Speciality Restaurants Poised for Growth

Ashwin Thakker

16 Aug 2025 — 2 min read

Sales Growth Outlook: Aiming for 10-15% continued growth; positive same-store growth expected from August onwards.
Gross Margin: Improved to 70.2% in Q1 FY26.
Operational EBITDA Margin: Improved to 6.2% in Q1 FY26.
Expansion Plans: Expects to open a "good number" of new restaurants, including 5 Siciliana, 5 Walters Burger, 7 Asian, and 2 Italian outlets.
Renovation Strategy: Converting older Mainland China units to Asia Kitchens, showing 20-30% yearly revenue growth on renovated units.
Financial Position: Strong treasury of INR 162 crores for internal funding; no new fundraising or leverage planned.

Speciality Restaurants Limited recently shared a promising outlook during its Q1 FY26 earnings call, signaling confidence in future discretionary spending. The company's management highlighted robust financial performance in the quarter, driven by operational efficiencies and strategic initiatives. This forward-looking commentary provides insight into the restaurant chain's ambitious plans for sustained revenue and margin growth, coupled with a significant expansion of its brand portfolio and geographic footprint.

Stronger Outlook: Revenue and Margin Growth

Speciality Restaurants reported a resilient Q1 FY26, with stand-alone income growing 3.04% year-over-year. Despite the withdrawal of service charges impacting revenue, favorable inflation boosted gross margins to 70.2%. Operational EBITDA margins improved from 4.5% to 6.2%, driven by efficiency and new restaurant contributions. Management aims to continue its 10-15% revenue growth guidance. CFO Rajesh Mohta expects Q2-Q4 to be

"much, much brighter for us as far as discretionary spends are getting increased."

The company anticipates a return to positive same-store growth (SSG) from August through October, following a flat Q1.

Expanding Footprint and Brand Portfolio

Speciality Restaurants detailed ambitious expansion, planning a

"good number of restaurants"

this year. This includes five new Siciliana Italian units, five Walters Burger stores, and nine new Asian/Italian outlets. A key strategy involves renovating older Mainland China restaurants into upgraded versions or Asia Kitchens, yielding 20-30% yearly revenue growth on these units. The company also expands its 11 cloud kitchen operations. All these initiatives are funded internally from its robust INR 162 crore treasury, avoiding new fundraising or leverage.

In conclusion, Speciality Restaurants Limited is positioned for significant growth, backed by an improved financial performance and a clear strategic roadmap. The focus on operational efficiency, targeted expansion of new and existing brands, and internal funding underscores the company's confidence. As discretionary spending is projected to rise, Speciality Restaurants appears poised to capitalize on market opportunities and deliver enhanced value.

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