Higher input costs and weak Pizza Hut performance drag earnings
Sapphire Foods India reported its strongest quarterly performance in 12 quarters on Tuesday (28 April 2026), with consolidated revenue for Q4 FY26 rising 11 per cent year-on-year to Rs 789.8 crore, led by a recovery in its KFC India business. Despite the improved operating performance, the company remained in the red, posting a consolidated net loss (profit after tax, Pat) of Rs 12.6 crore, compared with a net profit of Rs 2 crore in Q4 FY25.
For the full financial year FY26, revenue increased 8 per cent year-on-year to Rs 3,115.9 crore. However, the company swung to a net loss of Rs 32 crore from a profit of Rs 16.7 crore in FY25. Adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) declined 9 per cent to Rs 238.2 crore, with margins contracting by 150 basis points to 7.6 per cent.
KFC India Leads
KFC India emerged as the primary growth driver during the quarter, with revenue rising 15 per cent, the highest in eight quarters, to Rs 549.5 crore. Same-store sales growth (SSSG) stood at 4 per cent, or 6 per cent excluding the impact of Chaitra Navratri, marking the strongest performance in 14 quarters.
Restaurant-level Ebitda margin improved by 110 basis points to 16.8 per cent, supported by better gross margins and targeted consumer acquisition initiatives. These included value-driven offerings such as the Rs 99 Chicken Krisper Burger Meal in northern and western markets, along with buy-one-get-one bucket deals in southern markets.
Pizza Hut Continues To Lag
Pizza Hut India remained a drag on overall performance. Quarterly revenue declined 6 per cent to Rs 117.4 crore, while SSSG fell 7 per cent. Restaurant Ebitda margin deteriorated further to negative 6.0 per cent, down 140 basis points year-on-year. For the full year, the brand reported a restaurant Ebitda margin of negative 3.3 per cent, a decline of 570 basis points.
Sri Lanka, Exceptional Items
The Sri Lanka business recorded its sixth consecutive quarter of double-digit SSSG at 11 per cent in local currency terms, with restaurant sales rising 15 per cent to LKR 422.1 crore.
The bottom line was also impacted by exceptional items worth Rs 12.8 crore in Q4, linked to labour code changes and employee stock ownership plan (ESOP) modification costs associated with the proposed merger with Devyani International. As of 31 March 2026, the company operated 1,052 restaurants.
The stock was trading at Rs 174.50 on the National Stock Exchange (NSE), down 0.81 per cent during the day, and has declined nearly 46 per cent over the past year.
