Sapphire Foods India Ltd. , the operator of Pizza Hut in India, has announced a suspension of its expansion plans following weak performance metrics in the second quarter. The company, which manages nearly 1,000 KFC, Pizza Hut, and Taco Bell restaurants across India and Sri Lanka, is facing challenges in its Pizza Hut segment.

Key Performance Indicators

Expansion Plans on Hold

Despite an increase in the number of Pizza Hut outlets from 323 to 338, Sapphire Foods has decided to halt its expansion plans. This decision comes after:

• Opening 20 new Pizza Hut stores in the previous fiscal year
• Recording a net decline of one store in the current fiscal year

Management has stated that expansion will remain suspended until same-store sales growth and profitability show signs of recovery.

Marketing Efforts

In response to lower consumer demand, Sapphire Foods has increased its marketing investments beyond contractually required levels. This move aims to stimulate sales and attract more customers to Pizza Hut outlets.

Outlook

The company faces significant challenges in the competitive fast-food market in India. The decline in same-store sales growth and average daily sales per store indicates a need for strategic reassessment. Sapphire Foods' decision to pause expansion and focus on improving existing store performance demonstrates a cautious approach to navigating the current market conditions.

Investors and industry observers will be closely watching Sapphire Foods' performance in the coming quarters to see if these measures lead to a turnaround in Pizza Hut's sales and profitability in the Indian market.

Sapphire Foods India , the operator of KFC and Pizza Hut restaurants in India and Sri Lanka, has reported its financial results for the first half of fiscal year 2026, showing revenue growth but a shift to net loss. The company also announced a change in its board composition.

Financial Performance

Sapphire Foods India reported the following consolidated results for H1 FY2026:

Note: All figures in million rupees

The company's revenue from operations grew by 7.45% year-over-year. However, Sapphire Foods swung to a net loss of Rs 145.25 million in H1 FY2026, compared to a profit of Rs 19.48 million in the same period last year.

Standalone Performance

On a standalone basis, Sapphire Foods India reported:

• Revenue: Rs 12,764.67 million (H1 FY2026) vs Rs 12,080.91 million (H1 FY2025)
• Net Loss: Rs 207.06 million (H1 FY2026) vs Rs 61.19 million (H1 FY2025)

The standalone results also reflect a growth in revenue but a significant increase in net loss.

Key Financial Metric

• Basic Earnings Per Share (Consolidated): Negative Rs 0.45

Corporate Governance Update

The company announced that Mr. Rohitt Mutthoo has resigned from his position as Non-Executive Nominee Director. Mr. Mutthoo represented the promoter shareholder Sapphire Foods Mauritius Limited on the board. The resignation, cited as being for personal reasons, was accepted by the Board on October 17, 2025.

Market Implications

While Sapphire Foods India continues to grow its revenue, the shift to a net loss position may raise concerns among investors. The company appears to be facing challenges in maintaining profitability despite top-line growth.

Investors and analysts may look for more details on the company's strategy to return to profitability while maintaining its growth trajectory in the quick-service restaurant sector. The resignation of a board member representing a major shareholder may also attract attention and raise questions about the company's governance and strategic direction.