Summary
Speciality Restaurants Limited - Q3 FY 2026 Earnings Call Summary Wednesday, February 11, 2026 4:00 PM
Event Participants
Executives 3 Anjan Chatterjee (CMD), Avik Chatterjee (Whole Time Director), Rajesh Kumar Mohta (Executive Director, Finance and CFO)
Analysts 2 Ashutosh (ICICI Securities), Prakash Kapadia (Kapadia Financial Services)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Standalone) | Not Disclosed | +9% YoY; Management noted this as the highest-ever quarterly revenue. |
| Gross Margin | 70.8% | +150 bps YoY from 69.3%; Driven by operational efficiencies and Oriental brand growth. |
| EBITDA Margin (Operational) | 12.75% | +90 bps YoY from 11.85% on a standalone basis. |
| EBITDA Margin (Post-IndAS) | 24.89% | +146 bps YoY from 23.43% in the previous year. |
| Same-Store Sales Growth (SSG) | Stable/Steady | Management reported steady performance compared to negative SSG in the previous year. |
| Average Order Value (AOV) | Not Disclosed | High AOV has allowed the company to negotiate favorable terms (22-24%) with aggregators. |
| Delivery Contribution | 24% of Revenue | Significant shift from 5-6% pre-pandemic, though the company remains dine-in focused. |
Geographic & Segment Commentary
- International Operations: Operates via a master franchise agreement with Resolute in Dubai, requiring zero capex from the company. Currently present in Mall of the Emirates and Muscat, with upcoming launches in City Centre (March 2026), Ibn Battuta, and Abu Dhabi. Strategic expansion is planned for Saudi Arabia and further UAE locations.
- Domestic Expansion (Metros/Mini-Metros): Focus remains on consolidating Bombay and Calcutta markets after shutting 32 units during the pandemic. Recently launched Asia Kitchen by Mainland China in Elante Mall, Chandigarh (2,000 sq. ft.), which is showing strong initial traction due to high brand recall.
- Segment Focus: Shifting toward smaller store formats (approx. 2,000 sq. ft.) to optimize staff costs and capital expenditure. The “Avenue” or QSR category (specifically Walters) is identified as a high-growth vertical for the upcoming year.
Company-Specific & Strategic Commentary
- Network Expansion: The company plans to open 8 to 10 new restaurants in FY27, with 3 to 5 of these being in the Walters QSR category. Expansion will be funded through internal cash accruals.
- Operational Efficiency: Management is actively “right-sizing” locations—moving toward smaller footprints to reduce overheads while maintaining the premium nature of brands like Mainland China and Asia Kitchen.
- Customer Engagement: Launching new CRM initiatives and promotional programs like “Monday Bonanza” to drive footfalls during traditionally weak weekdays and reduce dependence on delivery aggregators.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| New Store Openings | 8 - 10 Restaurants in FY27 | Includes 3-5 Walters QSR outlets; funded via internal accruals. |
| Strategic Direction | Ongoing Consolidation | Focus on high-traffic corporate and residential hubs in Mumbai and Delhi. |
| International Growth | Aggressive UAE/Saudi Expansion | Leveraging the master franchise model to grow without capital risk. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory Costs | Gratuity adjustments/provisions per new Government of India laws impacted reported profitability this quarter. |
| Macroeconomic Exposure | Potential impact of IT sector job losses in hubs like Bangalore and Pune; however, management believes residential/corporate mix provides a hedge. |
| Delivery Platform Costs | Dependency on Swiggy/Zomato for 24% of revenue; mitigated by high AOVs and direct CRM efforts to bring customers back to dine-in. |
Q&A Highlights
Operational Metrics & Strategy
- Question: What is the plan for restaurant additions and capex for FY27? (Prakash Kapadia)
- Answer: The company plans to open 8-10 new restaurants, including 3-5 in the Walters QSR category. Capex will be met entirely through internal cash generation (Rajesh Kumar Mohta).
Demand & Geographic Exposure
- Question: Is there an impact from IT sector job losses in Bangalore and Pune? (Prakash Kapadia)
- Answer: Impact is minimal as locations are balanced between corporate and residential areas. Brands like Asia Kitchen and Mainland China attract a diverse audience not solely dependent on IT (Anjan Chatterjee).
Delivery Trends & Aggregators
- Question: How is the delivery trend evolving vs. dine-in? (Ashutosh)
- Answer: Delivery has grown from 6% to 24% post-pandemic. High Average Order Values (AOV) help maintain healthy relationships with Swiggy/Zomato, though the current focus is driving dine-in via new CRM and weekday offers (Anjan Chatterjee).
International Model
- Question: What is the status of international operations? (Ashutosh)
- Answer: Dubai operates on a franchise model with a minimum 6% revenue/profitability threshold. Expansion into Saudi Arabia and more UAE locations is imminent with no capex requirement for the company (Anjan Chatterjee).
Key Takeaway
Speciality Restaurants Limited achieved record revenues in Q3 FY26, supported by 9% standalone growth and an improved gross margin of 70.8%. While gratuity provisions impacted net profitability, operational EBITDA margins expanded to 12.75%. The company has successfully navigated the post-pandemic landscape by pivoting to smaller, more efficient store formats (2,000 sq. ft.) and growing its delivery contribution to 24% of the mix. Strategically, the firm is focusing on high-density metros like Mumbai and the revival of the Delhi market, alongside a capital-light international expansion through master franchises in the Middle East. Management guided for 8-10 new openings in FY27, including a push into the QSR segment with the Walters brand. Moving forward, the key watch-points will be the sustainability of same-store sales growth and the successful ramp-up of the QSR vertical amidst shifting consumer habits.
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