Ladies and gentlemen, good day and welcome to the Sapphire Foods Q4 FY 2026 earnings call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Sanjay Purohit from Sapphire Foods. Thank you and over to you, sir. Good afternoon, everybody. Welcome to the quarter four and full year 2025-2026 business performance highlights. I'm joined by my colleague and fellow board member, Vijay Jain, who's our Executive Director and CFO. Both of us will take you through the presentation. Quarter four FY 2026 has been our best quarter in the last 12 quarters iAn terms of both SSSG and Adjusted EBITDA growth. This has come on the back of a strong new consumer recruitment performance by KFC, as well as strong performance in Sri Lanka also. You will all know this is despite the LPG related availability that we have faced both in India and Sri Lanka and some inflationary challenges. I think this uplift in performance is really encouraging as we move into the new fiscal. We delivered a revenue of INR 7.9 billion with 11% growth Y-o-Y in the quarter. Revenue for KFC grew by 15%, which is the highest in the last eight quarters, and Pizza Hut India revenue declined by 6%. Sri Lanka grew in revenue by 15% in LKR. In the quarter, we added 19 KFC restaurants, two Pizza Huts in India and three Pizza Huts in Sri Lanka. Our total restaurant count was 1,052 as of 31st March 2026. Our consolidated restaurant EBITDA grew 21% year- on- year, and margin was 13%, up 100 basis points. Adjusted EBITDA was INR 61 crores or INR 610 million, grew 20% year- on- year, and consolidated Adjusted EBITDA was 7.7%. Consolidated EBITDA post Ind-AS was INR 125 crores or 15.8%. This grew 10% year-on-year. It's actually down 20 basis points. Consolidated adjusted PBT before exception was INR 8 crores, 1.1%. PBT before exception was - INR 2.7 crores or -0.3%. [Consolidated] PBT with exceptional items was - INR 15.5 crores or -2%. These exceptional items include the impact of INR 6.2 crores on account of labor code changes and INR 6.6 crores towards merger related costs, really the ease of modification for employee retention. Let's look at the full year numbers. Full year numbers, we delivered 8% revenue growth, clearly the quarter at 11% was better than the full year numbers. Adjusted EBITDA declined at 9%, by 9% at 7.6%, 150 basis points down. KFC grew by 11% with a restaurant EBITDA of 16.3%, down 100 basis points. We opened 73 KFC restaurants during the year, 575 total restaurants. Pizza Hut revenue for the year declined by 7%, revenue of INR 507 crores with restaurant EBITDA -3.3%, 570 basis points below last year. We opened seven restaurants during the year, total of 341 restaurants. Sri Lanka business grew 16% in LKR terms with restaurant EBITDA of 14.9%, down 50 basis points. We opened nine restaurants during the year. 136 is our total count in Pizza Hut. The KFC performance has been driven by the two-pronged consumer recruitment strategy. Plus with the merger announcement with Devyani International, we think that this will enable a unified brand strategy on both the brands, and this future proves the growth in the coming years. I'm going to go straight to KFC on page number 19. As I said, KFC SSSG grew at 4%, 6% without the impact of Navratri. Navratri last year, two days were in March and seven days were in April. This year entire Navratri was in March. Underlying growth is 6%, and the 6% is highest in 14 quarters. It really bodes well. There's a clear two-pronged consumer recruitment strategy for the more evolving markets where chicken consumption is slightly lower than the more developed chicken consuming markets. Our recruitment strategy of advertising plus an entry-level burger meal is working really well. This is being promoted only in our dine-in takeaway channels, it is really driving SSSG. Then in more developed markets, we have got disruptive value at a higher price point. We ran a BOGO, four pieces of Hot & Crispy, four free, and eight pieces of Hot & Crispy, eight free. Quite incredibly, this is also driving new consumer recruitment in some way. This is only in select markets on one day in the month, only on dine-in and takeaway. From an innovations perspective, we have had two big innovations. Typically, we used to run three to four innovations in a year. We have upped our innovation intensity. Dunked, many of you would have tried, which is a global saucy concept where sauces are not added over the chicken, but the entire piece of chicken is dunked into a pot of a sauce, and it tastes absolutely fantastic. Then we launched this KFC Shawowrma innovation, which has also done really well. I'm moving to the digital agenda. Our Digital Kiosks now have been implemented in 73% of restaurants, and clearly there's an APC upside that we get from the kiosk compared to what we would get at the counter. You can see some of the new stores that we have opened, Epicah Mall in Delhi, Punjab, Sathyamangalam in Tamil Nadu and Mumbai. Quickly, Vijay will handle the numbers, the financial numbers. I'm on slide 25. Channelwise sales mix. After a few quarters of declining trend in dine-in and takeaway channel mix, we are seeing a really healthy performance on that front. The dine-in