Editor’s Note
This report outlines a potential consolidation in India’s quick-service restaurant sector, with two major franchise operators of global brands reportedly in merger talks. Such a move could significantly reshape the competitive landscape.
US-based KFC and Pizza Hut franchise operators Sapphire Foods and Devyani International are reportedly set to merge their businesses.
According to a CNBCTV18 report, Sapphire Foods is likely to merge into Devyani International, with Devyani remaining the listed entity. The deal aims to bring all KFC and Pizza Hut operations in India under a single umbrella.
Sapphire Foods, established in 2015, is a franchisee of Yum! Brands and operates 997 restaurants across India, Sri Lanka and the Maldives. Its portfolio includes 529 KFC outlets, 457 Pizza Hut restaurants and 11 Taco Bell outlets.
The company reported a consolidated net loss of Rs 12.78 crore in Q2 FY26, compared with a loss of Rs 6.24 crore in the same quarter last year. Revenue from restaurant operations rose 6.6% year-on-year to Rs 740.01 crore. Same-store sales growth (SSSG) for KFC and Pizza Hut remained largely in line with the previous quarter, though KFC was impacted by the shift of Navratri to Q2 FY26 from Q3 FY25.
Devyani International, meanwhile, posted a net loss of Rs 22 crore in the September quarter of FY25, compared with a marginal profit of Rs 0.02 crore in the corresponding period last year.
Shares of Sapphire Foods were down 2.42% at Rs 249.95 apiece on the BSE at 3:00 pm on Friday, while Devyani International shares were up by 1.24% at Rs 138.70 apiece.
