KFC, Pizza Hut’s parent company expects 25% revenue growth for next 3 years
Sapphire Foods India, the parent company of KFC and Pizza Hut, reported sluggish earnings for December-ended quarter with revenue seen 17 percent rise, but the quick-service restaurant (QSR) chain operator's margin has contracted on year-on-year basis.
Sapphire Foods India, the parent company of KFC and Pizza Hut, reported sluggish earnings for December-ended quarter with revenue seen 17 percent rise, but the quick-service restaurant (QSR) chain operator's margin has contracted on year-on-year basis.
The company is a leading YUM franchisee operator with presence in India, Sri Lanka and Maldives. It owns and operates 325 KFC and 274 Pizza Hut restaurants in India. It also owns and operates 109 Pizza Hut and 9 Taco Bell restaurants in Sri Lanka. The company runs 1 KFC and Pizza Hut each in Maldives.
In an interview with CNBC-TV18, after the earnings report, Sanjay Purohit, Whole-Time Director and Group CEO of Sapphire Foods said that the company aims to achieve a target of 20 percent margin in KFC and mid-teens margin in Pizza Hut. Purohit has high expectations for both brands.
He said, “Over the long-term, KFC at 20 percent. Pizza Hut today is early-teens, should go up to mid-teens over a period.”
Purohit is confident that the company will see a revenue growth of 23-25 percent and an EBITDA growth of 30-33 percent over the next three years. Despite some demand sluggishness continuing into Q4, he believes that growth has normalized after a strong run of 4-6 quarters.
He said, “This guidance is a general guidance over perhaps 3-4 years, in the region of 23-25 percent, where 5-7 percent will come from same store sales growth and the balance will come from new store expansion.”
In addition, Purohit shared that the business in Sri Lanka is on the mend from an operational standpoint, but he acknowledges that consumer sentiment in the country is likely to remain weak for 2-3 quarters. However, he remains optimistic and expects to see growth in Sri Lanka by the end of this year.
In conclusion, Sapphire Foods India, with its strong leadership and ambitious plans, is poised for significant growth soon. The company's focus on improving margins and achieving revenue and EBITDA growth, coupled with its commitment to maintaining a strong presence in Sri Lanka, is a testament to its commitment to success.
Also Read | Aditya Birla Group to build premium restaurant chains as it enters organised food services market
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