Sapphire Foods returns to profit in Q1 as revenue climbs 15 per cent

MUMBAI: Sapphire Foods has found its recipe again, this quarter, the numbers are finally back on the menu. The operator of KFC and Pizza Hut restaurants in India returned to profit in the first quarter of FY27, helped by double-digit revenue growth and improved operating performance after reporting losses in both the previous quarter and the corresponding period last year.

According to the company’s unaudited consolidated financial results, revenue from operations rose 14.7 per cent year-on-year to Rs 8,909.60 million in the quarter ended 30 June 2026, compared with Rs 7,768.28 million a year earlier. Revenue also increased sequentially from Rs 7,922.23 million in the March quarter.

Including other income, total income stood at Rs 8,966.31 million, up from Rs 7,836.08 million in the year-ago period.

The company reported a profit before tax (PBT) of Rs 161.67 million, a sharp turnaround from a loss of Rs 18.44 million in the corresponding quarter last year and a loss of Rs 154.85 million in the preceding quarter.

After tax, net profit came in at Rs 140.22 million, compared with a loss of Rs 17.38 million in the June 2025 quarter and a loss of Rs 126.21 million in the March 2026 quarter.

The March quarter had also been impacted by exceptional items worth Rs 127.96 million, while the full FY26 financial year included Rs 239.59 million in exceptional charges.

Total expenses rose to Rs 8,804.64 million from Rs 7,854.52 million a year ago, reflecting the company’s expanding operations. Cost of materials consumed increased to Rs 2,780.57 million, while employee benefit expenses climbed to Rs 1,153.45 million. Finance costs stood at Rs 319.31 million, depreciation and amortisation at Rs 973.62 million, and other expenses increased to Rs 3,577.69 million.

Despite returning to profitability, the company reported a total comprehensive income of Rs 50.08 million, weighed down by Rs 90.14 million in other comprehensive losses, primarily due to foreign currency translation adjustments and remeasurement losses on employee benefit obligations.

On a per-share basis, basic and diluted earnings per share improved to Rs 0.44, compared with a loss of Rs 0.06 in the year-ago quarter and a loss of Rs 0.39 in the preceding quarter.

For the full FY26, Sapphire Foods had reported revenue from operations of Rs 31,253.17 million and a net loss of Rs 319.54 million, highlighting the significance of the latest quarter’s return to profitability.

Sapphire Foods, which operates KFC and Pizza Hut restaurants across India and Sri Lanka through subsidiaries including Gamma Pizzakraft (Lanka) Private Limited, French Restaurants Private Limited and Gamma Island Food Private Limited, has signalled a stronger start to FY27 as higher sales helped offset rising operating costs and restore profitability.