Mar'25 View on Sapphire Foods India Ltd

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. After falling from 400, the stock fell and has made a double bottom at 290 levels and now at 330 levels and looks to scale past 400 due to following inputs. • Sapphire (SF) reported revenues of Rs756.5 cr (1% beat), up 13.7% yoy. • There was 13.3% yoy increase in store count to 963 stores (Dec-24). • SF expects KFCs same store sales growth to turn positive in next two quarters. • PH witnessed some recovery, as seen in the broader pizza category. • Sapphire’s Q3FY25 EBITDA grew 12% yoy. • Q3 was a decent print in a challenging demand environment. • We expect earnings to grow by 162.5% in FY26E & grow by 118.6% in FY27E. • Stock is currently trading at valuation of 149.0 x P/E FY27E EPS.