Sapphire Foods' Three Pillars To Drive Growth - Customers, Experience, Accessibility: ICICI Securities

ICICI Securities Report

We met Sanjay Purohit, Group CEO, Sapphire Foods India Ltd. Takeaways:

1. Focus is back on core products, expanding occasions, improving value proposition, driving consumer experience given near-term demand headwinds for KFC and Pizza Hut India while creating higher awareness for PH India through continued higher ad-spends and innovations.

2. Cautious approach towards near-term store expansion for PH while KFC is likely to continue its expansion trajectory (average daily sales trajectory of new stores versus system average is a key monitorable).

3. Incremental focus on building lunch dine-in and late-night occasions through launch of attractive combos.

Operating margins to be under pressure in the near term given cost inflation (raw material, labour etc.) and operating deleverage with a focus on revival of growth-led (operating leverage) margin recovery.

Maintain Add.

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