Speciality Restaurants Ltd (NSE: SPECIALITY) Q1 2026 Earnings Call dated Aug. 06, 2025
Corporate Participants:
Unidentified Speaker
Dheeraj Mistry
Rajesh Mobhar — Executive Director
Analysts:
Unidentified Participant
Charlene Seth — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome TO Specialty Restaurants Q1 FY26 earnings conference call hosted by ICICI Securities Ltd. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing STAR then zero on your touch on phone. Please note that that this conference is being recorded. I now hand the conference over to Mr. Dheeraj Mistry from ICICI Securities Ltd. Thank you and over to you sir.
Dheeraj Mistry
Thank you and good afternoon everyone. First of all I would like to thank management of Specialty restaurant to give this opportunity to host this call. We have with us Mr. Avit Chatterjee, whole time director and Mr. Rajesh Mobhar, executive director and finance and CFO. Over to you sir.
Rajesh Mobhar — Executive Director
Thank you Mr. Dheeraj for warm introduction. On behalf of the management, myself Rajesh Kumar Mohtar, CFO of the company. Welcome all the participants to the investors call of the company after the approval of results by the board of directors yesterday and submission to the stock exchanges as per guidelines, I would like to briefly touch upon the quarter highlights for the information. Despite the data being there on the stock exchange side, the total income standalone income grew by 3.04% during the quarter.
Rajesh Mobhar — Executive Director
Compared to the previous year quarter.
Rajesh Mobhar — Executive Director
The basic highlight for the revenues are the company had withdrawn the living service charges in the Bill from 29th March 2025 as per the decision of the Delhi High Court. This has impacted on the top line in the quarter as we could not pass completely by increasing the menu prices. Second, inflation has been favorable leading to improvement in gross margins to 70.2% against 69.2% in the previous year quarter. One impact which has happened because of India is there is a gain on lease and modifications to termination of the leases in this quarter which amounted to 43 lakhs only against 3.73 crores in the previous year quarter.
I would like to highlight an important number which is EBITDA margins on operations basis only has improved from 4.5% to 6.2% because of managing efficiencies on expenses and new restaurants contributing to the bottom line. One major expenditure which we continue to incur is spends on aggregator platforms which is almost to the tune of 5% of the revenues during the quarter we opened a new restaurant by the name of Siciliana by Cafe Mizuna which is an Italian brand at Forum Malcolcata. It is basically a Conversion from our existing Cafe Mizuna to an upgraded version which is Siciliana Italian brand.
The company has forayed into Walters Burger store, a one pallet store which has got opened in Andheri west in Mumbai. We are expecting to open good number of restaurants during the financial year. Thank you. We now open the Q and A session.
Questions and Answers:
operator
Thank you sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touch tone telephone. If you wish to remove yourself from the question queue you will press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Mr. Vishal Dudwala from three Netra FX managers. Please go ahead sir.
Dheeraj Mistry
Yeah, so am I audible?
operator
Yes sir, please go ahead.
Dheeraj Mistry
Yeah, so thank you for the chance. Like my first question is like with India’s online food delivery market is gonna grow at a double digit for over next three, five years. And even in our revenue 24% is contributed by a delivery. So can you elaborate your differential margins between dining and delivery? Specifically what strategy levels are you using like in house logistics or something like that?
Rajesh Mobhar
This is Rajesh Motorsar. Appreciate your question here. See what is happening is we are a dine in basis. Company delivery is an offshoot from our existing restaurants. Our focus has always been to grow our dine in business delivery is a compounding impact. So when you talk in terms of profitability margins there is one additional expenditure on delivery which is the aggregators commission which gets paid out of it. But on a blended basis there is not a major differential from a dine in delivery base because the revenue share, et cetera which are for the premises are paid for both the dine in business and the delivery business.
Dheeraj Mistry
Okay, so there is no manual segmentation for online and dining, right?
Rajesh Mobhar
Yes. No.
Dheeraj Mistry
Okay, okay, got your point. And my second question is on upcoming plans, like as you mentioned, you are gonna open some new or re refurbishment. So how are you gonna keep exam, how are you going to fund that?