and takeaway mix for the quarter remained stable, at 57%, same as last year. This was on account of improved performance we have seen in those channels, backed by the value campaigns which Sanjay spoke about, which are exclusively available in dine-in and takeaway channels only. From an SSSG point of view, 4% SSSG, 6% ex-Navratri, and overall revenue grew by 15% with addition of 19 stores in the quarter. Gross margin improved by 70 basis points over last year and remained similar to the previous quarter three. This, along with the operating leverage which we generated out of positive SSSG, meant that we improved our restaurant EBITDA by 110 basis points, which came in at 16.8%. Slide number 28 gives the four-year and five-quarter trends. While the annual restaurant margin dropped by 100 basis points, the last two quarters, quarter 3 and quarter 4, saw an improvement in margin, which was generated on the back of positive SSSG. This augurs really well as we move on to the new fiscal year. Let me take the Pizza Hut business performance. It continues to be challenging. However, our strategy of dine-in-forward omni-channel with emphasis on great food and great dine-in experience, it continues to deliver the double-digit SSSG and EBITDA delta in Tamil Nadu, the only exclusive Sapphire market versus the rest of the country. We believe very strongly that this is the playbook for the future. For our number two brand, we've got to invest behind advertising, creating top of mind and consideration amongst consumers, and there is a big market share play that is possible. Vijay, the financial numbers, please. Slide number 34, the channelwise sales mix. Dine-in and takeaway mix for the brand came at 49% and delivery at 51%, which has largely remained stable quarter-on-quarter and over last year as well. From a SSSG perspective, -7% and overall revenue declined by 6% for the brand. Gross margin improved by 40 basis points over last year. However, restaurant EBITDA declined and came in at 6% on account of operating deleverage. Slide number 37 gives the four-year and five-quarter performance. It can be seen that the overall performance for the brand continues to remain a challenge. However, as mentioned by Sanjay, that Tamil Nadu delivered double-digit delta on both SSSG and restaurant EBITDA performance, and this acts as a playbook for the future. Our Sri Lanka performance was very healthy. We delivered our sixth consecutive quarter of double-digit SSSG, along with healthy transaction growth. We opened nine restaurants during the financial year. This has been our highest over the last three years, and this really shows that Sri Lanka is a highly promising market for Pizza Hut. We should be able to continue this restaurant pace of expansion going forward in the next two, three years. Slide 41, channelwise sales mix. Again, in Lanka as well, our dine-in and takeaway mix remains stable and healthy at 62%. From SSSG perspective, 11% for the quarter, which was from a revenue perspective, 15% in LKR and 16% in INR terms. Gross margin improved by 290 basis points, and this was a combination of reduction in discount as well as increase in price. We had a margin which came at 14.6%, down by 20 basis points. The entire benefit of the operating leverage because of the SSSG did not flow through the bottom line on account of high minimum wages being experienced in that particular country, and there were two increases last year. Slide number 45 gives four-year and five-quarter trend. As can be seen, the business continues to deliver healthy performance, and we continue to retain and consolidate our number one QSR position in the country. Our business performance in terms of numbers comes on the back of certain foundational work that we do. Last time I said that we have been ranked the number one QSR in the country and the number three QSR in the world on ESG metrics as per the Dow Jones Sustainability Index. This is a matter of great pride for us. The two areas where we perform outstandingly well are in the social and governance areas. Indeed, when we look at our social scores, there's another validation of the you know, unique culture that we have at Sapphire. We've been recognized by Gallup as an exceptional workplace in the world. This is among the about 70 companies around the world who have been recognized in this manner. To qualify for this also, there is a need to be among the top quartile of all companies globally on employee engagement scores for four to five years in a row. Only then does Gallup invite you to take part in this. We took part, and we were recognized as a Gallup exceptional workplace. Only Indian QSR organization recognized in the country. Only four Indian organizations recognized globally. With this, we conclude our numbers and our business performance highlights. Again, the quarter performance, especially on KFC as well as on Sri Lanka bodes well as we get into the new fiscal. April also is trending similarly, and that gives us confidence for the new fiscal. I want to reiterate here the KFC performance is work that has been done to improve new consumer recruitment, and you would have heard me speak about this several times over the last quarters. It has taken us time to find the right marketing mix to deliver on this intent. We think we've got it now, and that's very heartening. Over to y'all. Now over to you for questions. Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Please note in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Okay, let's go, Ikra. The first question is from the line of Saurabh Kundan from Goldman Sachs. Please go ahead. Thank you, Sanjay and Vijay, for the presentation. I want to ask you, are these value initiatives in KFC now rolled out across your network, especially the North and West, where you have the INR 99 initiative? We started it, Saurabh, in about 150 odd stores in the month of November, December, then rolled it out to perhaps 200 stores in January, February, March. As of April, all our stores, except our Tamil Nadu stores, are running this new consumer recruitment value offer. It's not a promotion. I want to underline this. It's not a promotion. This is a permanent value layer that we are building. Yes. Yeah. Yeah. As of April, we've covered North and West. South, we are implementing a different strategy. Understood. Understood. What's the same-store transactions growth that you are seeing? If you could remind us what the trend has been last, let's say, four quarters. We have not given out the numbers, yes, our SSSG has been closer to the SSSG performance in the previous quarter. It follows a similar trend line. It is closer to our SSSG performance. All right. All right. Last question from me. You've also stepped up marketing in KFC. Could you give us an idea the margin that we are seeing in KFC, the restaurant margin, how much has the marketing and ad spend gone up as a percentage of KFC sales? What was it earlier and what is it now? Earlier as in before these initiatives were introduced. While I'm not giving out the exact number, anywhere between 75 basis points to 100 basis points additional marketing spend we have put behind the brand. We have put. Additional. The regular amount which we end up spending, as per the contract, this is over and above the regular amount. All right. This will continue as long as, I mean, this becomes a permanent, you know, right? Higher advertising. Whether it becomes permanent or not, right now the focus is on getting the transactions and getting the SSSG. Marketing investment or the gross margin investment right now becomes a bit secondary in terms of the focus. As long as we're able to get a positive SSSG and transaction and thereby finally create an accretive bottom line, I think that's the focus area. Got it. Can I just ask one more question on gross margin? Yeah. In the previous quarter you were not fully rolled out. Yeah. You are fully rolled out, yet your gross margin is similar to the previous quarter. Yes. Is there any price hike as well involved here? The primary reason is that this particular offer has been also supported by our vendor partners as well. As a result, we've been able to hold on to the gross margin. That's the reason. Having said that, if I look into the future and if the vendor partner support goes away, we expect a gross margin impact of anywhere or a gross margin investment of anywhere between 50 to 70 basis points. That's our estimate. All right. Thank you so much. Thanks a lot. Yeah. Thank you. The next question is from the line of Tejas Shah from Avendus Spark Institutional Equities. Please go ahead. Hi, Sanjay, Vijay. Thanks for the opportunity. Hi. The last quarter had two distinct shades in terms of operating environment. January, February, at one end and March was very volatile, especially on operational front. Despite that, numbers came out very well, compared to what the quarter was painted operationally. Just wanted to know, January, February had a very good momentum which got disrupted, I'm assuming got disrupted in March or was it uniform throughout? March was also good. I would say, while there was disruption on LPG and indeed the significant inflation that has happened on LPG, the. We were still able to manage to keep our stores alive. Now that when I'm, when I say the manage, it's a day-to-day activity, so our teams on the ground just do an incredible amount of work. We have not, store closures have been restricted significantly, in wherever we have still been able, in some cases we've been still been able to operate with a truncated menu. Yeah. Sir, how the current operating environment. Just to add to that, KFC had zero closures. Okay? While availability was a challenge, I think we've been able to manage the situation quite well. There was a zero closure on KFC, and there continues to be zero closure on KFC. Few stores would have been impacted by truncated menu, few stores would have been impacted by truncated timings, but those are a handful of the stores. Hence, March went very well from that perspective. In Pizza Hut, we had closures which I would say for 10 days, 15 days, but the number of stores would be less than 5% of the overall brand for Pizza Hut. The bigger challenge right now is the LPG price, where the impact could be anywhere between 25% to 40% increase in terms of the cost, which could impact the EBITDA by 30 to 50 basis