Barbeque-Nation Hospitality: Sizzling Stock of the Restaurant Industry

“We are experiencing early signs of improvement in terms of month-on-month volume growth. We are closely monitoring this positive developments and are hopeful of recovery over the next 2 quarters. Median to long-term growth story of our company remains intact. Our growth going forward will be driven by SSSG and expansion led growth for Barbeque Nation and Toscano business, calibrated growth for international business, coupled with increase in average daily sales of both UBQ and Dum Safar.”
-Rahul Agrawal, Chief Executive Officer & Whole Time Director

Stock Data

Ticker	BARBEQUE
Industry	Restaurant
Exchange	NSE & BSE

Share Price

Last 1 Month	8.4%
Last 6 Months	-35.3%
Last 12 Months	-34%

Business Basics

Barbeque-Nation Hospitality Limited is a prominent Indian restaurant chain that specializes in buffet-style dining and live grilling experiences. Founded in 2006, the company has grown rapidly and established itself as one of the leading players in the casual dining segment in India. Barbeque-Nation’s unique concept revolves around the interactive dining experience it offers to customers. The restaurant features live grills embedded in each table, where customers can personally grill their food and customize their meals. The extensive buffet spread includes a wide variety of vegetarian and non-vegetarian dishes, featuring a range of grilled, barbecued, and global cuisine options. The menu also features a wide variety of vegetarian and non-vegetarian options, including barbecued starters, main courses, and delectable desserts. The live grilling experience adds an interactive element to the dining experience, allowing guests to customize their food according to their preferences.

The company focuses on providing a warm and inviting ambiance, combining rustic interiors with comfortable seating arrangements. The spacious dining areas are designed to accommodate both small and large groups, making it an ideal choice for family gatherings, social events, and corporate meetings. Barbeque-Nation emphasizes high-quality ingredients and follows stringent food safety standards to ensure that customers enjoy safe and hygienic meals. The brand continuously innovates its menu, introducing new flavors and dishes to cater to evolving consumer tastes.

In addition to its dine-in services, Barbeque-Nation also offers takeaway and delivery options, providing customers with the flexibility to enjoy their favorite barbecued delicacies at home or at any location of their choice. With a strong customer-centric approach, Barbeque-Nation focuses on delivering exceptional dining experiences through its warm hospitality, flavorful food offerings, and attentive service. The company’s commitment to quality, innovation, and customer satisfaction has contributed to its success in the highly competitive restaurant industry in India.

Q4 FY23 Financial Performance

Barbeque-Nation Hospitality Limited reported Total Income for Q4 FY23 of ₹282.47 Crore up from ₹256.91 Crore year on year, a growth of 9.9%. Consolidated Net Loss of ₹11.60 Crore, down from Profit of ₹0.48 Crore in the same quarter of the previous year. The Earnings per Share is -₹3.04 in this quarter.

Barbeque’s Network Expansion & Growth Pillars

As of March 31, the company’s network of restaurants totaled 216. Of those, there are 196 Barbeque India restaurants, 6 Barbeque International restaurants, and 14 Toscano restaurants. Out of all restaurants, 154 have been open for more than two years and are considered to be mature restaurants, while the remaining 62 are classified as new restaurants. In the previous year, 39 additional restaurants were added. However, 7 of the company’s restaurants were closed, 5 of which were in tier 3 markets. The restaurant’s average revenue is lower in Tier 3 markets, which had an adverse effect on profitability. Additionally, the company did not expand into Tier 3 or Tier 2 markets over the past two years. Barebque’s growth is most heavily weighted towards Tier 1 and metro areas.

The company has also been successful in developing a number of business growth levers. Back in 2006, the dine-in business from Barbeque Nation India accounted for nearly 97% of the total revenue. Toscano, international business, and delivery are three new growth pillars that together accounted for nearly 25% of total revenues in FY23. The future growth trajectory of Barbeque Nation India’s business is expected to continue on a higher base. The new verticals, according to management, are anticipated to grow more quickly, further diversifying of revenue contribution across these growth levers.

Outlook of India’s Restaurant Sector

The restaurant industry in India has undergone significant growth and transformation in recent years. With a large and diverse population, a growing middle class, and changing consumer preferences, the restaurant sector has become an integral part of India’s social fabric and economy. One of the key drivers of the restaurant industry in India is the changing dining habits and preferences of consumers. Rapid urbanization, increased disposable income, and a rise in dual-income households have led to a surge in eating out and dining experiences. Indians are increasingly seeking convenience, variety, and quality in their dining options, leading to a significant increase in the number of restaurants across the country.

The emergence of food delivery platforms and aggregator apps has also played a crucial role in the growth of the restaurant industry. These platforms have made it easier for consumers to access a wide range of cuisines and food options from the comfort of their homes. This trend has further accelerated during the COVID-19 pandemic, where food delivery has become an essential service for many people. Furthermore, the rise of the millennial and Gen Z population has driven the demand for unique and experiential dining concepts. Restaurants that offer innovative menus, trendy ambiance, and immersive dining experiences have gained popularity among these demographics.

Despite the positive outlook, the restaurant industry in India faces several challenges. High real estate costs, stringent regulations, complex licensing procedures, and labor shortages are some of the hurdles that restaurant owners and operators need to overcome. Additionally, intense competition, both from established players and new entrants, can make it challenging to stand out and attract customers. To thrive in this competitive landscape, restaurants in India need to focus on differentiation, quality, and customer experience. They should also adapt to changing consumer preferences, such as offering healthier options, catering to dietary restrictions, and providing convenient delivery services.