Rajesh Mobhar
See, God has been kind as on date we have a treasury of almost like 162crores which is there for our renovation and opening up new restaurants. Plus the business itself is generating cash on a monthly basis. So we would, we are geared and we are not exploring any possibility of leverage or a fundraising at this point of time.
Dheeraj Mistry
So can you like throw some numbers like how much time will it get to payback or even break even?
Rajesh Mobhar
Sorry, break Even would mean you want to know for a new restaurant.
Dheeraj Mistry
Yeah, yeah, yeah.
Rajesh Mobhar
So the new one generally typically takes between three to six months to break even on a restaurant level basis. Both in new and refurbished, both units see refurbished. It depends upon the kind of renovation which is carried out there. The capital expenditure is less and we are targeting the restaurants which have led a big, I would say good number of years. So here the existing restaurants return is faster than the new restaurants.
Dheeraj Mistry
Okay, okay, got your point. So thank you. That’s it from my end. Hoping for the best.
operator
Thank you. Participants, if you wish to ask a question, you may press star and one on your touch tone Telephone. The next question is from the line of Charlene Seth from Sears Fund Management Private limited. Please go ahead.
Charlene Seth
Hello?
operator
Yes sir, you are audible.
Charlene Seth
Yeah, hi Mota sir. Hi, Avik. Thank you for being. Good evening. So I have a few questions. I hope you have the time for that. The first bookkeeping question is how much cash do we still have?
Rajesh Mobhar
Sir, as I mentioned, we have a Treasury of 163, 163.8 to be precise, as on 30 June 25th.
Charlene Seth
Okay, so secondly, we have opened a mainland China. I couldn’t see it in the numbers in the presentation, but I couldn’t see it anywhere else like in the photos or something. From 14 we have come to 15 count. So where was that?
Rajesh Mobhar
So it is all Asia kitchens. I will have to just check which may. We have not opened any mainland China.
Charlene Seth
Okay, so on the presentation it says it’s a 15 count. We can probably discuss that later then My last question is specifically on Siciliana. So our focus on this brand seems to be increasing significantly. And specifically like we are converting our episode to Siciliana. What is the reason for doing that?
Rajesh Mobhar
So Episode basically in Thane was the spot that we got was too small for episode. And being a wet LED space, the weekend sale is what carries forward the entire pnl. What happened there is because of lack of spaces, we signed up Episode. But then we realized that we don’t have enough capacity to fill on Fridays, Saturdays and Sundays. Hence drinking spot does not have great lunches. Hence we think Siciliana is a better fit there. And we will be relocating episode to Bangalore soon.
Charlene Seth
Okay, that sounds good. Specifically Ceciliana. In total we are focusing about five units. If I’m not wrong, going forward, the ones which are planned and what’s okay. And.
Rajesh Mobhar
Italian has been a very strong.
Rajesh Mobhar
Focus and growing market in India with very less competition. So we feel for example the mall that we’re coming up in Palladium Mumbai soon there are probably only one other non focused Italian but one other spot that serves Italian. So what happens is it becomes a one off in the segment in a crowded market itself. So we feel this is the way to grow in crowded malls alongside Asia Kitchen. So hence when we do negotiate rental deals we come up with Asian and Italian. So it makes our store economics way better.
Charlene Seth
I completely agree with you. India eats pizzas more than anything else like biryani. Then second is pizzas. So no doubt about that. I think we wish you luck for that. Just one quick question on the Calcutta property also any update on that? When can we expect that to be commissioning this year?
Rajesh Mobhar
The plan is to get that particular building up and running with banquets, etc.
Charlene Seth
Okay, so this financially everything is. Yeah, okay. Great sir. And Walters has come out very nice. It looks perfect. Wish you all the best.
Rajesh Mobhar
Thank you. We’re doing three more Walters in this quarter and hopefully five more by the end of this financial year.
Charlene Seth
And are you happy with the response till now?
Rajesh Mobhar
Fabulously happy and hoping that it stays the same. It seems like the trend is Great. We have 40% repeat customers which is a great, great sign in this market. So hoping for the best for the growth.