points. As long as we're able to keep the store open, I think that 30 to 50 basis points impact right now in relative theory it's not so material. Sure. Sir, there are consensus expectation on energy price increase coming quarters or coming month. Any price hike that you have planned or already rolled out? In general, if inflation picks up, what will be your strategy? Inflation is coming after long time. Currently for KFC, the price hike has happened in the range of 1%, and in March also a small amount of price hike happened. If I add up both the price hikes, it's in the range of 1.5%-2% price hike for KFC. Similar price hike is taking place for Pizza Hut or has taken place for Pizza Hut as well in the month of April, round about 2%. We don't see any further price hike in the immediate future unless we see the situation at the ground going dramatically southwards, where the raw material prices or for that matter specifically oil prices go out of the whack. Unless that happens, we don't see any other price hike happening in the near future. Perfect. Just one clarification. On the reply to previous participant question, you said that despite the broader rollout of the value offering, the margins did not come under pressure because it was supported by vendor partners. I thought this was largely for dine-in, right? Dine-in and takeaway. When I say vendor partners, the raw material suppliers, the suppliers of the chicken, f ries and the beverage partners. Largely the fries and beverage partner. They cross-subsidize this, is it? Yes. Yes. Because they get volume. They get substantial volumes. Okay. Okay. That's all from my side. Best wishes for the coming quarter. Thank you. Thank you. The next question is from the line of Gaurav Jogani from JM Financial. Please go ahead. Thank you for taking my question. My question is with regards to KFC again, and specific to margins. Would it be prudent to say that, you know, you are confident in terms of the new strategy and the way you have managed the cost, that the margins now have bottomed out and we can see only a recovery in margins going ahead? Sorry, if you can. The margins have what? If you can come again. Have they bottomed out at the margins? Have they bottomed out, and can we only see recovery in margins going ahead despite, you know, the raw material inflation, et cetera? Yeah. As long as we're able to hold onto the SSSG, we feel confident that we should be able to hold or improve the margins. The SSSG is the key, and that's what we've been saying for last two years. The drop of margin has been a direct result of lack of SSSG for last two years. Yes, the Q3 and Q4, the moment we hit the SSSG, it has helped us improve the margins. Yeah. There are two margins, one gross margin and restaurant EBITDA. He was, Vijay was mentioning restaurant EBITDA. I guess you are referring to restaurant EBITDA margin itself, right? Yes. That is what I was allu ding to. Yes. Yes. Yes. Yes. Sir, just further on this, you know, given that, you know, now we have a very low base to hit and also the strategy is starting to work for us, how is your confident of, you know, how confident are you of achieving mid-single digit kind of an SSSG in KFC over the next couple of years? I don't think the confidence comes from the low base. If that was the case, I think for last three years we've been still struggling, right? Every year we think the base has gone low, and yet it was now three years for us to get a 4% SSSG. The confidence does not come from the low base, it comes from the strategy which is right now working at the ground, which has been now in operation for last four months or so. We have been quite cautious of expanding from 150 stores to 220, now to 400+ stores. I think that the traction at the ground gives us the confidence and the way the April has also gone so far gives us the confidence that we should be able to deliver reasonable SSSG as we move forward. Sir, that is what I meant actually. You know, what I was trying to ask you is that, what has really worked in changing that traction? Is it your strategy that is working? Is it the consumers are coming back? Are you seeing a shift in the consumer sentiment that is helping? What is actually leading to this recovery? It's a combination of two things. Certainly we believe the consumer environment from a demand perspective has certainly improved in quarter four, and this is what we were alluding to when we had a quarter three con call as well. That, backed by our specific strategy in terms of driving consumer recruitment, the twofold strategy, which is INR 199 Chicken Krisper Burger Meal for driving customers or recruitment in North and West, which is the more or less developed or less evolved markets in terms of chicken eating pattern and another, which is the abundant and disruptive value. I think this has clicked and it has not been easy to be fair. Over last one and a half years, we did several experiments, several pilots. We did that Epic Saver campaign as well. We ran it for the first time then. It has been hit and miss. Good part is that we have finally been able to arrive at something which has clicked with the customers, resonate with them, and