Sapphire Foods edges up after 3 million shares change hands

Sapphire Foods

Shares of Sapphire Foods India Ltd jumped 2.73 percent in early trade on June 27 after 3 million shares of the company changed hands. At 9.24am, the stock was trading 2.56 percent higher at Rs 1426.25 on the NSE.

One of the major shareholders of Sapphire Foods India diluted the holding through a block deal at Rs 1,345-1,391 per share, CNBC-TV18 reported. The KFC and Pizza Hut's India holder seeks to raise $51 million through placement, the term sheet showed on June 26.

Shares of Sapphire Foods closed 2.38 percent higher at Rs 1,393.95 apiece on BSE. Sapphire Foods is backed by a consortium of leading private equity firms, Samara Capital, Goldman Sachs, CX Partners, and Edelweiss Private Equity, and is managed by a team of professionals.

Sapphire Foods had posted a profit jump of 411.2 percent year-on-year to Rs 135.48 crore in the quarter ended March 31, 2023, as compared to Rs 26.50 crore in the same quarter last year. The company had posted revenue from operations at Rs 560.41 crore, up 12.8 percent from Rs 496.83 in the year-ago period. Sapphire Foods’ India revenue delivered growth of 23 percent. The company EBITDA stood at Rs 98.2 crore, down 1.5 per cent on-year.

Sapphire Foods is one of the largest restaurant operators in the Indian subcontinent, successfully operating more than 400 KFC, Pizza Hut and Taco Bell restaurants across India, Sri Lanka and the Maldives. It was set up in September 2015, by the acquisition of about 250 KFC and Pizza Hut Stores in India and Sri Lanka.

Emkay Global Financial Services has issued a ‘hold’ call on Sapphire Foods India with a target price of Rs 1,380, which is expected to be achieved within a year in a May 13 research report. The company had posted Q4 consolidated total income of Rs 571.80 crore, and its net profit after tax for the same quarter is Rs 135.48 crore. The company's Q4 EBITDA is 7-11 percent below the street's estimates. The company, however, remains optimistic about its near-term recovery and the rollout of new innovations.

Brokerage firm Motilal Oswal is bullish on Sapphire Foods recommended ‘buy’ rating on the stock with a target price of Rs 1585 in its research report dated May 14, 2023.

Sapphire Foods India Ltd stock has given a return of 0.83 percent over the last six months. Thus, underperforming the benchmark Nifty50 index which has given a return of 3.08 percent over the last six months.