Sapphire Foods India Limited (SAPPHIRE)
₹197.15 +0.41% last close, 16 Oct
Q2 FY27 results
📅 Next results: 22 Oct 2026 (board meeting)Sapphire Foods India Limited's board meets on 22 Oct 2026 to consider its Q2 FY27 results (July-September 2026).
In its latest reported quarter, Q1 FY27, Sapphire Foods' revenue was ₹891 Cr (+14.7% year on year, +12.5% on the previous quarter), and net profit ₹14.0 Cr (against a loss a year earlier); the operating margin was 15.7%.
| Q1 FY27 (₹ Cr) | Value | YoY vs Q1 FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹891 | +14.7% | +12.5% |
| Operating profit | ₹140 | +23.9% | +12.3% |
| Net profit | ₹14.0 | from loss | from loss |
| EPS (₹) | 0.44 | from loss | from loss |
| Operating margin | 15.7% | — | — |
SAPPHIRE delivery percentage
NSE end-of-day data for
On Fri, 16 Oct 2026, 45.58% of the SAPPHIRE shares traded on NSE were taken to delivery, against the stock's own 20-session average of 48.12%. That is close to its usual level. Volume was 0.2 times its average, well below normal.
Delivery in the last 5 sessions: 55.3% · 72.5% · 59.2% · 46.8% · 45.6%
A description of what the exchange published, not a recommendation. Names such as "accumulation" or "long buildup" label a pattern in the numbers. How delivery is analysed
📢 Recent Corporate Announcements
ICRA Limited has upgraded Sapphire Foods India's long-term credit rating to [ICRA]A+ from [ICRA]A, and short-term rating to [ICRA]A1 from [ICRA]A2+. The rating action covers total bank facilities of Rs 200.00 crore. Both ratings remain on 'Watch with Developing Implications'. The rated bank limits represent approximately 6.2% of the company's TTM revenue of Rs 3,239 crore.
- Long-term rating upgraded from [ICRA]A to [ICRA]A+ across bank facilities
- Short-term rating upgraded from [ICRA]A2+ to [ICRA]A1
- Total bank facilities rated stand at Rs 200.00 crore
- Ratings continue on 'Watch with Developing Implications'
- Breakdown includes Rs 102.02 crore term loan and Rs 42.00 crore working capital facilities
Sapphire Foods India Limited has received a show cause notice amounting to INR 21.45 million (~₹2.15 crore) from the Deputy Commissioner of State Tax, Ghaziabad Sector-4, Uttar Pradesh. The notice, issued under Section 73 of the Uttar Pradesh GST Act 2017, alleges short payment of GST for the period April 2022 to March 2023. The demanded amount represents less than 0.1% of the company's TTM revenue of ₹3,239 crore. Sapphire Foods stated that the claim is not maintainable, poses no material financial or operational impact, and that it is in the process of responding to the notice.
- Show cause notice received under Section 73 of UP GST Act 2017 on 28th September 2026
- Alleged short payment of GST amounting to INR 21.45 million (₹2.15 crore)
- Audit period covers April 2022 to March 2023
- Demand represents ~0.07% of company's TTM revenue of ₹3,239 crore
- Company confirmed no material impact on operations or financials and will contest the claim
Sapphire Foods India Limited received a show cause notice dated September 26, 2026, from the Assistant Commissioner of State Tax, Vadodara, Gujarat. The notice involves an alleged incorrect availment and utilization of input tax credit (ITC) amounting to INR 14.03 million (approx. ₹1.40 crore) for FY23 (April 2022 to March 2023). Relative to the company's TTM revenue of ₹3,239 crore, the amount is immaterial (under 0.05%). The company stated the claim is not maintainable, anticipates no operational impact, and is preparing a formal response.
- Show cause notice issued under Section 73 of Gujarat GST Act 2017 for INR 14.03 million
- Notice received on September 26, 2026, covering the period April 2022 to March 2023
- Allegation pertains to incorrect availment and utilization of input tax credit (ITC)
- Company confirmed the notice has no material operational or financial impact
Sapphire Foods India Limited received a Show Cause Notice dated September 25, 2026, from the Deputy Commissioner DGSTO-4, Bengaluru, Karnataka. The notice demands INR 199.90 million (₹19.99 crore) under Section 73 of the Karnataka GST Act 2017 for the period April 2022 to March 2023. The demand pertains to alleged incorrect availment and utilization of input tax credit (ITC) and short payment of tax. The company stated the claim is not maintainable, anticipates no material impact, and plans to file a response.
