Street View: India's Sapphire Foods slides as cost pressures cloud margin outlook

Sapphire Foods India

Today 10:21

** India's Sapphire Foods SAPI.NS reported narrower Q2 net loss of 15 million rupees (around $158,000), compared with 127.7 mln rupees a year earlier
** EBITDA margin fell to 14.3% from 15.7% sequentially
** Co's shares slide as much as 4.9% to 186.30 rupees

RISING COSTS THREATEN MARGIN RECOVERY
** UBS ("buy", TP: 250 rupees) says stronger-than-expected sales growth, driven by value offers and a favourable festive calendar, could come at the expense of margins as food, wage and energy costs rise
** JPMorgan ("overweight", TP: 230 rupees) says inflationary pressures are likely to peak in Q3FY27, weighing on near-term margins even as value offers drive customer growth
** BofA ("underperform", TP: 185 rupees) says growth through discounts and higher spending is likely to keep earnings under pressure; cuts FY27-FY29 earnings estimates by 1%-6%
** Dolat Capital (downgrades to "reduce" from "accumulate"; cuts TP to 200 rupees from 210 rupees) says inflation and higher marketing spending could limit profitability improvement despite strong KFC sales; trims FY27-FY29 EBITDA estimates by about 2%



($1 = 94.9400 Indian rupees)

 (Reporting by Surbhi Misra in Bengaluru)
 ((Surbhi.Misra@thomsonreuters.com |  X: https://twitter.com/SurbhiMisra_  |;))