Sapphire Foods India Limited has received a disclosure under Regulation 29(2) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, from GIC Private Limited. GIC, acting as investment manager on behalf of the Government of Singapore (GOS) and the Monetary Authority of Singapore (MAS), executed an open market sale of equity shares in the company on 30 July 2026. The transaction triggered the mandatory disclosure threshold under the SEBI Takeover Regulations.

Pre-Transaction Shareholding

Prior to the sale, GIC collectively held 10,760,638 equity shares of Sapphire Foods India Limited, representing 3.348% of the total share/voting capital and 3.260% of the total diluted share/voting capital. The holdings were distributed between the two entities as follows:

Details of the Sale Transaction

The sale was conducted through the open market on 30 July 2026. A total of 2,350,734 equity shares were sold across both entities, accounting for 0.731% of the total share/voting capital and 0.712% of the total diluted share/voting capital. The breakdown of shares sold is presented below:

Post-Transaction Shareholding

Following the completion of the sale, GIC's aggregate holding in Sapphire Foods India Limited stood at 8,409,904 equity shares, representing 2.617% of the total share/voting capital and 2.548% of the total diluted share/voting capital. The revised entity-wise holdings are detailed below:

Share Capital and Disclosure Background

The equity share capital of Sapphire Foods India Limited remained unchanged at 321,382,905 equity shares both before and after the transaction, as per the shareholding pattern for the quarter ended 30 June 2026. The total diluted share/voting capital of the company stands at 330,112,755 equity shares, as per the same publicly disclosed shareholding pattern.

As per the disclosure, GIC's last filing under Regulation 29(2) of the SEBI Takeover Regulations was dated 12 June 2026, at which time GIC held 16,077,278 equity shares, representing 5.003% of the outstanding share capital computed on the basis of the shareholding pattern for the quarter ended 31 March 2026. Since that disclosure, GIC sold equity shares in multiple non-reportable tranches. The cumulative quantum of shares sold as of 30 July 2026 was sufficient to trigger the disclosure requirement under Regulation 29(2), resulting in the present filing. The disclosure was signed on 3 August 2026 from Singapore by authorised signatories of GIC's Global Investment Services division. GIC does not belong to the promoter or promoter group of the company.

Sapphire Foods delivered a consolidated net profit of ₹140.22 million for the quarter ended June 30, 2026 (Q1FY27), marking a decisive turnaround from the net loss of ₹17.38 million recorded in the corresponding period of the previous year. The profitability swing was fueled by robust top-line growth, with revenue from operations rising 15% year-on-year to ₹8,909.60 million, and improved operational efficiency that expanded the EBITDA margin to 15.8% from 14.6%. This performance underscores the effectiveness of the company’s cost management strategies and consumer recruitment initiatives ahead of its proposed merger with Devyani International.

The Board of Directors approved the unaudited standalone and consolidated financial results on July 24, 2026. The results were reviewed by the Audit Committee and subjected to a limited review by M/s. Deloitte Haskins & Sells, Chartered Accountants, the statutory auditors. The financial statements comply with Indian Accounting Standard 34 (Ind AS 34) "Interim Financial Reporting" and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Financial Performance Overview

On a consolidated basis, total income stood at ₹8,966.31 million, comprising revenue from operations of ₹8,909.60 million and other income of ₹56.71 million. Total expenses amounted to ₹8,804.64 million, including cost of materials consumed (₹2,780.57 million), employee benefits expense (₹1,153.45 million), finance costs (₹319.31 million), depreciation and amortisation (₹973.62 million), and other expenses (₹3,577.69 million). Profit before tax was ₹161.67 million, against which tax expense of ₹21.45 million was charged, resulting in the net profit after tax of ₹140.22 million.

Standalone results also showed a turnaround, with net profit after tax reaching ₹128.67 million compared to a loss of ₹34.04 million in Q1FY26. Standalone revenue from operations increased to ₹7,560.72 million from ₹6,603.95 million in the prior-year quarter. Earnings per equity share on a consolidated basis were ₹0.44, up from (₹0.06) in the previous year.

Operational Highlights and Brand Performance

Q1FY27 marked the second consecutive quarter of strong performance, with restaurant sales reaching ₹8,882 million, up 15% year-on-year — the best growth in the last 11 quarters. Adjusted EBITDA grew by 37% to ₹749 million, the highest growth in 15 quarters, with margins expanding by 130 basis points to 8.4%. Consolidated EBITDA stood at ₹1,406 million (15.8% margin), up 24% year-on-year.