Charlene Seth
That sounds perfect. Congratulations. Thank you.
Rajesh Mobhar
Thank you.
Rajesh Mobhar
Thank you Mr. Shelley.
operator
Thank you. Before we take the next question, participants, if you wish to ask a question you may press star and one on your touch tone telephone. The next question is from the line of Mr. Vivek from Inga Ventures. Please go ahead sir.
Dheeraj Mistry
Hi sir. Thanks for the opportunity. So my first question is regarding any guidance about revenue growth and EBITDA margin.
Rajesh Mobhar
Mr. Vivek, I really appreciate our business is more seasonal like we wait for the season September to December to come in and would have a better and clearer picture. But yes, with the new openings, the kind of results which we have seen, things are looking up.
Dheeraj Mistry
So can we assume that the last quarter growth guidance that is 10 to 15% will continue?
Rajesh Mobhar
We are working hard toward it, Mr. Bhaven.
Dheeraj Mistry
And any update on the SSG?
Rajesh Mobhar
See SSG. Yes, we are. Let’s say for instance if you look at this particular quarter, it is almost like flat or slightly negative. But we are expecting now going forward in the month of August, September, October, things should be much much brighter for us as far as distance spends are getting increased the way FMCG companies are expecting an increase. So we are also looking forward for.
Rajesh Mobhar
A growth there on SSG basis.
Charlene Seth
Thanks.
Dheeraj Mistry
That was my last question.
operator
Thank you. The next question is from the line of Mr. Balaji Vaidyanath from Nafa Capital. Please go ahead, sir.
Charlene Seth
Good evening sir. Thank you for taking my questions. Rajesh initially mentioned that new restaurants typically break even between three to six months. So assuming, let’s say we take four and a half months on an average. So you’re talking about a fixed asset turnover of almost two and a half times. So suppose you invested 10 crores in a new restaurant. Hypothetically, you make about 25 crores of turnover. But if you look at the overall gross block number on your turn on your sales, it’s roughly about one time. So does that mean that the old restaurants, the fixture turnover is.
It kind of wears off. The novelty wears off very fast and therefore the turn is not being able to be maintained.
Rajesh Mobhar
Shivalaji. Good evening. I fully appreciate your hotel numbers. Yes, that’s the only reason why renovation has become a very important subject for us. And we are continuing to renovate to older mainland Chinas and converting mainland Chinas into Asia kitchens in order to have a higher turnover vis a vision, fixed assets investments.
Charlene Seth
And are there any early indications that these renovations are actually increasing the ton?
Rajesh Mobhar
Yes, sir. What we have seen the converted and the renovated mainland Chinas have seen a growth in revenues ranging between 20 to 30% on a yearly basis. And what has happened? Let’s say for instance since the Company is a 30 year old company with various brands and the restaurants which are more than eight or nine years and wherever we have been able to renew our leases, we are investing into the ambience and totally converting those mainland Chinas into upgraded versions of mainland Chinas on a standalone basis and trying to convert existing mainland Chinas in which are there in malls to Asia kitchens and.
But they’re trying to keep the expenditure almost on the same levels and maintaining the operations cost for those restaurants on similar number basis.
Charlene Seth
Okay. Okay, sir. Thank you so much.
Rajesh Mobhar
Thank you, sir.
operator
Thank you. Participants, if you wish to ask a question, you may press star and one on your touchstone telephone. The next question is from the line of Mr. Abhishek Singh from SNS Capital. Please go ahead, sir.
Charlene Seth
Hi. Good evening sir.
Rajesh Mobhar
Very good evening, sir.
Charlene Seth
So my question is specifically regarding Hyderabad. I remember seeing and visiting your restaurant Hyderabad a while back during COVID But the experience was very bad. And I believe you guys have also closed out Hopipola which was available in Madhurpur. So just want to. Just want to understand specifically from Hyderabad geography perspective, what. What is the company thinking about?
Rajesh Mobhar
We are extremely sorry to hear that you had a Bad experience.
