Sapphire Foods
Sapphire Foods
Consumer DiscretionaryKey Fundamentals
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Key Insights
Weaknesses
5- Stock is trading at 5.22 times its book value
- Company has low interest coverage ratio.
- Promoter holding is low: 26.1%
- Company has a low return on equity of 1.65% over last 3 years.
- Promoter holding has decreased over last 3 years: -18.8%
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 69d agoSapphire Foods India, the largest KFC and Pizza Hut franchisee in India and parts of South Asia, reported FY26 consolidated revenue of ₹3,125 crore (up 8% YoY) but swung to a net loss of ₹32 crore versus a net profit of ₹16.7 crore in FY25. The stock trades at a market cap of ~₹5,974 crore with a negative P/E of -187.7x, P/B of 4.29x, and has declined 45% over the past year while the company expanded its restaurant count to 1,052 stores.
- Revenue grew at an 11% CAGR over 3 years and 25% CAGR over 5 years, demonstrating consistent topline expansion from ₹1,722 crore in FY22 to ₹3,125 crore in FY26
- Restaurant network expanded 10% YoY in FY25 with 91 net new additions, reaching 963 stores by FY25-end and further growing to 1,052 by March 2026, indicating continued unit economics confidence by management
- Q4 FY26 EBITDA improved 10% YoY to ₹1,249 million with margin of 15.8%, showing sequential recovery in profitability after weak earlier quarters
- Sri Lanka operations delivered a strong turnaround with double-digit growth and improved margins, diversifying geographic risk beyond India
- FY26 consolidated EBITDA was ₹4,804 million (15.4% margin), demonstrating the business generates meaningful operating cash flow despite bottom-line losses driven by high depreciation of ₹392 crore
- Stock has corrected 45% in 1 year from its 52-week highs, potentially compressing valuations relative to the underlying store expansion trajectory
- Company achieved 100% eco-friendly packaging and expanded solar installations to 121 restaurants, positioning for long-term ESG compliance and cost savings
- Company swung to a net loss of ₹32 crore in FY26 from a net profit of ₹16.7 crore in FY25, with TTM profit declining 151% — profitability is deteriorating
- Return on equity averaged just 1.65% over the last 3 years and turned negative at -1% in the latest year, indicating poor capital efficiency relative to the 4.29x P/B valuation
- Promoter holding is low at 26.1% and has declined by 18.8 percentage points over the last 3 years, signaling reduced promoter commitment
- Adjusted EBITDA margin contracted from 9.1% in FY25 to 7.6% in Q4 FY26 (down 150 bps YoY), with full-year FY26 EBITDA declining 2% YoY despite revenue growth — indicating negative operating leverage
- High depreciation burden of ₹392 crore in FY26 (up from ₹364 crore in FY25) due to aggressive store expansion under Ind AS 116 lease accounting, suppressing bottom-line visibility
- Interest costs rose to ₹123 crore in FY26 from ₹112 crore in FY25, with the company flagged for low interest coverage ratio, raising concerns about debt serviceability
- Same-store sales growth (SSSG) for KFC remained negative during FY25-FY26, suggesting demand weakness in the core brand despite new store additions
- Zero dividend yield with no near-term prospect of payout given the net loss position, offering no income support to shareholders
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 69d ago- HDFC MF cuts stake 2.84% Jun 19
HDFC Mutual Fund reduced its holding in Sapphire Foods by 2.84% to 6.76% as of June 16, 2026, signaling reduced institutional confidence.
- GIC sells 40 lakh shares Jun 12
GIC Private Limited sold 4,002,532 shares on June 10, 2026, reducing its stake to 5.003% of paid-up capital via open market transaction.
- ₹977 crore GST case won Jun 26
Tamil Nadu GST department dismissed a ₹977.06 million demand, ruling Sapphire Foods correctly availed input tax credit for FY23 and FY24. This removes a significant contingent liability.
- Exchanges clear Devyani merger Jun 15
NSE and BSE issued no-objection and no-adverse-observations letters respectively for the proposed merger with Devyani International, subject to further regulatory approvals.
- BRSR filed for FY 2025-26 Jun 27
Sapphire Foods filed its Business Responsibility and Sustainability Report for FY 2025-26, disclosing ESG performance and operational metrics.
- AGM scheduled for July 21 Jun 26
The 17th AGM will be held on July 21, 2026 via video conferencing, with notice and annual report to be sent electronically.
- New nominee director appointed Jun 19
Vikram Agarwal appointed as Non-Executive Nominee Director effective June 19, 2026, replacing Vinod Nambiar who resigned due to professional engagements.
- ₹31.73 crore block trade on NSE Jun 16
A block trade of approximately 17.48 lakh shares was executed at ₹181.45 per share on NSE, reflecting significant institutional-level activity.
