Sapphire Foods India, the operator of KFC, Pizza Hut and Taco Bell restaurants across India and South Asia, reported a net loss of Rs 12.7 crore (USD 1.45 million) for the quarter ended 30 September 2025, widening from Rs 3 crore a year earlier, as muted urban demand and higher input costs weighed on earnings.
Revenue from operations increased 7 per cent year-on-year to Rs 742.7 crore, supported by network expansion and steady brand growth despite near-term headwinds. The company described the quarter as “reasonable,” noting that KFC revenue rose 7 per cent, or 10 per cent excluding the Navratri impact, as the festival’s shift to the second quarter curbed meat consumption and slowed sales.
KFC’s same-store sales growth (SSSG) declined 3 per cent, while Pizza Hut India’s revenue dropped 6 per cent year-on-year. However, the brand’s Tamil Nadu territory achieved double-digit growth, underscoring Sapphire’s regional focus. Nationally, Pizza Hut’s SSSG fell 8 per cent, and restaurant-level Ebitda turned negative at 1.8 per cent, down 590 basis points from a year ago.
In Sri Lanka, the company recorded an 18 per cent revenue rise (in LKR), backed by new product launches and dine-in recovery. The region delivered 14 per cent same-store sales growth and healthy transaction gains, aided by marketing initiatives.
During the quarter, Sapphire opened 19 new KFCs and two Pizza Hut restaurants in India, along with one Pizza Hut and one Taco Bell in Sri Lanka, taking its total outlet count to 997 as of 30 September 2025.
The company’s core profit margin narrowed 230 basis points to 14.3 per cent, reflecting cost pressures from marketing and raw materials.
India’s quick-service restaurant (QSR) market continues to face headwinds as higher living costs curb dining frequency in urban areas. Domestic players offering lower-priced alternatives are adding to competition for global brands such as Sapphire Foods and Devyani International, which is yet to report its results.
In contrast, Jubilant Foodworks, which operates Domino’s Pizza in India, has sustained growth by focusing on affordability and quick delivery. Sapphire Foods India traded 1.04 per cent higher at Rs 290.75 on the National Stock Exchange (NSE). |
