KFC, Pizza Hut operator Sapphire Foods swings to loss in Q2 FY27

Mumbai, October 22 (IANS): Sapphire Foods India Limited, which operates KFC and Pizza Hut restaurants in India and Sri Lanka, on Thursday swung into a net loss of Rs 1.1 crore in the second quarter of FY27 from a profit of Rs 14.2 crore in the previous quarter (Q1 FY27).

On a year-on-year (YoY) basis, however, the company reduced its losses from Rs 12.8 crore reported in the corresponding quarter of the previous fiscal (Q2 FY26), according to an exchange filing.

Revenue from operations increased 19.7 per cent to Rs 888 crore in the September quarter from Rs 742 crore a year ago, driven by strong performance in its KFC business and improving momentum at Pizza Hut.

The company's EBITDA rose 23.5 per cent year-on-year to Rs 126 crore from Rs 102 crore in the same period last year. EBITDA margin expanded to 14.2 per cent from 13.7 per cent, as per its regulatory filing.

Sapphire Foods continued to expand its store network during the quarter, adding 15 KFC restaurants and one Pizza Hut outlet in Sri Lanka. The company's total restaurant count stood at 1,086 as of September 30, 2026.

The KFC business delivered its strongest quarterly performance in recent years, recording revenue growth of 26 per cent, the highest in the last 16 quarters.

Same Store Sales Growth (SSSG) came in at 14 per cent, with dine-in and takeaway segments outperforming delivery, supported by double-digit transaction growth.

The company attributed the strong performance to its consumer acquisition strategy built around value-focused offerings. According to the investor presentation, products such as the Rs 99 Chicken Krisper Burger Meal, the Rs 149 Thalaiva Meal in Tamil Nadu, and buy-one-get-one offers on chicken buckets helped attract customers and drive higher footfalls, supported by marketing investments.

Meanwhile, Pizza Hut, which has historically lagged the company's KFC business, showed signs of improvement during the quarter. The segment reported revenue growth of 7 per cent and its highest same-store sales growth in the last seven quarters, alongside double-digit same-store transaction growth.

The company said value-driven offerings such as the Rs 99 four-course meal and buy-one-get-one deals contributed to the improved sales performance.

However, Pizza Hut's EBITDA margin remained under pressure and stood at a negative 2.8 per cent, down 100 basis points from a year earlier, mainly due to higher energy costs.