Speciality Restaurants Eyes Expansion and Profit Growth

Ashwin Thakker

16 Aug 2025 — 1 min read

Sales Outlook: Targeting 10-15% growth; expecting same-store sales growth to improve from August onwards.
Margin Outlook: Operational EBITDA margins improved to 6.2%; gross margins reached 70.2%. Strategic renovations boost revenue by 20-30% for older Mainland China outlets.
Expansion & Funding: Planning "a good number" of new restaurants, including 5 Siciliana and 8 Walters Burger outlets (3 more this quarter, 5 more by FY end). Well-capitalized with INR 162 crore treasury for self-funded growth.

Speciality Restaurants reported Q1 FY26 operational EBITDA margin growth to 6.2%, up from 4.5%. Despite challenges from service charge withdrawal, the company outlines a clear path for future expansion and profitability. Key strategies include new restaurant openings, brand diversification, and ongoing renovations aimed at boosting sales and efficiency.

Strategic Expansion and Brand Diversification

Speciality Restaurants is set for significant expansion, aiming to open "a good number of restaurants during the financial year." The strategy includes diversifying its portfolio, with a strong focus on Italian cuisine via Siciliana and the fast-casual Walters Burger. Management stated, "We're doing 3 more Walters in this quarter, and hopefully, 5 more by the end of this financial year." Walters Burger has already shown strong repeat business. The company also plans seven new Asian and Italian restaurants, integrating dark kitchens for efficient delivery. Expansion efforts are concentrated in Mumbai and Kolkata.

Margin Improvement and Capital Efficiency

The company demonstrated strong financial discipline, boosting operational EBITDA margins from 4.5% to 6.2% and gross margins to 70.2% in Q1 FY26. This was achieved through efficient expense management, even with aggregator platform costs. A key profitability driver is the renovation strategy; converted Mainland Chinas have shown "a growth in revenues ranging between 20% to 30% on a yearly basis." New restaurants typically breakeven within 3 to 6 months. Speciality Restaurants is well-capitalized with an INR 162 crore treasury, allowing for self-funded expansion and renovations.

Speciality Restaurants is strategically positioned for sustained growth, leveraging its strong treasury and improved operational efficiencies. With a clear focus on brand diversification, targeted expansion in key markets, and impactful renovations, the company aims to capitalize on increasing discretionary spends. This disciplined approach sets the stage for continued revenue growth and margin expansion in the upcoming quarters.

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