KFC leads growth, but Sapphire Foods posts Q4 loss

Sapphire Foods India Ltd posted revenue of Rs 789.8 crore in Q4 FY26, up 9.0% year-on-year from Rs 724.3 crore. On a sequential basis, revenue declined 3.8% from Rs 820.9 crore in Q3 FY26.

The company reported its best same-store sales growth (SSSG) performance in the last 12 quarters for Q4 FY26, driven by strong momentum in its KFC business. However, the quarter still ended in a loss, weighed down by continued weakness in Pizza Hut India and ongoing investments.

Including other income, total income stood at Rs 797.2 crore, registering a 10.1% YoY increase, but a 2.9% decline quarter-on-quarter.

KFC emerged as the primary growth engine, with revenues rising 15% YoY, the highest in the last eight quarters. Same-store sales growth for KFC stood at 4% (6% excluding the impact of Chaitra Navratri), the strongest in 14 quarters. 

Restaurant EBITDA margins expanded to 16.8%, up 110 basis points YoY, aided by gross margin improvement and operating leverage.

The company said growth was driven by a two-pronged consumer recruitment strategy focused on dine-in and takeaway. In North and West markets, KFC leaned on value-led propositions such as the Rs 99 Chicken Krisper Burger Meal, while in South India it deployed targeted high-value offers on select days. These efforts were supported by incremental marketing spends and gross margin investments.

In contrast, Pizza Hut India remained under pressure. Revenues declined 6% YoY, with SSSG down 7%. The brand reported a negative restaurant EBITDA margin of 6.0%, contracting 140 basis points YoY.

At the consolidated level, Sapphire Foods reported a net loss of Rs 12.6 crore in Q4 FY26, compared to a loss of Rs 4.8 crore in Q3 FY26 and a profit of Rs 2.0 crore in Q4 FY25, indicating both a sequential widening of losses and a reversal on a yearly basis.

On the expansion front, the company added 24 restaurants during the quarter, including 19 KFC outlets in India, two Pizza Hut outlets in India, and three Pizza Hut outlets in Sri Lanka, taking its total store count to 1,052 as of March 31, 2026.

The Sri Lanka market also remained resilient, delivering 15% revenue growth in local currency terms.

Despite the reported loss, the company indicated that improving SSSG trends and strong consumer traction at KFC provide a positive signal as it enters the new fiscal, even as it continues to navigate cost pressures and turnaround challenges in Pizza Hut.