Sapphire Foods India Reports Turnaround in Q1 FY27; Revenue Up 14.7% YoY to ₹891 Crore with Net Profit of ₹14.02 Crore

Sapphire Foods India Limited (BSE: 543397, NSE: SAPPHIRE), one of the largest operators of YUM! Brands (KFC and Pizza Hut) in the Indian subcontinent, announced its unaudited consolidated financial results for the first quarter ended June 30, 2026 (Q1 FY27).

The company delivered its best top-line growth in 11 quarters, with revenue from operations rising 14.7% year-on-year (YoY) to ₹890.96 crore (₹8,909.60 million), compared to ₹776.83 crore in Q1 FY26. Driven by positive Same-Store Sales Growth (SSSG) across all brand verticals and operational leverage, Sapphire Foods staged a complete bottom-line turnaround, recording a Net Profit (PAT) of ₹14.02 crore (₹140.22 million), against a net loss of ₹1.74 crore in Q1 FY26.

Executive Financial Summary

Revenue from Operations: Stood at ₹8,909.60 million (₹890.96 crore), up 14.7% YoY from ₹7,768.28 million in Q1 FY26 and up 12.5% sequentially from ₹7,922.23 million in Q4 FY26.

Adjusted EBITDA (pre-Ind AS 116): Surged 37% YoY to ₹749 million - the best performance in 15 quarters - with Adjusted EBITDA margin expanding by 130 basis points to 8.4%.

Consolidated EBITDA: Reached ₹1,406.30 million (15.8% margin), representing a 24% YoY growth over ₹1,133.86 million (14.6% margin) in Q1 FY26.

Gross Profit & Margin: Gross profit increased 17% YoY to ₹6,129.03 million, with Gross Margin expanding 140 basis points to 69.0% (up from 67.6% in Q1 FY26).

Profit Before Tax (PBT): Turnaround to a profit of ₹161.67 million (₹16.17 crore), compared to a loss before tax of ₹18.44 million in Q1 FY26 and a loss of ₹154.85 million in Q4 FY26.

Profit After Tax (PAT): Came in at ₹140.22 million (₹14.02 crore) with a PAT margin of 1.6%, compared to a loss of ₹17.38 million in Q1 FY26.

Earnings Per Share (EPS): Basic and diluted EPS stood at ₹0.44 per share (face value ₹2/- each), compared to negative EPS of ₹0.06 in Q1 FY26 and negative ₹0.39 in Q4 FY26.

Operational & Brand Performance Highlights

+--------------------------+---------------+---------------+--------------------+
| Vertical   | SSSG (YoY) | Revenue Growth| Restaurant EBITDA |
+--------------------------+---------------+---------------+--------------------+
| Sapphire KFC (India) | +5.0% | +17.0% | 16.9% (+120 bps) |
| Sapphire Pizza Hut (India| +1.0% | +3.0% | -3.6% (-110 bps) |
| Sri Lanka Business (LKR) | +9.0% | +14.0% | 12.0% (-70 bps) |
+--------------------------+---------------+---------------+--------------------+

1. Sapphire KFC

Strong Growth Drivers: Delivered 17% revenue growth with SSSG at +5%, supported by a robust Dine-In and Take-Away transaction surge.

Consumer Recruitment Strategy: Success driven by a two-pronged value offering - Everyday Value via the ₹99 Chicken Krisper Burger Meal and Abundant Value through BOGO offers on Chicken Buckets.

Margin Resilience: Restaurant EBITDA margin expanded by 120 bps to 16.9%, benefiting from gross margin gains and operating leverage despite notable gas/energy cost inflation.

2. Sapphire Pizza Hut

SSSG Turnaround: Returned to positive SSSG (+1%) after 5 trailing quarters of decline, with Dine-In SSSG turning positive as well.

Regional Outperformance: Tamil Nadu (exclusive territory) performed well on the back of aggressive marketing investments and value Dine-In promotions.

Profitability Impact: Restaurant EBITDA margin fell 110 bps YoY to -3.6%, heavily impacted by elevated utility and gas prices.

3. Sri Lanka Operations

Top-line Momentum: Generated 14% revenue growth in LKR terms with SSSG of +9%.

Headwinds: Restaurant EBITDA margin contracted by 70 bps YoY to 12.0%, as positive SSSG leverage was countered by statutory minimum wage increases and elevated food/energy inflation linked to global geopolitical tensions.

Network Expansion & Store Count

Sapphire Foods maintained a steady pace of store rollouts during the quarter, adding a net total of 22 new restaurants:

KFC (India): +16 new stores

Pizza Hut (India): +5 new stores

Pizza Hut (Sri Lanka): +1 new store

As of June 30, 2026, Sapphire Foods operates a total network of 1,074 restaurants.

Consolidated Expense Structure

Total operating expenses for Q1 FY27 were ₹8,804.64 million (₹880.46 crore), compared to ₹7,854.52 million in Q1 FY26:

Cost of Materials Consumed (COGS): ₹2,780.57 million (31.2% of operations revenue).

Employee Benefits Expense: ₹1,153.45 million, up 12.7% YoY from ₹1,023.27 million in Q1 FY26.

Finance Costs: ₹319.31 million (includes Ind-AS 116 lease interest expense).

Depreciation & Amortization: ₹973.62 million, compared to ₹919.52 million in Q1 FY26.

Other Expenses: Totaled ₹3,577.69 million, compared to ₹3,083.06 million in Q1 FY26, reflecting expanded store operations and higher energy bills.

Source : Equity Bulls

Keywords

SapphireFoodsIndia Q1FY27 Q1FY2027 ResultUpdate