May 7 (Reuters) - Sapphire Foods India, a

franchisee of U.S.-based fast-food major Yum Brands ( YUM ),

said Pizza Hut's recovery in India would take longer, after the

company reported quarterly revenue slightly below estimates on

Wednesday.

Indian operators of U.S. chains such as Pizza Hut, KFC ( YUM ),

McDonald's and Burger King face a double blow,

as they grapple not only with stiff competition from local

rivals but also shrinking consumer spending due to high living

costs and slow wage growth.

Pizza Hut has been among the worst affected over the last

two years, as overall dine-in demand remained under stress. The

brand brings in more sales from dining rooms compared to its

rival, the delivery-focused Domino's, operated by Jubilant

FoodWorks.

To drive demand in the quarter, Pizza Hut gave away a drink

and two sides with pizzas in a "super sale" offer, while KFC ( YUM )

promoted its "epic weekender" deal, offering up to a 34%

discount.

Despite its efforts, average daily sales at Sapphire's KFC ( YUM )

restaurants in India fell 6% sequentially, while Pizza Hut

posted a 13% decline sequentially, with the franchisee cutting

back on advertising.

"Pizza Hut had a disappointing quarter ... The performance

in the quarter reflects the longer horizon we will need in

reviving the brand," Sapphire said, adding it would be

"cautious" about opening new Pizza Hut stores.

Overall revenue jumped nearly 13% year-on-year to 7.11

billion rupees ($83.98 million) as Sapphire's store count rose

about 10% to 963 restaurants. However, that still fell short of

analysts' estimate of 7.14 billion rupees.

Sapphire's shares, which fell as much as 5% after the

results, closed nearly 1.3% lower.

The company posted a quarterly profit of 17.9 million

rupees, a 25% year-on-year fall but surprised analysts who had

expected a loss of 82.5 million rupees on average, according to

data compiled by LSEG.

($1 = 84.6600 Indian rupees)