Dabur vs Sapphire Foods India Q4 FY26

DA

Dabur

Q4 FY26 · Consumer

Dabur India delivered a solid Q4 FY26 with consolidated revenue growth of 7.3% YoY, driven by a strong domestic FMCG performance of 9.5% (volume growth 6%). The HPC portfolio was the standout, growing 17% with hair oils up 28% and home care up 24%. Healthcare ex-glucose grew 12.5%, while beverages saw sequential recovery. Management revised FY27 revenue guidance upward to low double-digits (from high single-digit), supported by price increases to offset 10% input cost inflation. EBITDA grew 8.2% and PAT 15%. Key risks include Middle East geopolitical headwinds impacting international business (2.5% growth) and potential El Niño disrupting summer-sensitive categories. Margin expansion is targeted through pricing, premiumization, and cost savings, though crude-linked inflation remains a watchpoint.

Guidance read

FY27 revenue guidance revised to low double-digit growth: Management upgraded from high single-digit to low double-digit revenue growth for FY27, driven by price increases and volume growth. Domestic business margin expansion targeted: Management aims to improve margins year-on-year through pricing, premiumization, and cost savings, despite 10% input cost inflation. HPC portfolio expected to sustain double-digit growth: HPC portfolio is expected to grow at least double-digit in FY27, with hair oils, shampoos, and home care continuing strong momentum. International business expected to return to double-digit growth: Despite Middle East disruptions, management expects international business to grow in double digits, aided by rupee depreciation and price increases.

Risk read

Key risks include Middle East geopolitical headwinds impacting international business — War in West Asia is causing supply chain disruptions, inflation, and demand decline in the Middle East, which constitutes 30-35% of international business.; El Niño risk to summer-sensitive categories — Unseasonal rains could impact beverages and glucose portfolios, which are heavily dependent on summer demand.; Input cost inflation may pressure margins if price increases lag — Crude-linked raw material and packaging costs are rising ~10%, and while price increases are planned, sustained inflation could erode margins if not fully passed through.; Nielsen data showing FMCG growth moderation — Management noted a dichotomy between strong company results and Nielsen data showing sequential FMCG growth moderation, which could indicate broader demand slowdown..

Promise ledger

Scorecard data is being built as historical quarters are processed.

Sapphire Foods delivered a strong Q4 FY26, with consolidated revenue of ₹790 crore (+11% YoY) and adjusted EBITDA of ₹61 crore (+20% YoY). KFC was the standout, posting 15% revenue growth and 4% SSSG (6% ex-Navratri), its best in 14 quarters, driven by a two-pronged value strategy: a ₹99 burger meal in north/west and BOGO offers in south. Pizza Hut India remained weak with -7% SSSG, but Sri Lanka continued its strong run with 11% SSSG and 15% revenue growth. Management expressed confidence that the KFC strategy is sustainable and that margins have bottomed, with April trends similar to Q4. Key risk: LPG cost inflation could impact EBITDA by 30-50 bps if not managed.

Guidance read

KFC value strategy rolled out to all stores except Tamil Nadu: The 99-rupee burger meal is now a permanent value layer across all KFC stores except Tamil Nadu, driving new consumer recruitment. Capex for FY27 similar to FY26 at ~₹320 crore: Management expects capex spend in FY27 to be similar to FY26, including new store openings, refurbishments, and renewal fees. Merger with Devyani International expected to complete by end of FY27: The merger process is on track for completion by end of this financial year, pending SEBI and NCLT approvals. Sri Lanka store expansion to accelerate to high single-digit or low double-digit openings: Given strong SSSG and margin profile, store openings in Sri Lanka could accelerate to high single-digit or low double-digit per year for next 2-3 years.

Risk read

Key risks include LPG cost inflation impacting EBITDA by 30-50 bps — LPG prices have increased 25-40%, which could impact EBITDA by 30-50 basis points if not offset by price hikes or efficiency.; Vendor partner support may not continue, impacting gross margin 50-70 bps — The 99-rupee burger meal is currently supported by vendor partners; if support is withdrawn, gross margin could be impacted by 50-70 bps.; Pizza Hut India turnaround remains uncertain — Pizza Hut India SSSG was -7% and restaurant EBITDA margin declined; management's strategy is still unproven outside Tamil Nadu.; Sri Lanka macro volatility could disrupt operations — Sri Lanka faces ongoing LPG and fuel shortages; while April has started well, the situation remains fluid and could impact demand..

Promise ledger

Scorecard data is being built as historical quarters are processed.