we are able to see traction. That gives us the confidence. Okay. Just one last question on the Sri Lanka bit. You know, Sri Lanka has also faced challenges in terms of LPG shortages and the intensity of the issues there were a bit higher versus India. How do you see Q1 so far panning out for Sri Lanka especially in the margin profile? It's a tough situation from being able to manage both fuel for our transport vehicles as well as LPG. The quarter has started okay, has started well only, but we've got to see how it lands over the next, you know, couple of weeks. This LPG situation is ever-evolving situation. It's very difficult to say how the quarter looks like taking that particular parameter into consideration. That's evolving in India as well, that's evolving in Sri Lanka as well. It was the question more in context of, are the consumers also feeling the pain and have they, you know, cut down on their discretionary spends in any way, which then could have a ripple effect on the demand? From that perspective, I think the April has gone reasonably okay. Of course, we have been delivering double-digit SSSG for last two years, so it's a really high base, so coming out of that kind of a base, but yet we continue to deliver positive SSSG in April as well. Okay. Okay. Thanks. That's all for now. Thank you. The next question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Yes, sir. Hi. Thanks for taking my question. Sir, first we wanted to understand this April commentary. When you say trends have continued, you mean the overall quarter SSSG trends or the comparable SSSG trends? Maybe if you could help me better understand that comment. Sorry, when you say SSSG, you are asking SSSG trend, what does it mean? For April. Yeah, so the— Yeah. For the quarter, we delivered 4%, ex-Navratri 6%. That kind of momentum we are seeing in April as well from a SSSG point of view. Okay. Vijay, that loss that happened, which got preponed to Q4, that should have benefited you, right, in EBITDA? I, so I'm calling out in a way like- for- like scenario. Just like 4% becomes 6%. I'm comparing on both sides, I'm comparing the underlying number is ex-Navratri benefit or ex-Navratri impact, whichever the quarter you're looking at. I'm stripping that off. Okay. Okay. Underlying consumption, if we say for Q4 was 6%, then in Q1 also that similar trend is sort of shaping up, right? Like- for- like. Keeping it similar, yes. Okay. Vijay, a few, sort of, clarification from balance sheet front. I noticed that, in financial assets, both current and non-current, if we combine them, there is some INR 100 crore increase, right? What can this be attributed to? Right now that balance sheet which we are facing is a post Ind-AS 116 impact. There are lot of other impacts in terms of how lease accounting comes into the picture, how right of use comes into the picture, the tenure of the agreement. Right way to be able to look it after stripping of that particular impact. Maybe in that case we can take this question offline. You can connect with us separately. Okay. Sure. From a CapEx perspective also, there is about INR 320 crore of CapEx that we have done, and we have opened about 90 odd stores. How should we see this? Because it seems to be a tad higher, right? The CapEx has three components which are material components. One is of course the new store opening. It also has a component on the refurb CapEx, which every five years and 10 years a store needs to be refurbished as per the agreement. There's also a renewal fee which comes into the picture now, apart from the initial. Renewal fee because now as a Sapphire we have completed 10 years, there is a renewal fee component which kicks in every year. It's not just the CapEx on the stores. These are the several components which adds up to the overall CapEx. When I look at the coming year, we see a similar number of CapEx, similar number in terms of the CapEx spend for FY 2027 as well. Okay. Possible to break them into the three buckets, broad numbers, if you could help us understand? From initial fee or a renewal fee, we are not allowed to share that number publicly, to be fair. Okay. Yeah. Okay. Yeah, got it. Thanks for taking my call. If you are trying to do a modeling, we have always called out what the kind of a KFC number looks like per store, right? KFC number looks like anywhere between INR 2.1 crore-INR 2.2 crore per store. That's pure CapEx, without any initial fee or renewal fee as a part of it. The Pizza Hut, we have always called out that per store CapEx looks like INR 1.35 crore-INR 1.4 crore per store. That's the number you can look at from a modeling perspective. No, that's fair. That number must be INR 170 crore-INR 180 crore, right? Yeah. There is additional INR 140 crore of CapEx that has been done. That was what I was inquiring about. Yeah. Also what gets probably missed out in this is, let's say the store closures. In Pizza Hut, while the store opening for the calendar year 2025 was zero, there were close to 15 to 20 stores which we shut down and we opened something else. That's another angle which gets missed out in the overall CapEx when we are looking at overall number. Yes, largely these are the components. Got it. Yeah. Thank you, Vijay. Thanks. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi team. Two questions. First, you know, this April SSSG of almost about 6%, you know, is a very stark contrast with what, you know, other discretionary peers are at least suggesting that there is a cautious consumer sentiment post Iran conflict. Just wanted to kind of get your thoughts on whether this strength is more due to what we have done. Would it be right? Is it also like because the industry is going up? You know, any thoughts or any, you know, if you could give some thoughts over here, please. Thank you. Just to correct, you said that April SSSG of 6%, I never quoted April SSSG of 6%. Sorry, sir. Yeah, similar, sir. Yeah. I wanted to clarify before Sanjay pitches in. Yeah. I wanted to understand, Avi, what are other people saying? Because we don't have access to that. You seem to have better access. At this moment, from our perspective, I mean, if I look at the change that has happened from, say, quarter three to quarter four and April, something that we are doing seems to be working undoubtedly. Let's see as to how this pans out. No, Sanjay, where I was coming from is, you know, if I were to look at other apparel retailers, you know, not exactly comparable, but they have kind of stated that there is a some sign of a caution in the consumer sentiment. Hence I was, you know, I was just trying to kind of read maybe from a food industry perspective whether there is a moderation that has been seen by other peers, which you have bucked the trend, and that is where the context. You know, the impact from your initiatives is actually very strong. Any sense over there if you could give? We believe that it is work that we have done. We are the first to go off the blocks in terms of announcing full year and Q4 results. We will wait for all other results before making a definitive statement there. Okay, sir. In that sense, the other bit that I wanted to kind of understand is more from, you know, a structural thing. You know, while it's encouraging to see KFC deliver 15% growth, you know, when I contrast it with aggregators, you know, like Zomato just kind of reported today as well, they saw almost 19% NOE growth. Wanted to get your thoughts on this, on how do you see this gap in growth rates behaving over the, over time? I guess if we have to, I've not seen the internal numbers. One of the things that we just got to check here is how much is coming in from both advertising revenues and improved take rates. I'm not making any judgment on either front, but without seeing this, it's difficult to comment. I mean, if we look at our own business with the aggregators, it is in line more or less with, you know, with our overall SSSG numbers. Having said that, what's different this quarter has been the performance of the dine-in and takeaway. The delta which used to exist between the dine-in and takeaway vis-à-vis delivery, that has certainly reduced by a big margin. Also over the last one and a half years, or two years for that matter, our own channel, own delivery channel, our own app performance has continuously exceeded the delivery partners in terms of the SSSG and the growth. That's by quite a bit of margin in terms of the performance of our own delivery app vis-à-vis aggregators. Would it be okay if I read this comment as over time, the way we would foresee is our growth rate as a brand could kind of at least equal or become ahead of aggregator industry growth. Is that something that you see panning out? Very difficult to comment. In the very long run, eventually the brand and the aggregator growth rate has to fall in the same line, right? As long as there is kind of arbitrage which is available. For today also in India, the delivery convenience comes at a price which is slightly lower. We have seen in more developed markets that over a period of time, the cost of delivery eventually goes up and then the arbitrage available to few of the customers who look at it from a dine-in versus a delivery channel just goes away. In the very long run, we expect the mix to stabilize. Now when will that happen? It's very difficult to comment. Fair enough, sir. That's all from my side. Thank you very much for these comments. Thank you. The next question is from the line of Rehan Saiyyed from Trinetra Asset Managers. Please go ahead. Hello. Good evening, your team, and thanks for taking my question. Sir, I want to just get understanding regarding your Sri Lanka business. Despite macro volatility, Sri Lanka has delivered consistent double-digit same-store sales growth. How much of this is structural market share gain versus recovery rate normalization? Also, do you see any opportunity to accelerate store addition in Sri Lanka given the stronger profitability profile relative to India? Yes, the country has gone through a multiple macro or geopolitical situation impact starting from few years ago, where the economy went down dramatically. Prior to that there was a COVID impact. Now this geopolitical situation. Yes. Something or other has been going on. It's I think the strength of the brand and the organization structure which we have at the ground