Editor’s Note
Sapphire Foods, the operator of KFC and Pizza Hut in India and Sri Lanka, posted a 7% year-on-year revenue increase to ₹740 crore for Q2, reflecting a mixed performance. This summary highlights the key financial result.
Sapphire Foods India Limited, the operator of KFC and Pizza Hut restaurants in India and Sri Lanka, has reported a mixed performance for the second quarter, with consolidated revenue growing 7% year-on-year to ₹740.00 crores.
KFC, the company’s flagship brand, saw a 7% revenue growth. However, excluding the impact of Navratri, which shifted from Q3 last year to Q2 this year, KFC would have achieved double-digit growth. The brand maintained flat same-store sales growth (SSSG) excluding the Navratri impact, with positive transaction growth.
Pizza Hut faced headwinds with a 6% overall revenue decline. However, the brand showed promising results in Tamil Nadu, Sapphire’s exclusive territory, where it achieved double-digit growth. This success in Tamil Nadu provides a potential model for reviving the Pizza Hut brand across India.
Sri Lanka operations demonstrated strong performance, growing 18% in local currency terms. The country’s business has shown resilience and recovery following economic challenges two years ago.
Sapphire Foods added 19 KFC restaurants and 2 Pizza Hut outlets in India during the quarter. The company reached a significant milestone by inaugurating its 1000th restaurant, a KFC outlet in Gummidipoondi, Tamil Nadu.
Metric | Q2 | YoY Change
— | — | —
Consolidated Revenue | ₹740.00 | +7%
Restaurant EBITDA | ₹83.60 | -12%
Restaurant EBITDA Margin | 11.3% | -240 bps
Adjusted EBITDA | ₹45.00 | -24%
Adjusted EBITDA Margin | 6.1% | N/A
Consolidated PAT | (₹12.80) | N/A
*All financial figures in crores of Indian Rupees*
Sapphire Foods is focusing on driving penetration and frequency for the KFC brand. The company launched the ‘Taste the Epic’ campaign to popularize core buckets, offering 9 pieces for ₹299.00. For Pizza Hut, the company introduced innovations such as the Ultimate Cheese Pizza and Cheesy Pocket to satisfy customer demand for additional cheese.
While facing challenges in the current market environment, Sapphire Foods remains committed to its growth strategy. The company is optimistic about the potential for recovery, particularly given recent government initiatives such as GST reduction and income tax cuts, which may boost consumer spending.
Sanjay Purohit, Whole-time Director & Group CEO, commented.
The company acknowledges that reviving the Pizza Hut brand may require persistent efforts over the next 2-3 years, even in the successful Tamil Nadu market. Sapphire Foods plans to continue investing in marketing and innovation to drive growth across its brands.
As the company navigates through a challenging consumer environment, it remains focused on operational excellence and strategic expansion to capitalize on long-term growth opportunities in the Indian QSR market.
