation at this moment, Tejesh. Perfect. The last one, Sanjay, you also called out all the initiatives or interventions that government would have made in the last 15 months to revive consumption. In pockets, let's say, some of the retailers are seeing some increased footfall, at least to begin with. Are we seeing that in our formats, that at least conversions can still be there or low, but our footfall is improving? I mean, it's tough to make a judgment after just a couple of days. Like I said, when we are overlapping Navratra, the numbers at this moment from an SSG perspective are very fine. Let's wait till perhaps November and then December and see how things pan out. Very clear. That's all from my side. Devani, wishes to you and the team. I just want to make, you know, just for ample clarity, I just wanted to call out. See, the Tamil Nadu experiment gives us a way to take the brand forward. I mean, by no means are we trying to say that it is a solved problem in Tamil Nadu. Even there, and Vijay mentioned it in one of his answers previously, also saying that we have to keep at it for the next two, three years, even in Tamil Nadu to really get to double digit and then higher levels of profitability. We all seek some models that can give us this kind of growth. Certainly, there is a model to revive the brand. I just want to, but there is no silver bullet. It will still take persistent work, even in Tamil Nadu, to really bring the brand back to its glory days. Very clear. Thanks and all the best. That's it. I think that's the end of the question queue. Again, thank you very much. We've got 151 participants at the beginning of the call. I wasn't sure, given that it's the start of the Diwali weekend and it's a Friday. I'm just grateful to all of you who have been on the call. Happy Diwali. Spend time with the family. May all your wishes come true in the coming year. Bye. A very happy Diwali to all of you. Thank you so much. Thank you, sir. And bye. Thank you, Sapphire Foods India Ltd. That concludes this conference. Thank you for joining us. You may now disconnect your line.