Sapphire Foods added 16 KFC restaurants, 5 Pizza Hut outlets in India, and 1 Pizza Hut in Sri Lanka during the quarter, bringing the total restaurant count to 1,074 as on June 30, 2026. Same-store sales growth (SSSG) was positive across all verticals:

• KFC India: Revenue grew by 17% with SSSG at 5%. Restaurant EBITDA margin improved by 120 basis points to 16.9%, despite high energy cost inflation. Growth was driven by a two-pronged consumer recruitment strategy including the ₹99 Chicken Krisper Burger Meal and Buy-One-Get-One-Free offers on Chicken Buckets. Gross margin improved by 160 basis points over the last quarter due to lower discounts and a 2% price increase.
• Pizza Hut India: Delivered positive SSSG of 1% after five quarters, with Dine-In SSSG also positive. Revenue grew by 3%, though Restaurant EBITDA remained negative at -3.6% due to higher gas costs. Tamil Nadu territory continued to perform well due to targeted marketing investments. Dine-in and takeaway mix remained stable at 50%.
• Sri Lanka Business: Revenue grew by 14% in LKR terms with SSSG of 9%. Restaurant EBITDA margin was 12.0%, impacted by minimum wage revisions and geopolitical conflict-related inflation. Management expects profitability normalization in a few quarters as transaction growth continues.

Strategic Insights from Earnings Call

During the earnings call held on July 24, 2026, Whole Time Director and Group CEO Sanjay Purohit and CFO Vijay Jain provided deeper context on the results. They emphasized that the demand environment has remained similar, with the upside at KFC being a direct outcome of improved sales strategies rather than macroeconomic shifts. Vijay Jain noted that operating leverage typically kicks in at a 3% to 5% SSSG threshold, which covers inflation in wage and other costs. The company has been able to create leverage even at this level through gross margin improvements from reduced discounts and selective price hikes.

Regarding pricing, the company implemented price increases in two installments: 1% in April and 0.5% to 1% in June for KFC, and 1% each in two installments for Pizza Hut. Jain stated that these hikes were carefully managed to avoid impacting consumer sentiment or SSSG, with the aim of managing gross margins rather than increasing average per customer (APC) bills significantly. The company restricts price hikes to 50% to 60% of inflation, managing the rest through supply chain efficiencies.

Merger Progress and Regulatory Approvals

A key development noted by the Board is the progress of the scheme of arrangement between Sapphire Foods India Limited (Transferor Company) and Devyani International Limited (Transferee Company). Approved under Sections 230 to 232 of the Companies Act, 2013, the scheme envisages the amalgamation of Sapphire Foods into Devyani International with effect from April 01, 2026. Under the terms, shareholders will receive 177 equity shares of Devyani International for every 100 shares of Sapphire Foods held.

The company received a 'no objection' observation letter from the National Stock Exchange (NSE) and 'no adverse observations' from the Bombay Stock Exchange (BSE) on June 12, 2026. The scheme remains subject to further regulatory and statutory approvals.

Operational and Structural Updates

Additionally, the Board noted the completion of the shifting of the company's registered office from Maharashtra to Haryana. The Regional Director (Western Region Directorate I) approved the shift on April 21, 2026, and the Registrar of Companies, Haryana, issued the Certificate of Registration on May 18, 2026, recording the new address at SCO 328, Sector - 9, Panchkula. The group continues to operate in a single reportable segment: restaurant operations.

What the Numbers Show

The swing to profitability in Q1FY27 is primarily operational, driven by robust revenue growth of approximately 14.7% year-on-year on a consolidated basis. Notably, there were no exceptional items in the current quarter, unlike the previous year where merger-related charges and labour code impacts had weighed on results. The absence of such one-time costs, combined with margin expansion, indicates a stabilisation of the core business model ahead of the proposed merger. The divergence between consolidated EBITDA margin (15.8%) and adjusted EBITDA margin (8.4%) highlights the significant impact of Ind-AS 116 lease adjustments on reported profitability metrics. Furthermore, the management's focus on driving dine-in and takeaway transactions over delivery suggests a strategic shift towards higher-margin channels, which is beginning to yield results as seen in the improved SSSG across all brands.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE806T01020/16d4fe22d790427a.pdf