Sapphire Foods posts 20% Q2 sales growth as KFC outperforms Pizza Hut

Sapphire Foods India, which operates KFC and Pizza Hut restaurants in India, reported a 20% year-on-year increase in restaurant sales for the quarter ended September 30, 2026. Adjusted EBITDA rose 39% to ₹62.4 crore, while the adjusted EBITDA margin expanded 100 basis points to 7.1%.

The company added 15 KFC restaurants in India and one Pizza Hut outlet in Sri Lanka during the quarter, taking its consolidated network to 1,086 outlets from 1,052 at the end of March 2026. Its Indian portfolio comprised 606 KFC restaurants and 342 Pizza Hut outlets.

EBITDA increased 21% year-on-year to ₹128.6 crore, with the margin improving 20 basis points to 14.5%. Adjusted profit before tax, excluding exceptional items, stood at ₹12 crore against a loss of ₹4.3 crore in the corresponding quarter last year. However, profit before tax remained negative at ₹6 crore.

KFC India’s revenue grew 26% year-on-year, marking its highest growth in 16 quarters. Same-store sales growth (SSSG) reached 14%, with Sapphire Foods partly attributing the performance to Navratri falling in the third quarter this year, rather than the second quarter as it did last year. The brand’s EBITDA margin improved 70 basis points to 14.5%, despite inflation in raw material and energy costs and increased marketing expenditure.

The company also reported stronger SSSG in dine-in and takeaway than in delivery, indicating that growth was not uniform across ordering channels.

Pizza Hut India’s revenue increased 7% year-on-year, its highest growth in seven quarters, while SSSG stood at 5%. Value promotions, including the ₹99/₹4-course meal and Buy 1 Get 1 offers, supported the performance. Profitability, however, remained a concern. Pizza Hut’s EBITDA margin declined 100 basis points year-on-year to negative 2.8%, with higher energy costs significantly weighing on margins.

The contrasting results underline the differences in performance across Sapphire Foods’ portfolio. While KFC combined stronger sales growth with an improved EBITDA margin, Pizza Hut continued to face cost pressures despite a recovery in revenue growth.

Sapphire Foods’ investor presentation highlighted digital ordering and customer engagement as priorities for KFC and Pizza Hut. KFC India had recorded more than 75 million app downloads and 2.4 million monthly active users, with digital kiosks deployed across more than 80% of its restaurants. Pizza Hut India reported over 29 million app downloads and more than 0.8 million monthly active users.

While these figures indicate the scale of the brands’ owned digital channels, Sapphire Foods did not disclose the contribution of app-based orders to overall sales or the incremental revenue generated by digital kiosks.

For the six months ended September 2026, Sapphire Foods’ consolidated restaurant sales increased 17% year-on-year to ₹1,773.6 crore. Adjusted EBITDA grew 38% to ₹137.3 crore, with the margin expanding 110 basis points to 7.7%. EBITDA for the six-month period rose 23% to ₹269.2 crore, while its margin improved 70 basis points to 15.2%.

The results point to continued network expansion and improved operating performance at the consolidated level, with KFC providing the primary growth impetus. Pizza Hut’s negative EBITDA margin, meanwhile, remains a key profitability challenge for the company.