Motilal Oswal Assigns Rs 220 Price Target to Sapphire Foods

Sapphire Foods India Sees Revenue Growth in 4QFY26

Sapphire Foods India (SAPPHIRE) has reported a revenue growth of 11% year-over-year (YoY) in 4QFY26, meeting market expectations. The company's performance was driven by growth in its KFC business, which saw sales increase by 15% YoY.

The KFC brand also reported a same-store sales growth (SSSG) of 4%, slightly below the estimated 4% growth rate. However, excluding the impact of Navratri, the SSSG rate was 6%, indicating a strong performance in this segment. In contrast, the Pizza Hut (PH) franchise remained weak, with revenue dipping 6% YoY due to a decline in same-store sales of 7%, which was slightly better than the estimated 8% decline.

In a notable development, Sapphire Foods' operations in Sri Lanka reported a healthy revenue growth of 16% YoY, driven by an 11% same-store sales growth (SSSG) in local currency (LKR) and 7% store growth.

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Outlook and Recommendations

With the Competition Commission of India (CCI) approval likely to be received within the next 35-40 days, Motilal Oswal reiterates its BUY rating on the stock with a target price of INR220, based on a price-to-earnings ratio of 18 times the company's estimated earnings before interest, depreciation, and amortization (EBITDA) for March 28, 2028.