Sapphire Foods India, the franchisee of KFC and Pizza Hut restaurants, announced its biggest quarterly decline in profit since it went public in 2021. The company’s consolidated net profit dropped by nearly 69% to ₹101.4 million ($1.22 million) for the quarter that ended on December 31. This decline can be attributed to intense domestic competition and a decrease in consumer spending on fast food due to inflation. Sapphire and other fast-food outlets in India have responded by introducing cheaper menu items and launching more marketing campaigns to stimulate demand. However, they continue to face challenges from local pizzerias, which offer even more affordable options. Same-store sales at KFC and Pizza Hut declined by 2% and 19% respectively. Despite these challenges, Sapphire’s total revenue increased by 12% to ₹6.66 billion. However, expenses also rose by nearly 16%, resulting in a contraction of the company’s margins on earnings before interest, tax, depreciation, and amortization (EBITDA) from 19.6% to 18.4%. Shares of Sapphire rose by 2% following the announcement of the results. Other players in the industry, such as Jubilant Foodworks, the operator of Domino’s Pizza, and Devyani, the operator of KFC in India, have also faced challenges, including a surprise fall in quarterly profit and slow revenue growth since listing, respectively.