- Received Show Cause Notice under Section 73 of Karnataka GST Act 2017 dated September 25, 2026
- Demand amount stands at INR 199.90 million (approx. ₹19.99 crore)
- Pertains to scrutiny of GST returns for FY23 (April 2022 to March 2023)
- Allegations cite incorrect availment/utilization of ITC and short payment of tax
- Company states the claim is not maintainable and reports no material operational/financial impact
Sapphire Foods India Limited has received a show cause notice from the Deputy Commissioner (CT), Chennai, Tamil Nadu, amounting to INR 214.65 million (~₹21.47 crore). The notice, issued under Section 73 of the Tamil Nadu SGST Act 2017 for FY 2022-23, alleges inadvertent availment and utilization of ITC alongside short payment of interest and tax. The disputed amount represents approximately 0.66% of the company's TTM revenue of ₹3,239 crore. Sapphire Foods stated that the claim is not maintainable, expects no material operational impact, and is preparing a formal response.
- Received a show cause notice of INR 214.65 million (~₹21.47 crore) on September 21, 2026
- Notice issued under Section 73 of Tamil Nadu SGST Act 2017 for the period April 2022 to March 2023
- Allegations pertain to inadvertent availment and utilization of ITC and short payment of interest and tax
- Notice amount represents approximately 0.66% of TTM revenue (₹3,239 crore)
- Company states the claim is not maintainable and foresees no material financial or operational impact
Sapphire Foods India received a show cause notice (SCN) dated September 21, 2026, from the Deputy Commissioner (CT), Chennai, Tamil Nadu, under Section 73 of the Tamil Nadu SGST Act 2017. The notice claims ₹5,168.38 million (~₹516.84 crore) for FY 2023-24 alleging inadvertent availment/utilization of input tax credit (ITC) and short payment of tax. The demanded sum represents approximately 16% of the company's TTM revenue (₹3,239 crore). The company stated that the claim has computational errors, is not maintainable, and will take steps to respond.
- Show cause notice received for an aggregate amount of INR 5,168.38 million (~₹516.84 crore)
- Relates to the period April 2023 to March 2024 under Section 73 of Tamil Nadu SGST Act 2017
- Demand value is ~16% of Sapphire's TTM revenue of ₹3,239 crore
- Notice received on September 21, 2026, alleging ITC discrepancies and short tax payment
- Management states the claim has computational errors and is not legally maintainable
Sapphire Foods India Limited, alongside Devyani International Limited, has filed a joint application with the Competition Commission of India (CCI) under the Competition Act, 2002. This filing represents a key regulatory approval step for the proposed merger of Sapphire Foods into Devyani International, following Board approval on August 26, 2026. Sapphire Foods holds a market capitalization of ₹7,254 crore and generated TTM revenue of ₹3,239 crore. The transaction unites two of the primary Yum! Brands franchisees in India under a consolidated entity, pending regulatory and statutory clearances.
- Joint application filed with the Competition Commission of India under the Competition Act, 2002
- Scheme involves the proposed merger of Sapphire Foods with and into Devyani International Limited
- Follows earlier Board approval of the Amended Scheme of Arrangement on August 26, 2026
- Filing forms a mandatory part of the regulatory approval process pursuant to Sections 230 to 232 of the Companies Act, 2013
Sapphire Foods India Limited approved revisions to its Scheme of Arrangement for amalgamation into Devyani International Limited on August 26, 2026. The 18.5% secondary share sale agreement between promoter SFML and Arctic International was mutually terminated and removed as a condition precedent to the merger. The swap ratio remains unchanged at 177 equity shares of Devyani (FV Rs 1) for every 100 equity shares of Sapphire Foods (FV Rs 2). The amalgamation process will proceed in the ordinary course subject to requisite statutory and regulatory approvals.
- Share exchange ratio remains unchanged at 177 shares of Devyani International for every 100 shares of Sapphire Foods
- Share purchase agreement for 18.5% stake sale by promoter SFML to Arctic International terminated by mutual agreement
- Removal of secondary sale as a condition precedent simplifies the closing conditions for the merger
- SFML will now directly receive shares of Devyani International in accordance with the Scheme
Sapphire Foods India announced that its Board has approved a revised Scheme of Arrangement for its merger into Devyani International Limited after the termination of the share purchase agreement between promoter SFML and Arctic International. The transfer of an ~18.5% stake by SFML to Arctic was previously a condition precedent for the Scheme's effectiveness. With the secondary sale terminated by mutual consent, this condition has been removed, streamlining the merger process. The share swap ratio remains unchanged at 177 equity shares of Devyani (FV ₹1) for every 100 shares of Sapphire Foods (FV ₹2).
