Sapphire Foods shares rise 9% on heavy volumes as most analysts turn bullish

Sapphire Foods rise 9% on heavy volume trade and majority 'Buy' rating by analysts

Shares of Sapphire Foods, the franchisees of Yum! Brands in India, were sharply higher by 9 percent in trade on March 6, with over 52 lakh shares changing hands, much higher than the one-month daily traded average of 6 lakh shares.

As of 12:00 pm on March 6, Sapphire Foods shares are trading at Rs 334 marking a gain of 8.61 percent.

There are 24 analysts covering the stock as of present, with 19 analysts iterating 'Buy', while two have 'Hold' and three have 'Sell' call. A recent Motilal Oswal's note has reiterated a 'Buy' with a target price of Rs 415.

The company's Q3FY25 earnings showed an 18 percent year-on-year rise in net profit at Rs 12 crore, while the revenue grew 14 percent to Rs 756.5 crore, driven by double-digit growth across three key verticals - KFC India, Pizza Hut India, and Sri Lanka. On the operational front, EBITDA rose 10 percent year-on-year to Rs 134.2 crore, though margins slipped to 17.7 percent from 18.3 percent, impacted by higher operating costs.

At the consolidated restaurant level, EBITDA increased 9 percent, with margins narrowing by 60 basis points to 15.4 percent. Sapphire Foods reported a consolidated net profit of Rs 12.7 crore, while adjusted PAT stood at Rs 19.4 crore, translating into a 2.6 percent margin.

In the third quarter of FY25, KFC India witnessed a 3 percent fall in same-store sales growth (SSSG), although this marked an improvement compared to previous two quarters. Overall, restaurant sales rose 12 percent, though restaurant-level EBITDA margin contracted by 190 basis points on-year to 18.2 percent, largely due to operating deleverage. The company plans to reignite same-store growth by leaning into value-focused core offerings, new product launches, and broader menu options across different meal times.

Pizza Hut India, on the other hand, recorded a 5 percent same-store sales growth, with average daily sales holding steady at Rs 48,000. Total restaurant sales increased 10 percent year-on-year, while restaurant-level EBITDA margin expanded slightly by 10 basis points to 4.7 percent, supported by higher marketing spends aimed at driving visibility and footfall.