Sapphire Foods Reports Strong Q2 Growth as Consolidated Restaurant Sales Rise 20%

Sapphire Foods India Limited reported its strongest quarterly revenue growth since the Covid era, with consolidated restaurant sales rising 20% year-on-year for the quarter ended September 30, 2026. However, despite the operational performance, the company's stock traded lower on Thursday.

NEW DELHI — Sapphire Foods India Limited on Thursday released its financial results for the quarter ended September 30, 2026 (Q2 FY27), reporting its strongest quarterly revenue growth since the Covid era.

Consolidated restaurant sales rose 20 per cent year-on-year to ₹8,853 million. The company, which operates KFC, Pizza Hut, and Taco Bell outlets across India and Sri Lanka, stated that it was the best quarter for both revenue and adjusted EBITDA growth in the last 16 quarters.

Adjusted EBITDA surged 39 per cent to ₹624 million, with margins expanding 100 basis points to 7.1 per cent. Consolidated EBITDA came in at ₹1,286 million, up 21 per cent year-on-year, at a margin of 14.5 per cent. The adjusted profit before tax turned positive at ₹120 million against a loss of ₹43 million in Q2 FY26, though reported PBT remained marginally negative at -₹6 million.

KFC India emerged as the standout performer for the company, posting 26 per cent revenue growth—its highest in 16 quarters. This was driven by a same-store sales growth (SSSG) of 14 per cent and double-digit transaction growth. The brand’s restaurant EBITDA margin improved 70 basis points to 14.5 per cent, despite raw material and energy cost inflation. KFC’s store count rose to 606 from 529 a year earlier.

Meanwhile, Pizza Hut India delivered 7 per cent revenue growth with SSSG of 5 per cent, the highest in seven quarters, aided by value offers including a ₹99 four-course meal and buy-one-get-one deals. However, restaurant EBITDA for Pizza Hut remained in negative territory at -2.8 per cent, worsening by 100 basis points year-on-year due to elevated energy costs.

In the Sri Lanka business, revenue grew 9 per cent in local currency terms, with SSSG at 5 per cent. Restaurant EBITDA margin in the region declined 290 basis points to 12.5 per cent, pressured by wage and energy inflation. Total restaurant count across all operations stood at 1,086 as of September 30.

Despite the strong operational print, the company's stock traded lower, down 0.58 per cent at ₹191.85 on the NSE on Thursday afternoon. This extended a steep decline for the shares, which are down nearly 35 per cent over the past year from a 52-week high of ₹310.50.

"Sapphire Foods has demonstrated solid operational resilience, particularly driven by strong performance in its KFC outlets and double-digit transaction growth. However, the market's reaction—with the stock trading lower despite positive revenue and EBITDA improvements—highlights a cautious investor sentiment. Margin pressures in specific segments like Pizza Hut and the Sri Lanka business due to energy and wage inflation remain key areas for management to address as they scale store counts." — Dr. Shishir Gupta, Founder & CEO, StartupLanes