- Share swap ratio stands unchanged at 177 Devyani equity shares for every 100 Sapphire Foods equity shares.
- Condition precedent requiring an 18.5% secondary stake sale by promoter SFML to Arctic International has been removed.
- Promoter SFML will now receive Devyani International shares under the Scheme alongside all other shareholders.
- Board approved the revised Scheme of Arrangement and amended Merger Framework Agreement on August 26, 2026.
Sapphire Foods India has received a favorable order from the Income Tax Appellate Tribunal (ITAT) on 12th August 2026 (received 13th August 2026). The ITAT dismissed the Income Tax Department's appeal and upheld the earlier favorable order passed by CIT(A) Ranchi. The dispute pertained to Gamma Pizzakraft Lanka (Private) Limited, the company's wholly owned subsidiary in Sri Lanka. While the exact tax demand amount was not disclosed, this dismissal resolves a tax litigation in the company's favor.
- ITAT dismissed the Income Tax Department's appeal on 12th August 2026 (received 13th August 2026)
- Upheld the earlier favorable order passed by CIT(A), Ranchi originally reported on 2nd September 2025
- Pertains to wholly owned subsidiary Gamma Pizzakraft Lanka (Private) Limited
- Total disputed tax amount was not disclosed in the filing
Sapphire Foods reported a 15% YoY growth in restaurant sales to ₹888.2 Cr for Q1 FY27, supported by 22 net store additions. Consolidated EBITDA margins expanded by 120 bps to 15.8%, driven by a recovery in KFC India's Average Daily Sales (ADS) to ₹1.18 lakh. However, Pizza Hut India remains a drag on profitability with a negative restaurant EBITDA of -3.6%. The company is aggressively optimizing unit economics by reducing new restaurant sizes by approximately 45% compared to 2019 levels.
- Total restaurant count reached 1,074 as of June 30, 2026, with 22 net additions during the quarter.
- KFC India restaurant EBITDA stood at 16.9% with ADS improving to ₹1.18 lakh from ₹1.10 lakh in FY26.
- Pizza Hut India reported a negative restaurant EBITDA of -3.6%, despite adding 5 net stores in Q1.
- Consolidated EBITDA grew 24% YoY to ₹140.6 Cr, while Adjusted PBT rose 229% to ₹27.3 Cr.
- Average restaurant size for KFC and Pizza Hut has been reduced by ~45% to ~1,500 and ~1,200 sq. ft. respectively to optimize costs.
Sapphire Foods reported a strong Q1 FY27 with consolidated revenue reaching ₹888 crore, a 15% YoY increase. Adjusted EBITDA grew significantly by 37% to ₹75 crore, marking the best performance in 15 quarters. Growth was supported by positive Same-Store Sales Growth (SSSG) across all segments: KFC India (5%), Pizza Hut India (1%), and Sri Lanka (9%). While KFC margins remained robust at 16.9%, Pizza Hut India reported a restaurant EBITDA loss of 3.6% due to higher energy costs and pricing pressures.
- Consolidated revenue grew 15% YoY to ₹888 crore, the best in 11 quarters.
- Adjusted EBITDA increased 37% YoY to ₹75 crore with an 8.4% margin.
- KFC India delivered 5% SSSG and added 16 new stores, reaching a 16.9% restaurant EBITDA margin.
- Pizza Hut India returned to positive SSSG of 1% after five quarters of decline.
- Total restaurant count reached 1,074 as of June 30, 2026, with 22 net additions in the quarter.
Sapphire Foods has published the audio recording of its Q1 FY27 earnings call held on July 24, 2026. This follows a period where the company has faced profitability challenges, reporting a net loss of ‑₹12.62 crore in the preceding quarter (Mar 2026). The call likely addresses the company's strategy to counter negative Same Store Sales Growth (SSSG), which was ‑4% for KFC India in recent periods. Investors can access the recording on the company's website to evaluate management's commentary on store expansion and margin recovery.
- Audio recording for the quarter ended June 30, 2026 (Q1 FY27) is now publicly available.
