Motilal Oswal keeps Buy on Sapphire Foods (TP Rs 245) and R R Kabel (TP Rs 2,960)

what happened

According to a TradingView summary of Motilal Oswal research, the brokerage kept its Buy rating on Sapphire Foods India with a target of Rs 245. The target is based on 20 times September 2028 estimated pre-Ind AS EV/EBITDA. Revenue rose 20% year on year in the second quarter of FY27, the fastest growth in 12 quarters and in line with forecasts. KFC revenue climbed 26% and same-store sales grew 14%, which beat expectations. Excluding the shift of the Navratri season into the third quarter, underlying same-store growth was in the high single digits.

Pizza Hut revenue grew 7% and same-store sales rose 5%, in line with estimates, helped by a weak base last year. Sri Lanka revenue increased 9% in LKR terms. Management expects marketing spending in FY27 to rise by 50-100 basis points at KFC and 100-150 basis points at Pizza Hut versus FY26. Prices were raised 2-3% in April-May, with another 2-3% increase at Pizza Hut toward the end of the first quarter.

Separately, Motilal Oswal reiterated its Buy call on R R Kabel with a target of Rs 2,960, set at 35 times FY28 estimated EPS. The firm projects revenue, EBITDA and profit to compound at roughly 25%, 36% and 40% over FY26-28, with the company becoming net cash by FY28. Commercial production began in mid-September 2026 at a new 12,000 metric ton a year plant in Silvassa, with capacity expected to reach 18,000 metric tons by December 2026. The acquisition of U M Cables' optical fiber business gives it a foothold in communication cables.

why it matters

Both notes come from one Indian brokerage and mainly concern the shares of these two companies, as well as sentiment around Indian consumer and cable stocks. The Sapphire note highlights rising marketing costs and price increases that could affect margins, while the R R Kabel note focuses on capacity expansion and the shift toward higher-value cables.

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