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.

Sapphire Foods India Limited , a prominent player in the food service industry, has received a demand order from the Central GST and Central Excise authorities in Raipur, Chhattisgarh. The order, issued on September 10th, amounts to INR 1.01 million and pertains to alleged discrepancies in the company's GST filings for the period from April 2018 to March 2019.

Details of the Demand Order

The demand order, issued under Section 74(1) of the CGST Act 2017, raises several allegations against Sapphire Foods India:

1. Availing excess Input Tax Credit (ITC)
2. Incorrect utilization of ITC against GST liability on outward supply
3. Delayed payment of reverse charge payments

Company's Response

In a disclosure to the stock exchanges on September 11th, Sapphire Foods India stated that it is currently evaluating the order. The company plans to take necessary steps to respond to the demand, including challenging it at relevant forums.

Financial Impact

Despite the INR 1.01 million demand, Sapphire Foods India has assured stakeholders that there is no material impact on its financial, operational, or other activities due to this order. The company's statement suggests confidence in its position regarding the allegations.

Regulatory Compliance

It's worth noting that while the amount involved in this particular litigation falls below the threshold limit prescribed for disclosure under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, Sapphire Foods India has chosen to disclose this information. This decision appears to be based on the potential cumulative impact of related matters with similar legal questions or factual circumstances.

Conclusion

As Sapphire Foods India navigates this regulatory challenge, stakeholders will be watching closely to see how the company addresses the allegations and manages any potential impact on its operations. The company's proactive disclosure and stated intention to challenge the order if necessary demonstrate its commitment to transparency and regulatory compliance.