- Company is managing a TTM revenue base of ‑₹3,125 crore with a TTM PAT of ‑₹32 crore.
- KFC Average Daily Sales (ADS) declined to ‑₹114 thousand in FY25 from ‑₹125 thousand in FY24.
- The company added 91 stores in FY25, crossing the 500 KFC restaurant milestone.
- Management previously noted inflationary pressures increasing food costs by over 11%.
Sapphire Foods reported a strong Q1 FY27 with revenue reaching ₹888.2 Cr, a 15% YoY increase, marking its best growth in 11 quarters. The company achieved a turnaround in profitability with a consolidated PAT of ₹14.02 Cr, compared to a loss of ₹1.74 Cr in the same quarter last year. Performance was bolstered by positive Same Store Sales Growth (SSSG) across all segments, including a recovery in Pizza Hut India (+1%) after five quarters of decline. The company added 22 net restaurants during the quarter, bringing its total footprint to 1,074 outlets.
- Revenue grew 15% YoY to ₹888.2 Cr, the highest growth rate achieved in the last 11 quarters.
- Adjusted EBITDA increased 37% YoY to ₹74.9 Cr, with margins expanding by 130 bps to 8.4%.
- KFC India delivered 5% SSSG, while Pizza Hut India returned to positive SSSG of 1% after five quarters.
- Net addition of 22 restaurants in Q1 FY27 (16 KFC, 5 Pizza Hut India, 1 Pizza Hut Sri Lanka).
- Consolidated PAT stood at ₹14.02 Cr, a significant improvement from the ₹1.74 Cr loss in Q1 FY26.
Sapphire Foods reported a strong Q1 FY27 with consolidated revenue growing 15% YoY to ₹888.2 Cr, its best performance in 11 quarters. Adjusted EBITDA rose 37% YoY to ₹74.9 Cr, with margins expanding by 130 bps to 8.4% due to positive SSSG across all brands. The company turned profitable at the PAT level, reporting ₹14.02 Cr compared to a loss of ₹1.74 Cr in Q1 FY26. KFC remains the growth engine with 17% revenue growth and 5% SSSG, while Pizza Hut India returned to positive SSSG (+1%) after five quarters.
- Consolidated Revenue reached ₹8,882 Mn, representing a 15% YoY growth.
- Adjusted EBITDA grew 37% YoY to ₹749 Mn, with margins improving to 8.4%.
- KFC India delivered 5% SSSG and maintained a strong Restaurant EBITDA margin of 16.9%.
- Pizza Hut India achieved positive SSSG of 1% after 5 quarters of decline.
- Net addition of 22 restaurants in Q1 FY27, taking the total store count to 1,074.
Financial Performance
Revenue Growth by Segment
Consolidated revenue from operations grew 11.09% YoY to INR 28,818.64 million. The KFC segment delivered a robust 11% revenue growth reaching INR 19,039 million, while the Sri Lanka business saw a 24% growth in INR terms (14% in LKR terms).
Geographic Revenue Split
India operations (standalone) contributed INR 24,838.82 million, representing approximately 85.1% of total consolidated income. International operations, primarily Sri Lanka, contributed the remaining 14.9% (approximately INR 4,351.97 million).
Profitability Margins
Gross margins remained stable at 68.2% in FY25. However, Net Profit Margin significantly declined from 2.0% in FY24 to 0.6% in FY25 due to higher operating expenses and negative operating leverage in the India business.
EBITDA Margin
KFC Restaurant EBITDA margin declined by 240 bps to 17.3% (INR 3,299 million) from 19.7% in the previous year. Consolidated operating margins moderated to 17.8% in FY24 and faced further pressure in FY25 due to a 4% decline in Same Store Sales Growth (SSSG) in India.
Capital Expenditure
Property, Plant and Equipment increased by 5.8% YoY to INR 10,185.36 million. The company added 91 new restaurants during FY25 and plans to incur sizeable capex over the medium term to fund its aggressive store expansion policy.
Credit Rating & Borrowing
The company maintains an adequate liquidity position with cash and bank balances of INR 2,648.27 million (up 24.9%). Borrowings were reduced by 28.5% to INR 198.61 million. Interest Service Coverage Ratio stands at a strong 177.71.
Operational Drivers
Raw Materials
Food ingredients and packaging materials represent the primary raw materials, with the total cost of materials consumed amounting to INR 9,068.44 million, which is 31.47% of total revenue.
