Speciality Restaurants Eyes Growth And Margin Improvement

Ashwin Thakker

16 Aug 2025 — 2 min read

Key Facts on Outlook:

Q1FY26 stand-alone income grew 3.04%.
EBITDA margins improved to 6.2% from 4.5%.
Gross margins rose to 70.2% from 69.2% due to favorable inflation.
Targeting 10-15% revenue growth; expecting strong performance in upcoming season (Aug-Oct).
Company holds INR 162 crores treasury for expansion; no external funding planned.
Planning to open a “good number of new restaurants” and renovate existing ones.
New restaurants typically breakeven in 3-6 months.
Strong focus on Italian brand 'Siciliana' (5 units planned) and QSR 'Walters Burger' (8 units planned by FYE).
Existing Mainland China renovations into Asia Kitchens yielding 20-30% revenue growth.

Speciality Restaurants' Q1FY26 earnings call paints a picture of resilient growth and strategic foresight. Despite top-line impact from service charge withdrawal, the company achieved improved EBITDA margins. Management outlines ambitious expansion plans, focusing on new restaurant formats and renovations to drive future revenue and profitability.

Driving Growth Through Strategic Expansion

Speciality Restaurants is embarking on a significant expansion phase, backed by a robust treasury of INR 162 crores. The company aims to open a “good number of restaurants” this financial year, including new formats like Siciliana, with plans for 5 units, and Walters Burger, targeting 8 units by fiscal year-end. This expansion is self-funded, with no leverage or external funding anticipated. New restaurant units demonstrate quick viability, typically achieving breakeven within

3 to 6 months

. Furthermore, renovation efforts are revitalizing older Mainland China outlets, converting them to Asia Kitchens, which have shown promising revenue growth of

20% to 30% on a yearly basis

. This strategic reinvestment is crucial for maintaining strong asset turnover.

Enhanced Margins and Positive Market Outlook

Despite a 3.04% stand-alone income growth in Q1FY26, Speciality Restaurants notably enhanced its operational efficiency. EBITDA margins improved from 4.5% to 6.2%, and gross margins increased to 70.2%, attributing the latter to

favorable inflation

. While the withdrawal of service charges impacted the top line, the company is confident in its ability to manage costs. The management expressed optimism for the upcoming quarters, particularly August, September, and October, expecting

much, much brighter

performance. The company is working diligently towards achieving a 10-15% revenue growth target, anticipating increased discretionary spending in the market. Focus on high-potential markets like Mumbai and Kolkata precedes broader expansion.

Speciality Restaurants is clearly positioning itself for sustained growth by leveraging its strong cash reserves for strategic expansion and brand diversification. With improved margins and a proactive approach to market dynamics, the company's focus on new formats like Siciliana and Walters Burger, alongside Mainland China renovations, signals a disciplined yet ambitious path forward. The outlook for upcoming quarters appears positive, driven by anticipated market improvements and operational efficiencies.

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