This article first appeared on GuruFocus .
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Revenue:INR888 crore, up 15% year-on-year.
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Adjusted EBITDA:INR75 crore, up 37% year-on-year, margin at 8.4%.
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Consolidated EBITDA:INR140.6 crore, up 24% year-on-year, margin at 15.8%.
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Consolidated Adjusted PBT:INR27.3 crore, margin at 3.1%.
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Consolidated PBT:INR16.2 crore, margin at 1.8%.
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Store Count:Total of 1,074 restaurants as of June 30, 2026.
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KFC SSSG:5% for the quarter.
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KFC Revenue Growth:17% year-on-year.
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KFC Restaurant EBITDA:16.9%, improved by 120 basis points.
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Pizza Hut SSSG:1% after five quarters.
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Pizza Hut Revenue Growth:3% year-on-year.
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Pizza Hut Restaurant EBITDA:Loss of 3.6%, down by 110 basis points.
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Sri Lanka SSSG:9% for the quarter.
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Sri Lanka Revenue Growth:13% in LKR terms.
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Sri Lanka Restaurant EBITDA:12%, impacted by higher energy costs and wage inflation.
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Release Date: July 24, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Sapphire Foods India Ltd ( BOM:543397 ) reported a 15% revenue growth in Q1 FY27, marking the best performance in the last 11 quarters.
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The company achieved a 32% adjusted EBITDA growth, the highest in the last 15 quarters.
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KFC India delivered a 5% same-store sales growth (SSSG) and a 17% system growth, driven by strong dine-in and takeaway contributions.
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The company added 16 new KFC restaurants and 5 Pizza Hut outlets in India, expanding its total restaurant count to 1,074.
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Gross margin improved by 160 basis points due to lower discounts and a 2% price increase during the quarter.
Negative Points
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Pizza Hut India reported only a 1% SSSG after five quarters, indicating slower growth compared to KFC.
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Higher energy costs impacted the restaurant EBITDA for Pizza Hut, resulting in a loss of 3.6%, down by 110 basis points.
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The Sri Lanka business faced profitability challenges due to inflationary pressures, currency depreciation, and increased utility costs.
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Despite the positive SSSG, the demand environment remains similar without significant improvement.
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The company faces challenges in maintaining profitability in Sri Lanka, with normalization expected to be a few quarters away.
Q & A Highlights
Q: How should we look at the demand environment for KFC and Pizza Hut, and how is it trending? A: Sanjay Purohit, Group CEO, stated that there hasn't been a material improvement in the demand environment, which remains similar. The growth seen in KFC is due to strategic efforts to improve sales, and Pizza Hut's dine-in sales have improved. However, month-on-month trends are difficult to predict, with fluctuations observed in different months.
Q: What measures are being taken to improve profitability in Sri Lanka, and when can normalization be expected? A: Sanjay Purohit explained that the focus in Sri Lanka is on driving transaction growth despite inflationary pressures. The business is resilient, and profitability is expected to improve over time as input costs stabilize. Normalization might be a couple of quarters away.
Q: At what SSSG threshold does operating leverage kick in, particularly for Pizza Hut? A: Vijay Jain, CFO, mentioned that typically a 3% to 5% SSSG is needed to cover inflation in costs. Efficiencies achieved this year have helped create leverage even at this range. Below this threshold, restaurant percentage margins may decline, while above it, margins improve.
Q: How does the potential sale of Pizza Hut globally impact Sapphire Foods' master agreement with them? A: Vijay Jain clarified that the global sale of Pizza Hut does not impact current franchise agreements. A new brand owner could bring renewed focus and potentially benefit the brand.
Q: How are new KFC stores performing in smaller cities, and what is the potential for expansion? A: Vijay Jain stated that smaller city stores perform similarly to tier-one metro stores in terms of profitability and payback, despite lower ADS levels. The company plans to continue expanding with 60 to 80 new KFC stores annually, as performance metrics remain strong.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