that has helped us tide over the situation. Also I think the belief in the value strategy, one of the very strong things which we have done over the last two years in Sri Lanka also, that we have not taken price increase in line with the inflation that country had seen. One or two years, one and a half years ago, the country saw a combined inflation of almost 90%, 95% over a period of 18 months. At that time also our price increase was restricted to 50% odd. A huge focus on making sure that we make our products more affordable in terms of value. That has played a really big hand in helping us drive this double-digit SSSG. This of course backed along with the innovations which we have done over the years, be it Melts. While Melts started off well in India and then it lost momentum because of the lack or lack of the marketing budget. In Sri Lanka we continued to back it for a very long time. Those kind of innovations have also helped us deliver the double-digit SSSG. From a store opening point of view, I think we have opened nine stores this year, which is highest in the last three financial years. I think from where we are in terms of the margin, the SSSG, the overall business condition, we should be able to accelerate store expansion as well in Sri Lanka, which could be anywhere between, let's say a high single digit or a low early double digits as well. That's possible for the next two to three years. Okay. Okay, fair enough. I mean, that's it from my side and good luck on the quarter. Thank you. Thank you. The next question is from the line of Bharat Gianani from MC Research. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, you mentioned that, in quarter four, the LPG well, the KFC level zero closure, and fused about 5%— I'm sorry to interrupt, Bharat. Can you please use your handset more? Okay, okay, fine. I'll do that. Thank you. Sir, is it better now? Hello. Yes, it's better. Yes, please proceed. Yeah. Sir, my question is that, you have given comments on the LPG shortage leading to about zero closure in KFC and approximately 5% stores in Pizza Hut. That was for quarter four. Sir, just wanted to check on the current status, I mean, what you are seeing on ground. Is the situation same as quarter four or has it worsened or has it improved? Just wanted your comments on that. While you're saying quarter four, I'm just clarifying that it's the situation was March, Jan, Feb went comfortable. March was also while availability was lesser of an issue than the inflationary energy prices or the gas prices were of more of a concern. The April remains the same, we haven't seen any KFC closure in April as well. In fact, in case of Pizza Hut, the closures, which was less than 5% in March, it has come down. Now it's less than 3% in case of Pizza Hut, KFC continues to be zero closure. Okay. It is, so this commentary that was there for that was specifically for March. You're saying that in April it is, the situation has improved basically. The situation has remained same for KFC because it was zero and slightly improved for Pizza Hut. Slightly improved for Pizza Hut. Okay, fine sir. Thanks a lot and all the best. That's all from my side. Thank you. The next question is from the line of Kaivalya Baing from IIFL Capital. Please go ahead. Please proceed. Hi sir, this is Percy here. My question was, you mentioned earlier that over the last four, five months you have done a lot of work and that is giving you rewards in terms of improved sales performance. One of the things you mentioned is that you have a sort of very strong focus on value. Apart from the BOGO recruitment tool, can you elaborate what exactly you mean when you say you have a strong focus on value? Does it mean that you have launched more products at entry price points, or does it mean that you have increased the intensity of promotion and thereby delivered more value, or does it mean something else? Related question to that is that if you have given more value to the consumers, what is the while you would have of course gotten more transactions, what is the impact on the bill value because of this initiative? Yeah. Percy, in the past we have run INR 99 product offers, and they've not worked as well. Remember we had a snackers range at INR 99 and so on and so forth. I think what is working here is, I don't know whether you've seen the advertising that we have run along with the INR 99, along with the INR 99 product. That advertising is really addressed directly at aware non-users, and it encourages them to come to KFC and see the kind of range, because that is the consumer, that's the simple consumer insight. That there are people who are aware of the brand, but they still don't come in because of misplaced, you know, thoughts in their head about the brand. I think this it's a combination of behavior changing advertising along with a core meal at INR 99. These are the two things that are working. We ran a core meal at INR 299, didn't work as well. Also, our advertising there didn't call out and didn't address this aware non-trier as, you know, effectively as we wanted. This has been a learning experience that we have had, and perhaps this did well in November. December, we extended