Charlene Seth
But.
Rajesh Mobhar
But if I may, that’s the reason why we have closed Hapipola and stores in Begum. We are only continuing with one in Madhapur. We are exploring with malls, especially Nexus malls et cetera wherein we can get space. And it is now on our target area that we should expand in Hyderabad as well. So in couple of months time you would see some of our restaurants in.
Rajesh Mobhar
Hyderabad as well sir.
Charlene Seth
Good to hear sir. So the second question what I have is like in terms of geography, which specific state I think it is Calcutta and Mumbai when I’m going through the report. But I just want to understand from you that which one or two states where we are exactly focusing upon and the follow up will be that what is the case over there? Like why. Why are we cherry picking these two particular states? To expand. To expand the portfolio more over there.
Rajesh Mobhar
See if I may say so, Maharashtra has been the forte for the company and Eastern India, Calcutta because there are opportunities in the city itself. So what is happening? We are not increasing our fixed costs by increasing our regional office, let’s say for instance in Delhi to maintain that rather than amortizing the existing fixed costs over the new restaurants in these particular regions. But nonetheless the path is there. Once we are able to saturate some of the cities like Mumbai, Kolkata and Bangalore, we would definitely move to other cities of Hyderabad and tier 2 cities and NCR region in particular.
Charlene Seth
Okay, thank you so much sir.
Rajesh Mobhar
Thank you sir.
operator
Thank you. Participants, if you wish to ask a question, you may press star and one on your touch tone telephone. Participants, if you wish to ask a question you may press star and one on your touch tone telephone. We will wait until the question queue assembles. The next question is from the line of Mr. Abhishek Singh from SNS Capital. Please go ahead sir.
Charlene Seth
Yes sir, just one more follow up question. Actually I want to understand what does the company think about it. So nowadays a lot of companies specifically if I talk about like Rebel Foods, they normally. I mean they normally operate on the basis of dark food chains, right? I mean they don’t like. I’m not getting that word but. But I want to understand what is our company thinking about such kind of a model where we can also maybe experiment on such a model which will be specifically used for the delivery model if I could say.
Rajesh Mobhar
Right. So I’ll take up that question. So currently we do operate dark stores from all our restaurants. In fact we were one of the first restaurants company to start that. For example a mainland China also delivers food from Kesha Kitchen, a brand called Haka, a brand called O Calcutta. And this adds to the total revenue while keeping the labor and the staff cost the same. Apart from this, we have also we also expanded into 11 cloud kitchen pure dark kitchen operations in many cities apart from Mumbai and we’ve been successfully operating those. Another thing that has come up, another great brand that we feel has great potential for the future and it also is our first QSR brand which is Walters Burger.
We’ve done our first pilot store and we also in fact started with three cloud kitchens and now we’ve added the fourth one as well. So total five delivery points but one physical store. What we feel is when you do have a physical store, your customer confidence increases, hence the delivery sale increases. In that matter, the difference here is the store size is probably only 600 to 500 square feet, hence the CapEx rental operation costs are very, very minimal. But because it acts as a marketing store point, it helps the delivery to grow tremendously. And we’d be doing another three in the quarter which is Walters Burgers.
Apart from that, we are also expanding seven new restaurants in our Asian and two of them are going to be Italian. Within that, all these restaurants will also have dark kitchens of our other brands, hence reutilizing assets and also increasing top line.
Charlene Seth
Got it. So that really helps. Thank you.
Dheeraj Mistry
Perfect.
Rajesh Mobhar
Thank you.
operator
Thank you participants. If you wish to ask a question, please press star and one on your touchtone telephone. We will wait for a moment as there are no further questions from the participants. I would now like to hand the conference over to the management for closing comments.
Rajesh Mobhar
We are extremely thankful to all the participants to have spared time out of their busy schedule to attend to our investors call and we are happy to answer any specific questions if it can be sent directly to us. And look forward to better quarters and.
Rajesh Mobhar
More interactions going forward.
Rajesh Mobhar
Thank you so very much.
operator
Thank you sir. On behalf of ICICI securities limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.