Shares of Sapphire Foods India gained 2% to hit an intraday high of ₹196.23 on the NSE at around 3:15 pm on Thursday, October 22, 2026, after reporting second quarter earnings. The stock recovered from day's lows to trade 1.7% higher as of the latest reports. This positive market response comes despite the company's strong operational performance being overshadowed by previous quarterly results. The stock has experienced mixed performance with a 18.5% decline in the past month, but has gained 9.5% in the last six months and declined 26.4% in 2026 so far. Motilal Oswal has issued a buy rating with a target price of ₹245, citing the company's strong quarterly performance and growth prospects.
Sapphire Foods India Limited delivered its strongest quarterly performance since the Covid era, with consolidated restaurant sales rising 20% year-on-year to ₹888 crore for the quarter ended September 30, 2026 (Q2 FY27). According to reports from The Hindu BusinessLine and Business Standard, the company achieved its best quarter for both revenue and adjusted EBITDA growth in the last 16 quarters. The company's net loss contracted significantly to ₹1.5 crore in Q2 FY27 from ₹12.8 crore in the same period last year, marking a substantial improvement in profitability. Revenue from operations rose to ₹888 crore in the September quarter from ₹742 crore a year earlier. EBITDA increased 24% to ₹126 crore from ₹102 crore in the previous year, with EBITDA margin expanding to 14.2% from 13.8% in the year-ago period. The company announced on October 22, 2026, that its Board of Directors approved unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2026.
Tamil Nadu is emerging as a potential model for Pizza Hut's turnaround in India, with Sapphire Foods reporting stronger sales growth and improved restaurant-level earnings performance in the state. The company's strategy centres on a dine-in-led omnichannel approach, with an emphasis on food quality and the restaurant experience. Sapphire has been pursuing this approach for about two years and has focused additional investment on Tamil Nadu over the past year. In the latest quarter, Pizza Hut India delivered 5% revenue growth with same-store sales growth of 5%, the highest in seven quarters, aided by value offers including a ₹99 four-course meal and buy-one-get-one deals. However, restaurant EBITDA remained negative at -2.8%, worsening by 100 basis points YoY due to elevated energy costs. The company highlighted late-night promotions, additional marketing spends and the launch of its Triple Spice Pizza among the initiatives supporting Pizza Hut's sales performance.
KFC India emerged as the standout performer, posting 26% revenue growth — its highest in 16 quarters — driven by same-store sales growth (SSSG) of 14% and double-digit transaction growth. As reported by The Hindu BusinessLine and Business Standard, the brand's restaurant EBITDA margin improved 70 basis points to 14.5%, despite raw material and energy cost inflation. KFC's store count expanded to 606 from 529 a year earlier. The adjusted profit before tax turned positive at ₹120 million against a loss of ₹43 million in Q2 FY26, though reported PBT remained marginally negative at -₹6 million. For the half-year period, consolidated profit before tax reached ₹142.61 million against a loss of ₹184.22 million in H1 FY26. However, restaurant operators have faced higher costs since the onset of the Middle East conflict, partly due to rising utility expenses, while continued spending on discounts has put pressure on margins.
In January, Sapphire Foods and Devyani International, which also operates KFC and Pizza Hut outlets, announced a USD 934 million merger deal that would create a franchisee with more than 3,000 restaurants. This merger represents a significant consolidation in the quick service restaurant sector and positions the combined entity as a major player in the Indian QSR market. The proposed transaction would bring their KFC and Pizza Hut franchise operations under one company, subject to regulatory and other approvals. At the time of Sapphire's Q2 FY27 earnings call, the company was awaiting Competition Commission of India approval before the two franchise operators could sit down and agree on a common strategy for Pizza Hut. Until then, Sapphire's immediate focus remains on improving sales and performance in its existing business, with Pizza Hut store openings in calendar 2026 to remain largely neutral.
