Sapphire Foods Q3 Profit Up 18% YoY; Revenue Jumps 14%

6 Feb 2025 , 03:28 PM

Sapphire Foods India, the operator of KFC India and Pizza Hut, reported an 18% year-on-year (YoY) increase in net profit, reaching ₹12 crore for the third quarter of FY25, compared to ₹10 crore in the same period last year.

Revenue for the quarter rose 14% YoY to ₹756.5 crore from ₹665.5 crore, as it was powered by strong growth from KFC India, Pizza Hut India, and Sri Lanka. EBITDA rose 10% YoY at ₹134.2 crore vs ₹122 crore in Q3FY24. Even as revenue growth trickled in, the EBITDA margin eased to 17.7% from 18.3% as operating costs continue to go up.

During the quarter, the company said it opened 54 new restaurants in India – 35 KFC and 16 Pizza Hut – in Sri Lanka, 4 Pizza Hut and 1 Taco Bell, and closed 2 outlets in the Maldives. Sapphire Foods had 963 restaurants in regions by the end of December 2024.

Consolidated restaurant EBITDA grew 9% YoY. Margins declined 60 basis points to 15.4%. Consolidated profit after tax came in at ₹12.7 crore. Adjusted PAT came in at ₹19.4 crore with a margin of 2.6%. SSSG for KFC India came in at -3%. That improved sequentially. Restaurant sales growth was up 12% YoY. Restaurant EBITDA margin contracted 190 basis points YoY to 18.2%, largely because of operating deleverage.

Growth in value-driven core products, new menu innovations, and meal-time offerings will be the drivers of the company growing against declining SSSG. Pizza Hut India SSSG grew 5%. Average daily sales were flat at ₹48,000. Restaurant sales of Pizza Hut India grow by 10% YoY; restaurant EBITDA margin was up by 10 basis points at 4.7% due to increased marketing spendings.

The performance of Sri Lankan operations is still great; SSSG is reported to be 14% in local currency. Sri Lanka restaurant EBITDA margin +360 basis points to 17.8%; however, sales grow 15pc in local and 30pc in rupee terms. Key drivers for restaurants in Sri Lanka were operational efficiencies, innovation at the product front, and being value-driven. The company is closing all four restaurants in the Maldives between Nov 2024 and Jan 2025; it’s leaving this market.