More Stories

Informist, Wednesday, Jul. 22, 2026

By Upasika Singhal

MUMBAI – Sapphire Foods India Ltd. is expected to report a net profit for the June quarter, a turnaround from the loss it had reported in the year-ago quarter. Of the company's businesses, KFC is expected to continue delivering healthy same-store sales growth and store expansion while Pizza Hut is likely to remain a drag on the earnings.

The company is expected to report a consolidated net profit of INR 48 million for the June quarter against a loss of almost INR 18 million in the year-ago quarter, according to the average of estimates from eight brokerages. Sapphire Foods had reported a net loss of INR 254 million for the March quarter. The improvement in the sequential performance is due to the low base last quarter caused by the spring ‘Navratri' celebrations in March, brokerages said. During this festival, many consumers avoid eating meat which results in a drop in sales for companies such as Sapphire Foods.

The highest estimate for the company's consolidated net profit is INR 119 million from Nuvama Wealth Management Ltd. and the lowest estimate is INR 8 million from Kotak Securities Ltd. Anand Rathi Share and Stock Brokers Ltd. expects the company to incur a loss of INR 9 million.

In the June quarter, the company had offered high value promotions, commercial liquefied petroleum gas costs had risen sharply, and operations were disrupted due to the lack of the gas, Anand Rathi said. Due to this, the company shifted to using piped natural gas and electricity, the brokerage noted and added these factors would result in the company making a loss for the quarter. These factors will also weigh on margins, Anand Rathi said.

Sapphire Foods' consolidated revenues are expected to be INR 8.8 billion for the June quarter, up almost 13% from INR 7.9 billion on year, according to the estimates. The highest estimate is INR 8.9 billion from Bank of America Securities and the lowest estimate is INR 8.6 billion from Anand Rathi.

The quick-service restaurant operator is expected to report consolidated earnings before interest, taxes, depreciation, and amortisation of INR 1.2 billion for the June quarter, according to the average of seven estimates. The highest estimate for EBITDA is INR 1.5 billion from Nuvama and the lowest is INR 700 million from Kotak. The company's EBITDA margin is expected to increase 170 basis points to over 16% on account of operating leverage on better KFC performance, Emkay Global Financial Services Ltd. said.

Sapphire's expected revenue growth is attributed mostly to the merger with Devyani International Ltd., KFC's strong home-delivery demand, and the company's steady growth in Sri Lanka. However, food inflation could weigh on the fast-food chains' gross margin, which could be partially offset by price hikes led by better same-store sales growth momentum, Elara said.

Same-store sales growth is a financial metric which is based on the percentage change in total sales for stores that have been operating for more than one year. This is used to evaluate the performance of retail businesses.

KFC is also expected to aggressively expand its store presence, with four brokerages estimating KFC has opened at least 15 new stores in the June quarter. Emkay Global expects KFC to open around 18 stores in the quarter. Brokerages also expect KFC to maintain its same-store sales growth momentum. While Emkay expects KFC's same-store sales growth to expand 6% this quarter, Anand Rathi expects a 2-5% growth.

Pizza Hut, however, is expected to remain a drag on Sapphire's performance in the June quarter. Pizza Hut continues to face a challenging demand environment, with flat same-store sales growth, Kotak and Nuvama said. Most brokerages do not expect Pizza Hut to expand its store presence

in the June quarter. However, Motilal Oswal Financial Services Ltd. expects the addition of at least five new stores in the quarter.

KFC is also expected to power the most brand level contributions, while Pizza Hut faces adverse operating leverage, Kotak said. The chicken chain's margins are expected to go up almost 16%, while Pizza Hut's margins are expected to fall 3%, Kotak added. Gross margins will also be weighed down by an increase in employee costs and LPG costs, PhillipCapital said.

Daily per store sales growth is expected to remain flat. KFC is expected to report INR 1,16,000 in average daily sales per store (flat on year), while Pizza Hut is expected to report INR 43,000 in average daily sales per store (down 2.5% on year), Kotak said. Similarly, PhillipCapital expects KFC to report flat per store average daily sales and Pizza Hut to report 1% lower per store average daily sales.

Sapphire Foods is one of the two largest franchisees of Yum! Brands, the parent company of KFC, Pizza Hut, and Taco Bell. The company runs over 800 branches of these brands across India, Sri Lanka, and the Maldives. Sapphire will soon merge with Devyani International – another large franchisee of Yum! - to bring the whole franchise network under one umbrella. The consolidation will be a share-swap merger. Sapphire Foods will detail its June quarter earnings Friday.

All eight research reports on the company available with Informist have a "buy" recommendation on the stock with an average target price of INR 272, which is 50% higher than closing price Wednesday. The stock price has risen over 3% since the company announced its earnings for the March quarter. Wednesday, the share closed at INR 180.45 on the National Stock Exchange, up just over 1%.

Following are the Apr-Jun earnings estimates, in INR million, for Sapphire Foods from eight brokerages in descending order of net profit estimates:

End

Edited by Pankaj Aher

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.