Sapphire Foods Q3 Results Review - Strong Delivery In KFC; Demand Challenges Persist: Motilal Oswal

Motilal Oswal Report

Sapphire Foods India Ltd.'s reported 11.6% YoY revenue growth in Q3 FY24, despite 18% store growth. Underlying growth metrics (average daily sales, same-store sales growth) remained weak, but Sapphire’s KFC performance (SSSG, return on margin) was better than Devyani International Ltd.

KFC: Same-store sales declined 2% (flat in Q2) versus a 5% drop for Devyani. ROM was healthy at 20% (flat YoY, plus 90 basis points QoQ) versus. Devyani’s 19% (-70 bp YoY).

Pizza Hut: Performance further deteriorated, with same-store sales down 19% (- 20% in Q2) compared to a 13% decline for Devyani. Rising competition pressure has been impacting PH’s unit economics. ROM was 4.6% (-950 bp YoY, -300 bp QoQ) versus. Devyani’s 6% (down 800 bp YoY).

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