TL;DR: Sapphire Foods secured a major positive with the ₹977 crore GST case dismissal removing contingent liability risk, and the Devyani merger is progressing with exchange clearances. However, notable stake reductions by GIC and HDFC MF suggest some institutional investors are taking profits or rebalancing. The merger trajectory and continued store-level execution will be key catalysts to watch in coming quarters.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 654 | 643 | 666 | 632 | 718 | 696 | 757 | 711 | 777 | 742 | 814 | 792 | 891 |
| Expenses | 533 | 528 | 544 | 529 | 594 | 584 | 622 | 605 | 664 | 640 | 680 | 668 | 751 |
| Operating Profit | 121 | 115 | 122 | 103 | 124 | 112 | 134 | 106 | 113 | 102 | 134 | 124 | 140 |
| OPM % | 19% | 18% | 18% | 16% | 17% | 16% | 18% | 15% | 15% | 14% | 16% | 16% | 16% |
| Other Income | 8 | 8 | 6 | 12 | 5 | -3 | 10 | 9 | 7 | 9 | -4 | -8 | 6 |
| Interest | 23 | 24 | 26 | 28 | 27 | 27 | 28 | 30 | 30 | 31 | 32 | 31 | 32 |
| Depreciation | 73 | 77 | 87 | 87 | 90 | 88 | 100 | 85 | 92 | 97 | 102 | 101 | 97 |
| PBT | 34 | 21 | 14 | 1 | 12 | -6 | 17 | 1 | -2 | -17 | -3 | -15 | 16 |
| Tax % | 26% | 29% | 30% | -143% | 31% | 2% | 24% | -237% | -6% | -23% | 43% | -18% | 13% |
| Net Profit | 25 | 15 | 10 | 2 | 8 | -6 | 13 | 2 | -2 | -13 | -5 | -13 | 14 |
| EPS in Rs | 0.78 | 0.48 | 0.32 | 0.08 | 0.27 | -0.1 | 0.37 | 0.06 | -0.06 | -0.4 | -0.15 | -0.39 | 0.44 |
Profit & Loss
| Particulars | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 957 | 1,194 | 1,340 | 1,020 | 1,722 | 2,266 | 2,594 | 2,882 | 3,125 | 3,239 |
| Expenses | 942 | 1,155 | 1,155 | 894 | 1,417 | 1,836 | 2,132 | 2,405 | 2,652 | 2,739 |
| Operating Profit | 15 | 39 | 186 | 125 | 305 | 430 | 462 | 477 | 474 | 501 |
| OPM % | 1.6% | 3.3% | 14% | 12% | 18% | 19% | 18% | 17% | 15% | 15% |
| Other Income | 2 | 9 | -83 | 61 | 38 | 30 | 33 | 22 | 4 | 3 |
| Interest | 2 | 18 | 72 | 76 | 78 | 87 | 101 | 112 | 123 | 125 |
| Depreciation | 55 | 74 | 191 | 209 | 214 | 264 | 324 | 364 | 392 | 398 |
| PBT | -40 | -44 | -161 | -99 | 51 | 108 | 70 | 23 | -37 | -19 |
| Tax % | 3% | 3% | -1% | 1% | 11% | -115% | 26% | 28% | -14% | — |
| Net Profit | -41 | -45 | -159 | -100 | 46 | 233 | 52 | 17 | -32 | -16 |
| EPS in Rs | -1.97 | -2.07 | -6.27 | -3.73 | 1.46 | 7.35 | 1.66 | 0.6 | -0.99 | -0.5 |
| Div. Payout % | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | — |
Balance Sheet
| Particulars | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 42 | 43 | 50 | 53 | 64 | 64 | 64 | 64 | 64 |
| Reserves | 436 | 429 | 474 | 427 | 944 | 1,192 | 1,275 | 1,334 | 1,326 |
| Borrowings | 31 | 96 | 646 | 645 | 789 | 963 | 1,164 | 1,292 | 1,417 |
| Other Liabilities | 326 | 527 | 214 | 225 | 368 | 372 | 334 | 350 | 447 |
| Total Liabilities | 834 | 1,095 | 1,384 | 1,349 | 2,165 | 2,591 | 2,837 | 3,040 | 3,255 |
| Fixed Assets | 628 | 719 | 1,161 | 1,084 | 1,390 | 1,789 | 2,178 | 2,338 | 2,569 |
| CWIP | 16 | 21 | 21 | 30 | 33 | 56 | 68 | 57 | 60 |
| Investments | 0 | 0 | 16 | 27 | 153 | 66 | 0 | 144 | 3 |
| Other Assets | 190 | 355 | 186 | 208 | 590 | 679 | 591 | 501 | 622 |
| Total Assets | 834 | 1,095 | 1,384 | 1,349 | 2,165 | 2,591 | 2,837 | 3,040 | 3,255 |
Cash Flow
| Particulars | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|
| Operating | 3 | 47 | 213 | 154 | 395 | 382 | 449 | 508 | 507 |
| Investing | -54 | -335 | -2 | -78 | -692 | -204 | -187 | -337 | -233 |
| Financing | 19 | 281 | -208 | -52 | 313 | -195 | -213 | -211 | -260 |
| Net Cash Flow | -32 | -7 | 3 | 25 | 16 | -17 | 49 | -39 | 14 |
| Free Cash Flow | -101 | -128 | 72 | 81 | 110 | -1 | 64 | 245 | 189 |
| CFO/OP | 38 | 130 | 116 | 125 | 132 | 89 | 98 | 107 | 108 |
Ratios
| Particulars | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 2 | 7 | 1 | 3 | 3 | 3 | 5 | 5 | 4 |
| Inventory Days | 39 | 35 | 40 | 56 | 46 | 49 | 44 | 39 | 41 |
| Days Payable | 128 | 106 | 110 | 170 | 138 | 107 | 104 | 98 | 104 |
| Cash Conversion Cycle | -87 | -63 | -69 | -110 | -89 | -55 | -55 | -54 | -59 |
| Working Capital Days | -101 | -139 | -42 | -87 | -56 | -53 | -35 | -33 | -32 |
| ROCE % | — | -5% | 1% | -2% | 9% | 10% | 7% | 6% | 4% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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63 extracted metrics + investor summaries across FY18–FY27.
Documents
Frequently Asked Questions about Sapphire Foods
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Company Information
Sapphire Foods is one of the largest franchisees of Yum! Brands Inc. in the subcontinent, and operates more than 400 KFC, Pizza Hut, and Taco Bell restaurants across India, Sri Lanka, and the Maldives.[1]
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