Speciality Restaurants Eyes Strong Future Growth

Ashwin Thakker

— 2 min read

Key Facts on Outlook:

  • Sales Outlook: Anticipates 10-15% revenue growth (working towards it). Seasonal strength expected from September to December. Same-Store Growth (SSG) projected to increase in August-October 2025. New restaurant openings (7 Asian, 2 Italian) and renovated units (Mainland China to Asia Kitchen) expected to contribute 20-30% revenue growth. Plans include 3 new Walters Burger outlets this quarter, 5 by end of FY26. Expanded to 11 cloud kitchens.
  • Margin Outlook: Q1 FY26 gross margins improved to 70.2% (vs 69.2% previous year) due to favorable inflation. Operational EBITDA margins improved from 4.5% to 6.2% due to expense management and contributions from new restaurants. Aggregator commissions remain a significant expense, at approximately 5% of revenues.
  • Funding & Capex: Strong treasury of INR 162 crores as of June 30, 2025. Business is self-funding monthly. No plans for external funding or leverage. New restaurants typically breakeven within 3-6 months.

Speciality Restaurants Limited's Q1 FY26 earnings call highlights a strategic pivot towards robust expansion and operational efficiency. The company reported improved operational EBITDA margins and gross margins, alongside a strong cash position of INR 162 crores. This financial strength underpins ambitious plans for new restaurant openings, brand diversification, and continued revenue growth, signaling a confident outlook for the future.

Strategic Expansion and Brand Focus

The company is actively pursuing an expansion strategy, with plans to open a significant number of new restaurants this financial year. A key focus is the Quick Service Restaurant (QSR) segment with Walters Burger, which management expects to expand with three new outlets this quarter and five by year-end. Additionally, they are investing in the Italian brand, Siciliana, converting existing Cafe Mezzuna units and planning two new Italian restaurants among seven total Asian format openings. This strategic growth aims to capitalize on market demand and enhance store economics. Rajesh Mohta, CFO, stated,

“Italian has been a very strong focus and growing market in India with very less competition.”

Operational Efficiency and Financial Outlook

Operational efficiencies have significantly boosted the company's financial performance. Rajesh Mohta, CFO, stated,

“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.”

Gross margins also improved due to favourable inflation. The company maintains a robust financial position with a treasury of INR 162 crores, enabling self-funded expansion. Management aims to sustain 10-15% revenue growth and anticipates same-store sales growth, particularly from August to October, reinforcing a positive outlook.

Speciality Restaurants Limited is poised for growth, underpinned by strategic brand expansion, operational efficiencies, and a strong financial position. The focus on new formats like Walters Burger and Siciliana, alongside renovations of existing stores, is set to drive future revenue. With a clear path for self-funded growth and expected improvements in same-store sales, the company projects a confident and stable outlook for the coming quarters.

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