it in about 1/3 of our stores by January. Now in April, all our stores except the Tamil Nadu stores are on this. Sir, impact on bill value? Initially we find that there is an impact on, there's a difference, transactions are higher than, and bill value is negative. Over a period of time, this closes quite rapidly. It is also showing that the person comes in and then buys other things also. The consumer comes in and buys other things. There'll be about a 300 to 500 basis points difference in transactions will be higher than SSSG. Again, Percy, so we are talking about two prong strategy, right? The INR 99 meal, there is a difference or there's a lower APC over there and higher transaction. What we run in the south market, which is the BOGO, is at a higher end in terms of the ticket price. While there is a drop in drop in ticket prices in North and West because of one particular kind of offer, the idea is to drive through a higher ticket price through a different kind of offer, which is a BOGO offer on select days. At the organization level, what Sanjay is saying, probably anywhere between 2%-3% from a, from a impact on a APC on these offers per se. There are other sales which happens where we also drive the pricing up or the ticket price up, not the pricing up, the ticket price up. This is very specific to this particular offer, a 2%-3% drop. Understood. While you mentioned that, in BOGO, the vendors are also participating and it therefore doesn't impact your gross margins, but what about the 99 INR meal? I mean, I'm sure that is at a significantly lower GM versus the rest of your average portfolio. Is there any kind of impact of GM on that? If so, how are you mitigating it? First it's actually other way around. We called out that the INR 99 Krisper Chicken Burger Meal, that's where the participation is there from the vendor partners, not on the BOGO side. Oh, I see. Yeah. I think you understood the other way around. Okay. I also called out— Okay. Okay. My mistake. I also called out that as we move forward— So also— —probably the impact if the vendor partner support is not there, also depending upon what kind of mix we drive and generate, there could be a potential impact of 50 to 70 basis points on gross margin as we move forward. Right. Right. In that case, my question would be, is there any significant impact from the BOGO offer on the gross margin? Yes, the answer is yes, there is an impact of BOGO offer on this, on the gross margin, but it's there for that particular day because we don't run it on a continuous basis. It's on a select day or couple of days in a month. Even if that margin impact is there. Understood. More gets made up by the kind of volumes and throughput we see on that particular day. Overall at a restaurant EBITDA margin percentage level also it is equity. Understood. Understood. That's all from me. Thanks and all the best. Thank you. Next question is from the line of Kevin Gandhi from CapGrow Capital. Please go ahead. Hello, sir, I just had one question. I just wanted to understand that the expected with [Devyani]. When is it expected to be completed? Your voice was very feeble, but I guess I got your question. It was about the timeline of mergers and when it is expected to get consumed. Am I correct? Is that your question? Yes, sir. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. That's the question. From a process point of view, when we, when we announced it on 1st of January, we called it out that it's a 12 to 15 months process. In that process where we are currently is our registered office change got approved by shareholders initially. Subsequently, we have received an approval from the authority also for the registered office change. The formalities will get completed in next two weeks. That's one agenda which will get done. The second big-ticket item is getting approval from SEBI. We have already had a few round of queries from NSE and BSE. That's got cleared now. It's moved to the SEBI. We expect that clearance probably have to happen over the next 30 to 45 days. Once that happens, with the registered office change in place and the SEBI approval in place, we should be able to go to NCLT and make an application. NCLT approval process can be anywhere between seven months to 10 months from approval process. Parallelly, we will make a CCI application as well. I would say it looks like by the end of this financial year, we should be in a position to consume the merger. That's the likely scenario by the end of this financial year. Okay. Thank you. Thank you. Thank you. Thank you. That was the last question for today. I now hand the conference over to Mr. Sanjay Purohit for closing comments. Over to you, sir. Thank you, everybody. Like I said, good quarter bodes well for the fiscal going forward, and it's been an all-round performance. When you see our ESG scores and our employee engagement scores, these are what contribute to the and being and continuing to iterate on strategy till we get it right. I think this is what is enabling us to deliver this result. That's it from us. Thank you so much. Thank you very much. On behalf of Sapphire Foods, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.