Speciality Restaurants is the owner of restaurant brands like Mainland China, Flame & Grill, Machaan, Oh! Calcutta, Sigree and Haka.The company came out with its IPO in 2012 at 150/-Rs, but couldnt perform as expected. As a result, the share price mostly traded below the IPO price. Company has many positives like a professional management under the leadership of Anjan Chatterjee with vast experience in this field, proven execution skills ,rapid expansion ,asset light business model with good cash flow,excellent brand loyalty ,low debt etc. It has more than 100 stores in the names mentioned above .The company plans to open 15 to 16 restaurants in the next fiscal. They are also planning to target middle east by getting into Dubai
The company takes 120 days to setup a restaurant and another 6 months for its breakeven. For logistics the company has made tieup with Just Dial.The company's perfomance in the past few quarters have been flat.As we know, this business perfoms best when economy is in the boom. Due to subdued economic activity, the amount of money spent by people in luxuries like outside dining has come down.To maintain the footfalls into the restaurants, the company didnt go for any price increse.This caused a fall in operations profit margins. Also the same stores growth remained flat
Looking into the financials one may not find the company attractive. But once the economic activity picks up, more and more people will dine outside and it will be huge positive for branded restaurants like Specialty. At the cmp of 118, its worth putting some money if one beleive in the future of branded restaurant business
Disc: No Investments in Speciality Restaurants
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