Financial Performance Overview

Sapphire Foods delivered its best quarterly performance in 16 quarters with strong revenue growth and profitability improvements across key metrics.

Q2 FY27 Consolidated Financial Highlights:

  • Restaurant Sales: ₹8,853 million, up 20% YoY from ₹7,401 million in Q2 FY26
  • Adjusted EBITDA: ₹624 million, up 39% YoY from ₹450 million in Q2 FY26
  • Adjusted EBITDA Margin: 7.1%, expanded by 100 bps from 6.1% in Q2 FY26
  • EBITDA: ₹1,286 million, up 21% YoY from ₹1,062 million in Q2 FY26
  • EBITDA Margin: 14.5%, expanded by 20 bps from 14.3% in Q2 FY26
  • Adjusted PBT: ₹120 million (1.4% margin) compared to -₹43 million (-0.6% margin) in Q2 FY26
  • PBT: ₹6 million (-0.1% margin) compared to -₹166 million (-2.2% margin) in Q2 FY26
  • Gross Margin: 68.5% compared to 68.0% in Q2 FY26

6M FY27 Consolidated Financial Highlights:

  • Restaurant Sales: ₹17,736 million, up 17% YoY from ₹15,149 million in 6M FY26
  • Adjusted EBITDA: ₹1,373 million, up 38% YoY from ₹998 million in 6M FY26
  • Adjusted EBITDA Margin: 7.7%, expanded by 110 bps from 6.6% in 6M FY26
  • EBITDA: ₹2,692 million, up 23% YoY from ₹2,196 million in 6M FY26
  • EBITDA Margin: 15.2%, expanded by 70 bps from 14.5% in 6M FY26
  • Adjusted PBT: ₹393 million (2.2% margin) compared to ₹40 million (0.3% margin) in 6M FY26
  • PBT: ₹156 million (0.9% margin) compared to -₹184 million (-1.2% margin) in 6M FY26

Restaurant Expansion

The company added 16 net new restaurants during Q2 FY27 (15 KFC restaurants and 1 Pizza Hut in Sri Lanka). Total restaurant count reached 1,086 as of September 30, 2026, comprising:

  • 606 KFC restaurants in India
  • 342 Pizza Hut restaurants in India
  • 127 Pizza Hut restaurants in Sri Lanka
  • 11 Taco Bell restaurants in Sri Lanka

Brand Performance Breakdown

KFC India Performance:

  • Delivered highest revenue growth of 26% in last 16 quarters
  • Same Store Sales Growth (SSSG) of 14% (close to double-digit after factoring timing shift of Navratri to Q3 instead of Q2 last year)
  • Restaurant EBITDA margin at 14.5%, expanded by 70 bps YoY despite raw material & energy cost inflation and higher marketing investments
  • Dine-In & Take Away SSSG higher than delivery SSSG backed by double-digit transaction growth
  • Success driven by 2-pronged consumer recruitment strategy: disruptive Every Day Value of ₹99 Chicken Krisper Burger Meal (modified as ₹149 Thalaiva Meal for TN market) and Abundant Value on select days (BOGO on Chicken Buckets)

Pizza Hut India Performance:

  • Revenue growth of 7% with highest SSSG (+5%) in last 7 quarters
  • Double-digit Same Store Transaction Growth (SSTG) including positive SSTG in Dine In & Take Away
  • Driven by strong value offers like ₹99 4-course meal and Buy 1 Get 1
  • Restaurant EBITDA was negative at -2.8% (declined by 100 bps YoY) impacted significantly by higher energy costs

Sri Lanka Business Performance:

  • Revenue grew by 9% in LKR terms with SSSG of 5% in LKR
  • Restaurant EBITDA remained sequentially steady at 12.5% (improved by 290 bps YoY) despite impact of very high inflation on wages and energy
  • Absolute Restaurant EBITDA decreased by 11% in LKR terms (decreased by 12% in INR terms)

Balance Sheet Position (as of September 30, 2026)

Assets:

  • Total Assets: ₹34,387.51 million
  • Fixed assets (excluding goodwill): ₹12,907.30 million
  • Right of use assets: ₹12,467.62 million
  • Goodwill: ₹1,582.84 million
  • Inventories: ₹1,206.12 million
  • Trade receivables: ₹435.29 million
  • Cash, bank balances, Investment in MF's & FD: ₹2,914.07 million
  • Other current and non-current assets: ₹2,874.27 million

Liabilities and Equity:

  • Total Liabilities: ₹20,392.63 million
  • Lease Liabilities: ₹14,809.85 million
  • Borrowings: ₹358.83 million
  • Trade Payables: ₹3,327.08 million
  • Other Non-current and Current Liabilities: ₹1,896.87 million
  • Total Net Worth: ₹13,994.88 million
  • Equity Share Capital: ₹642.77 million
  • Other Equity: ₹13,373.29 million
  • Non-controlling interests: -₹21.18 million

Operational and Strategic Highlights

KFC Brand Initiatives:

  • Digital Kiosks rolled out across 80%+ of restaurants
  • Total App downloads reached 75 million+ with Monthly Active Users of 2.4 million
  • Continued focus on frictionless consumer experience and own delivery growth

Pizza Hut Brand Initiatives:

  • Total App Downloads reached 29 million+ with Monthly Active Users of 0.8 million+
  • Focus on taste superiority through pizza & sides innovation, differentiated dine-in experience, and hot n fresh delivery experience
  • Google, Swiggy & Zomato average ratings across the network >= 4.0
  • Cautious store expansion with ~1000/1200 sqft. stores (3 restaurants added in CY26)

Note: Adjusted EBITDA and Adjusted PBT are before Ind-AS 116 adjustments. Adj. PBT & PBT of Q2 FY27, 6M FY27 and FY26 are before the exceptional items of ₹13 million, ₹13 million and ₹240 million respectively.