Sapphire Foods India Limited (NSE:SAPPHIRE) announced its Q1 FY27 financial results and investor presentation on 24 July 2026, reporting consolidated revenue of Rs 8,882 million, up 15 per cent year-over-year, marking its strongest growth in the last 11 quarters. Adjusted EBITDA expanded 37 per cent to Rs 749 million, the best growth in 15 quarters, driven by positive same-store sales growth (SSSG) across all brand verticals: KFC and Pizza Hut in India and Sri Lanka operations.
Key Highlights
- Consolidated revenue in Q1 FY27 stood at Rs 8,882 million, representing 15 per cent year-over-year growth, the highest in the last 11 quarters.
- Adjusted EBITDA reached Rs 749 million with margin expansion of 130 basis points to 8.4 per cent, reflecting 37 per cent growth year-over-year, the strongest in 15 quarters.
- Sapphire Foods added 22 net new restaurants during Q1 FY27: 16 KFC and 5 Pizza Hut outlets in India, plus 1 Pizza Hut in Sri Lanka, bringing total restaurant count to 1,074.
- KFC India delivered 17 per cent revenue growth with positive SSSG of 5 per cent and restaurant EBITDA margin of 16.9 per cent, despite energy cost inflation.
- Pizza Hut India returned to positive SSSG of 1 per cent in Q1 FY27 after five consecutive quarters of negative SSSG, with dine-in sales also showing improvement.
- Sri Lanka operations achieved 14 per cent revenue growth in local currency with SSSG of 9 per cent in LKR, though restaurant EBITDA margin declined 70 basis points to 12.0 per cent due to minimum wage revision and commodity inflation.
- Consolidated adjusted profit before tax (PBT) surged 229 per cent to Rs 273 million from Rs 83 million in Q1 FY26, with PBT improving to Rs 162 million from negative Rs 18 million in the prior year quarter.
About the Company
Sapphire Foods India Limited (NSE:SAPPHIRE, BSE:543397) is a leading YUM Brands franchisee operator in the Indian subcontinent, managing KFC and Pizza Hut restaurants across India and Sri Lanka. Headquartered in Mumbai with registered office in Panchkula, Haryana, the company began operations in September 2015 following the acquisition of approximately 270 KFC and Pizza Hut stores. As of 30 June 2026, Sapphire operates 591 KFC restaurants and 346 Pizza Hut outlets in India, alongside 126 Pizza Hut and 11 Taco Bell restaurants in Sri Lanka, totalling 1,074 units. The company operates in high-traffic metropolitan locations and expanding trade areas across both geographies, focusing on dine-in, takeaway, and delivery channels with a strategy centred on value-driven consumer engagement and operational efficiency.
Announcement in Detail
Sapphire Foods filed its Q1 FY27 investor release and earnings presentation with the National Stock Exchange on 24 July 2026 pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company reported consolidated restaurant sales revenue of Rs 8,882 million for the quarter ended 30 June 2026, marking 15 per cent year-over-year growth and the strongest quarterly performance in the preceding 11 quarters. The company attributed this growth trajectory to positive same-store sales growth across all verticals: KFC India, Pizza Hut India, and Sri Lanka operations.
On the profitability front, consolidated adjusted EBITDA reached Rs 749 million, representing 37 per cent year-over-year expansion and the highest growth rate in the last 15 quarters, with adjusted EBITDA margin improving 130 basis points to 8.4 per cent. Consolidated EBITDA (including Ind-AS 116 adjustments) stood at Rs 1,406 million with margin of 15.8 per cent, growing 24 per cent year-over-year with 120 basis points margin expansion. Consolidated adjusted PBT before exceptional items grew 229 per cent to Rs 273 million from Rs 83 million in Q1 FY26, with PBT margin reaching 3.1 per cent compared to 1.1 per cent prior year. Unadjusted PBT improved to Rs 162 million from a loss of Rs 18 million year-over-year, marking a 200 basis points margin improvement to 1.8 per cent.
Restaurant expansion during Q1 FY27 totalled 22 net additions: KFC India added 16 outlets, Pizza Hut India added 5, and Sri Lanka added 1 Pizza Hut restaurant. This brought total company restaurant count to 1,074 as of 30 June 2026. KFC India delivered 17 per cent revenue growth with 5 per cent positive SSSG, while Pizza Hut India returned to positive SSSG of 1 per cent after a five-quarter negative streak. Sri Lanka reported 14 per cent revenue growth in local currency with 9 per cent positive SSSG in LKR terms.
Impact on Investors
Investors will note that Sapphire Foods has demonstrated consistent operational momentum across consecutive quarters, with Q1 FY27 marking the second straight quarter of strong performance. The 15 per cent revenue growth alongside 37 per cent adjusted EBITDA growth indicates that the company is achieving both top-line expansion and significant operational leverage, with adjusted EBITDA margin expanding 130 basis points. The shift to positive profitability at the PBT level (Rs 162 million from negative Rs 18 million) represents a material improvement in net earnings power. The filing shows that growth is diversified across geographies and brand verticals rather than concentrated in a single operating unit, reducing execution risk from over-reliance on one brand or market.
Investors will observe that KFC India continues to drive growth with 17 per cent revenue expansion and expanding restaurant EBITDA margins despite inflationary cost pressures, while Pizza Hut India's return to positive SSSG after five quarters of contraction represents stabilisation of that vertical. However, the disclosed 3 per cent revenue growth and negative 3.6 per cent restaurant EBITDA margin in Pizza Hut India warrant monitoring, as the brand segment remains pressured by energy cost inflation. Sri Lanka operations contributed meaningfully to consolidated results with 14 per cent revenue growth in local currency, though restaurant EBITDA margin compression of 70 basis points due to minimum wage revisions and commodity inflation indicates cost inflation challenges in that geography. The filing shows restaurant additions of 22 units during the quarter are proceeding at a measured pace, supporting long-term capacity growth without aggressive expansion that might strain unit economics.
Sector / Market Context
The quick-service restaurant (QSR) sector in India has experienced mixed performance in recent years, with organized QSR chains facing headwinds from input cost inflation, particularly energy and food commodities, alongside competitive pricing pressures. Sapphire Foods' achievement of positive SSSG across all verticals in Q1 FY27, including the return to positive sales at Pizza Hut India, reflects both brand strength and the effectiveness of value-led promotional strategies in driving traffic during an inflationary period. The company's focus on dine-in and takeaway transaction growth through everyday value offerings and targeted promotions aligns with consumer behaviour patterns in the Indian QSR market, where value perception significantly influences purchase frequency.
The expansion of the Sri Lanka footprint, while contributing materially to consolidated results with 14 per cent local-currency revenue growth, is occurring within a context of geopolitical headwinds and currency pressures affecting that market. The disclosed challenges of minimum wage revisions and energy-commodity inflation in Sri Lanka are consistent with reported economic conditions in that geography. Sapphire's ability to deliver positive SSSG despite these macro constraints, and to expand restaurant counts at a disciplined pace of 22 units quarterly, indicates the company is balancing growth investment with profitability in an uncertain external environment. The achievement of best-in-11-quarters revenue growth and best-in-15-quarters EBITDA growth positions the company within the peer context of organised QSR players managing post-pandemic normalisation and inflationary cycles.