Sapphire Foods India Ltd – Q3 FY26: ₹8,138 Cr TTM Sales, 1,028 Stores, Yet Profits Playing Hide & Seek

1. At a Glance – The Fried Chicken Paradox

Sapphire Foods India Ltd is that friend who owns KFC, Pizza Hut, and Taco Bell, has 1,028 restaurants, clocks ₹3,044 Cr in annual sales, yet somehow manages to end the year with ₹-17 Cr TTM losses. Market cap? A crispy ₹6,914 Cr. Share price? ₹215, down 33% YoY, because the market hates indigestion.

Operating margins look decent at ~15% OPM, but ROE is sitting at a sad 2.03%, like a Pizza Hut outlet inside a dead mall. Debt is ₹1,380 Cr, interest coverage barely 0.95, and the balance sheet says: “Yes growth, but EMI bhi deni hai.”

Yet, Sapphire isn’t some roadside momo stall. It’s the largest Yum! franchisee in India & Sri Lanka, ranked among Top 3 Yum franchisees globally, and even flexed a 19.7% restaurant EBITDA margin in FY24. So why the stock pain?

Is this a classic India consumption compounding story delayed by depreciation & debt… or just too many outlets, too little cash?

Let’s open the kitchen.

2. Introduction – When Growth Eats Profit for Breakfast

Sapphire Foods is the poster child of modern Indian QSR investing:
High growth, high capex, high depreciation, low patience from investors.

The company operates iconic global brands licensed from Yum! Brands, which means:

• No brand-building risk ✅
• Global playbooks & digital tools ✅
• Royalty payments forever ❌

Since FY19, Sapphire has aggressively expanded stores, shrunk restaurant sizes by ~45%, pushed delivery to 43% of sales, and turned itself into a logistics + real estate + fried chicken machine.

Revenue has compounded at ~17% CAGR (5Y).
But profits? Still stuck in traffic.

Why?

• Heavy depreciation from constant