Brokerages Maintain Positive Ratings on Pizza Hut and KFC Operator Sapphire Foods Despite Profit Decline
Despite a 98% YoY profit fall, brokerages uphold positive ratings on Pizza Hut and KFC operator Sapphire Foods, citing a cautious expansion strategy and revenue growth.
Sapphire Foods Maintains Positive Ratings
Sapphire Foods reports a profit of Rs 2.39 crore for the quarter ended March 31, with a 16% YoY revenue growth despite a 26% YoY store growth. Pizza Hut's revenue declined by 3% YoY.
Quarterly Performance
Sapphire Foods plans to double Pizza Hut stores in nearly four years, focusing on growth at existing stores and brand revival through increased marketing. No new Pizza Hut stores were added during the quarter.
Expansion Strategy
Quick-Service Restaurants (QSRs) face challenges in unit economics, with dine-in experiencing more pressure than delivery. KFC demonstrates resilience, while Pizza Hut struggles due to intense competition.