'Buy' Sapphire Foods Reiterates Motilal Oswal — Here's Why

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Motilal Oswal Report

Sapphire Foods India Ltd. expects an same-stores sales growth of around 5%, which will help maintain stable overall average daily sales, as new stores typically generate 75-80% of the ADS of existing stores.

However, to drive margin expansion, SSSG needs to grow at a higher rate. With ~5% SSSG, steady ADS, and new store openings, Sapphire Foods is well-positioned to achieve ~15% sales growth.

For KFC to achieve 19% ROM in FY26, SSSG needs to be in the high single digits. Therefore, increasing customer orders, improving brand visibility, and optimizing store performance are key priorities to drive profitability. For FY26, we model ~6% SSSG and 18.5% ROM for KFC, and 6% SSSG with a ~6.5% ROM for Pizza Hut.

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