Speciality Restaurants Limited held its Q4 FY26 earnings conference call on May 20, 2026, moderated by ICICI Securities. The management participants included Mr. Anjan Chatterjee (Chairman and Managing Director), Mr. Avik Chatterjee (Whole Time Director and CEO), and Mr. Rajesh Kumar Mohta (Executive Director, Finance and CFO).

Financial Performance Highlights

  • Q4 FY26 revenue grew by 13.65% year-on-year
  • Q4 FY26 profit after tax (PAT) increased by 44.20% year-on-year
  • Company has maintained consistent profits for 19 consecutive quarters
  • 5-year revenue CAGR of 12.39%
  • 5-year PAT CAGR of 11.16%
  • Gross margins improved from 69.1% to 70.4% despite inflationary trends
  • Same-store sales growth (SSG) for Q4 was 2.25%
  • Full-year FY26 SSG was 1.49%
  • April 2026 SSG showed significant improvement at 11.57%

Operational and Strategic Updates

Brand Strategy: The company has identified focus brands for expansion: Mainland China, Asia Kitchen, Haka, Gong, Siciliana, Walters, and Sweet Bengal. All other existing brands are profitable but will not be expanded further.

Expansion Plans for FY27:

  • 8 new restaurant openings
  • 15 new Walters outlets
  • 10 new Sweet Bengal stores
  • Total planned capex: INR 40 crores
  • Restaurant-specific capex: approximately INR 32 crores
  • QSR and confectionery capex: approximately INR 5 crores

Store Economics:

  • Average restaurant size: 2,500-3,000 sq ft (except Gong at 6,000-6,500 sq ft)
  • Target annual revenue per restaurant: INR 8-9 crores
  • Restaurant-level EBITDA: 22%
  • Rental costs: approximately 20-21% of revenue
  • Post-rental operating profit: 15%
  • Capex per square foot: INR 12,000-13,000 for Mainland China/Asia Kitchen

Average Order Values:

  • Walters: INR 700 per cover
  • Sweet Bengal: INR 400 per cover
  • Mainland China: INR 1,200-1,300 per cover
  • Asia Kitchen: INR 1,000-1,100 per cover
  • Gong: INR 2,500-3,000 per cover
  • Siciliana: Similar to Mainland China

Operational Initiatives

Energy Transition: The company is transitioning from LPG/PNG to induction cooking in response to fuel supply uncertainties:

  • 78% conversion completed as of call date
  • 100% conversion expected within 20 days
  • Capex spent on induction woks: INR 1.12 crores (since March 4, 2026)
  • Expected energy cost savings: approximately 6% compared to gas

Price Strategy: Implemented a 4% price increase to mitigate input cost inflation while maintaining customer affordability in the discretionary spending segment.

Financial Position

  • Corporate cash: INR 162.48 crores as of March 31, 2026
  • Net cash: INR 103 crores

Guidance and Outlook

  • FY27 revenue growth target: 15%+ (potentially reaching INR 600 crores)
  • EBITDA improvement target: 15-16% percentage increase
  • Corporate costs expected to reduce from 6-7% to 4% of revenue through expansion
  • Total touchpoints expected to increase from 121 (March 2026) to 150 by March 2027

Franchise Model

  • 11 franchise operations currently
  • Royalty structure: 6% of franchisee revenue
  • Seeking strategic partnerships with experienced operators rather than financial investors

Market Response Initiatives

The company is implementing tactical promotion programs including redemption coupons to ease consumer spending pressure without significant discounting.