KFC franchisee returns to profit in the June quarter as affordable meal offerings attract first-time customers and drive higher footfall
Sapphire Foods, the operator of KFC and Pizza Hut restaurants in India and Sri Lanka, reported a 28 per cent year-on-year rise in consolidated net profit for the quarter ended 30 June 2026, aided by higher sales at KFC India and growing consumer response to its value-led menu strategy.
The company posted a consolidated net profit of Rs 12.7 crore in the June quarter, compared with Rs 1.8 crore in the corresponding period last year. Revenue from operations rose 8 per cent year-on-year to Rs 757.4 crore. KFC India remained the key growth driver, with same-store sales increasing 8 per cent and restaurant earnings before interest, taxes, depreciation and amortisation (Ebitda) margin expanding to 18.6 per cent.
Value Meals Drive Growth
Alongside its quarterly earnings, Sapphire Foods highlighted a long-term strategy focused on expanding its consumer base rather than increasing purchase frequency among existing customers. “At the core of future-proofing growth lies one fundamental belief: expanding consumer penetration by attracting new users,” the company said in its FY26 Annual Report.
The company estimates that around 40 million to 45 million consumers dine at KFC annually and expects that number to exceed 100 million over the next five years. To support this goal, Sapphire Foods has introduced market-specific value offerings. These include the Rs 99 Krisper Meal in North and West India, while southern markets are being served through an “abundant meal” platform tailored to local demand.
“This has driven new consumer walk-ins and contributed to 4% SSSG in the January–March 2026 quarter, the highest in 14 quarters,” Group Chief Executive Officer Sanjay Purohit said in his letter to shareholders.
Focus On Customer Expansion
The company said the value-led strategy translated into stronger customer traffic during the June quarter. KFC India recorded 12 per cent year-on-year transaction growth, while average daily sales increased 8 per cent. Sapphire Foods attributed the performance to affordable menu innovations, improved operational execution and a better mix of dine-in and takeaway orders.
“In KFC, we have sharpened our approach to this agenda through separate marketing and value interventions in evolving and more developed chicken eating markets & we are beginning to see encouraging results,” the company said.
The company also believes India’s organised chicken market offers significant room for expansion. According to Sapphire Foods, chicken and pizza together account for nearly 32 per cent of the organised quick-service restaurant (QSR) market, which it estimates will grow from Rs 499 billion in FY25 to Rs 1.5 trillion by FY30.
One of Yum Brands’ largest franchisees, Sapphire Foods operated 575 KFC restaurants and 341 Pizza Hut restaurants across India and Sri Lanka at the end of FY26, taking its total restaurant network to 1,052 outlets.