Capacity Expansion
The company achieved a milestone of crossing 500 KFC restaurants in FY25, adding 73 KFC stores during the year. Total restaurant additions across all brands reached 91 for the financial year.
Raw Material Costs
Raw material costs as a percentage of revenue increased slightly from 31.26% in FY24 to 31.47% in FY25, reflecting a YoY cost increase of 11.83% in absolute terms to INR 9,068.44 million.
Manufacturing Efficiency
Efficiency is measured by Average Daily Sales (ADS) per restaurant, which for KFC stood at INR 114 thousand in FY25, down from INR 125 thousand in FY24 due to muted consumer demand.
Logistics & Distribution
Delivery sales as a percentage of KFC restaurant sales increased to 41.5% in FY25 from 38.0% in FY24, indicating a higher reliance on delivery logistics which contributed to margin compression.
Strategic Growth
Expected Growth Rate
11.09%
Growth Strategy
Growth will be driven by the rapid expansion of the restaurant network (adding 91 stores in FY25), focusing on smaller-sized omni-channel restaurant models to optimize costs, and leveraging digital transformation to increase customer engagement. The company also intends to pursue inorganic growth opportunities and drive margins through operating leverage as store maturity increases.
Products & Services
Quick Service Restaurant (QSR) products including fried chicken, burgers, and sides (KFC) and pizzas and related Italian-American cuisine (Pizza Hut).
Brand Portfolio
KFC, Pizza Hut, and Sri Lanka operations (Gamma Island Food).
New Products/Services
Continuous investment in menu innovation is mentioned as a key element of growth, though specific new product revenue contributions are not quantified.
Market Expansion
The company is targeting multi-decade growth in the Indian QSR sector by doubling its KFC store count over the last 3 years and expanding its footprint in Sri Lanka.
Market Share & Ranking
Sapphire KFC is recognized for delivering one of the highest restaurant margins in the Indian QSR industry.
Strategic Alliances
Franchise partnership with Yum! Brands for KFC and Pizza Hut; notable investors include Samara Capital and Creador.
External Factors
Industry Trends
The QSR industry is seeing a shift toward digital penetration and omni-channel strategies. Delivery mix is rising (now 41.5% for KFC), and there is a trend toward smaller, more efficient store formats to counter high rental costs.
Competitive Landscape
Faces intense competition from other global and local QSR players, particularly in the pizza segment where competitive intensity has impacted SSSG and margins.
Competitive Moat
The moat is built on exclusive franchise rights for globally recognized Yum! Brands (KFC, Pizza Hut), a large-scale network of 500+ stores providing procurement advantages, and a professional management team with deep industry expertise.
Macro Economic Sensitivity
Highly sensitive to food inflation and consumer discretionary spending. Operating margins moderated from 19.0% to 17.8% in FY24 due to inflationary costs and soft demand.
Consumer Behavior
Shift toward delivery-led consumption and value-seeking behavior amid high inflation, evidenced by the increase in delivery sales mix and decline in same-store transactions.
Geopolitical Risks
Operations in Sri Lanka expose the company to local economic volatility, though the segment saw a strong turnaround in FY25.
Regulatory & Governance
Industry Regulations
Compliance with the Companies Act 2013, SEBI Listing Regulations, and Indian Accounting Standards (Ind AS) is maintained. The company has established a Risk Management Committee per Regulation 21 of Listing Regulations.
Taxation Policy Impact
The effective tax rate for FY25 was approximately 27.8% (INR 64.32 million tax on INR 231.36 million PBT).
Legal Contingencies
The Board confirms the maintenance of adequate accounting records for safeguarding assets and preventing fraud; no specific pending court case values were disclosed.
Risk Analysis
Key Uncertainties
Key risks include sustained negative SSSG in India operations, inflationary pressure on raw materials (31.47% of revenue), and potential delays in the stabilization of new stores which could further impact RoCE (currently 2.9%).
Geographic Concentration Risk
High concentration in India (85% of revenue), with secondary exposure to Sri Lanka (15%).
Third Party Dependencies
Highly dependent on Yum! Brands for franchise rights and brand standards.
Technology Obsolescence Risk
The company is mitigating tech risks through digital transformation and implementing cyber security policies to protect its growing delivery and digital sales channels.
Credit & Counterparty Risk
Trade receivables are low at INR 365.62 million (1.2% of revenue), indicating minimal credit risk due to the cash-and-carry nature of the QSR business.
