Goldman Sachs has maintained a Buy rating on Sapphire Foods, adjusting the target price down to ₹400 from ₹420, which implies a potential upside of 15% from the current market price of ₹347.50. Key points from the report include:
- Weak KFC SSSG Trends: Sapphire Foods reported a deterioration in same-store sales growth (SSSG) for KFC, with no clear signs of recovery in the near term. The December quarter is expected to see continued pressure on SSSG for KFC.
- Urban Demand Challenges: The company is facing broad-based weakness in urban demand, affecting performance across key brands.
- KFC Margin Pressures: KFC margins are under pressure due to the impact of operating leverage. However, the company maintains its guidance for adding new stores, signaling a focus on long-term growth.
- Pizza Hut Recovery: Pizza Hut’s gradual recovery continues, with revenue in line with expectations, indicating positive momentum within this brand.
- Delivery vs. Dine-In Performance: Delivery remains a key growth driver, with KFC’s delivery revenue broadly aligning with Zomato’s gross order value (GOV). Dine-in performance, however, remains weak.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should perform their due diligence before making investment decisions.
