Oct 28 (Reuters) - Sapphire Foods India, which

operates Pizza Hut and KFC ( YUM ) restaurants in the country, posted a

surprise quarterly loss on Monday, as inflation-weary consumers

chose to dine out less.

Global fast-food chains, including McDonald's and

Domino's, have been doubling down on cheaper pizzas and

burgers in the price-sensitive Indian market, where consumers

have been cutting back on discretionary spending due to rising

prices of essentials, including food.

KFC ( YUM ) has over the last few quarters launched more "value

offerings" in the 99-149 rupees ($1.2-$1.8) range, while Pizza

Hut introduced the "folded" pizza, called Melts, from 169

rupees.

However, these were not enough, as Sapphire Foods, a

franchisee of KFC ( YUM ) and Pizza Hut owner Yum Brands ( YUM ), posted

a loss of 30.4 million rupees ($361,614.18) for the quarter

ended Sept. 30.

Analysts, on average, had expected a profit of 9.5 million

rupees, according to estimates compiled by LSEG.

The company posted a profit of 153.4 million rupees last

year.

Same-store sales declined 8% at KFC ( YUM ) restaurants across India

and fell 3% at Pizza Hut stores across the country.

"Demand conditions continued to be muted," Sapphire Foods,

which runs over 900 restaurants in India, Sri Lanka and

Maldives, said.

Overall revenue from operations, however, climbed 8% to 6.96

billion rupees as it added 23 more restaurants in the quarter

but still fell short of market expectations of 7.02 billion

rupees.

Westlife Foodworld, which operates McDonald's in

west and south India, last week reported a sharp drop in

quarterly profit on lower demand for its burgers among

cost-conscious consumers.

Devyani International, another Yum Brands ( YUM )

franchisee, and Domino's India operator Jubilant FoodWorks

have yet to report results for the quarter.

($1 = 84.0675 Indian rupees)