Sapphire Foods Q3 results: KFC India operator’s profit jumps 18%, but margins decline on higher costs

KFC India, Pizza Hut operator Sapphire Foods India announced the results for the third quarter of fiscal year 2025 on Thursday. The company reported an 18% year-on-year increase in net profit to ₹12 crore in the three months ended 2024, up from ₹10 crore a year earlier.

Revenue rose 14% to ₹756.5 crore from ₹665.5 crore, driven by double-digit growth across all three business segments—KFC India, Pizza Hut India, and Sri Lanka.

EBITDA increased 10% to ₹134.2 crore, compared with ₹122 crore in the year-ago quarter. However, margins declined to 17.7% from 18.3% due to higher operating costs, sending the company’s shares down 0.6% to ₹316.65 as at 2:34 pm on the BSE.

The company added 54 restaurants during the quarter, including 35 KFC and 16 Pizza Hut outlets in India, four Pizza Hut and one Taco Bell outlet in Sri Lanka, while closing two locations in the Maldives. As of December 31, 2024, Sapphire Foods operated 963 restaurants.
Consolidated restaurant EBITDA rose 9% year-on-year, with margins at 15.4%, down 60 basis points. Consolidated profit after tax stood at ₹12.7 crore, while adjusted PAT was ₹19.4 crore, reflecting a margin of 2.6%.KFC India’s same-store sales growth (SSSG) declined 3% but showed improvement over the previous two quarters. Restaurant sales increased 12%, though restaurant EBITDA margin contracted 190 basis points year-on-year to 18.2% due to operating deleverage. The company aims to revive SSSG through value-driven core products, new menu innovations, and expanded meal-time offerings.

Pizza Hut India reported a 5% SSSG, with average daily sales holding steady at ₹48,000. Restaurant sales grew 10% year-on-year, while restaurant EBITDA margin improved by 10 basis points to 4.7%, supported by additional marketing investments.

Sri Lanka operations posted a robust performance, with same-store sales growth of 14% in local currency. Restaurant EBITDA margin expanded 360 basis points to 17.8%, while sales rose 15% in local currency and 30% in rupee terms. The company attributed the strong performance to operational efficiency, product innovation, and a value-driven strategy.

Sapphire Foods closed all four of its restaurants in the Maldives between November 2024 and January 2025.

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