Speciality Restaurants LtdQ4 FY17

Speciality Restaurants Ltd Q4 FY17 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹154P/E: 27.8Market Cap: ₹737 CrSector: Leisure Services

Management growth scorecard

Revenue

Category 4

Margin

Category 2

Fundraise

N/A

Order

N/A

Capex

N/A

0 of 2 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 4
  • Management expects a recovery post-demonetisation with some positive signs seen in April and May 2017.
  • Efforts are ongoing to stabilize and then improve same-store sales which were negative by around 5% previously.
  • New restaurant launches like Gong in Pune, expected to break even by third month, indicate growth focus.
  • Rationalization of costs with a targeted saving of approximately ₹90 lakhs per month (~₹10 crores annually) will support margins.
  • Expansion through franchise models planned in Middle East (Dubai, Bahrain), Colombo and potentially US markets.
  • Introduction of new concepts (progressive cuisine, digital app for Hoppipola) to revive customer interest and sales.
  • Optimistic about the benefits from stable raw material prices and good monsoon aiding cost of goods sold.
  • No definite price hikes planned but will monitor market conditions to adjust pricing as needed.

See what Speciality Restaurants Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

  • The call transcript from Speciality Restaurants Limited dated May 29, 2017, does not mention any current or planned fundraising through debt or equity.
  • Focus is primarily on operational improvements, cost savings, and international expansion through franchise models.
  • There is no discussion of raising funds via equity or debt during the call.
  • The management emphasizes working on cost rationalization, increasing same-store sales, and launching new restaurant formats to improve financials.
  • International expansion in Dubai, Colombo, and potentially the US is planned mainly via franchise partnerships, which typically do not require direct equity infusion from the company.
  • Overall, no explicit plans or announcements regarding equity or debt fundraising are disclosed in this earnings call.

See what Speciality Restaurants Ltd management said on order book — free account, 30 seconds.

Capex plans

  • The company is working on only one particular project currently, located in Mumbai's Kamala Mills area.
  • They are taking a "wait and watch" approach to this project before making further decisions on capital expenditure.
  • There is mention of international expansion plans via franchise models in locations like Dubai, Colombo, and possibly London, with some own investments potentially in London.
  • A partner in the Middle East is expected to open about 10 restaurants on a franchise basis, but the company is not putting its own money into these.
  • No specific quantified capex figures or other capital investments for FY 2017-18 were disclosed at this time.
  • The management emphasized cost rationalization and stabilization before further expansion or large capital investments.

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How does Speciality Restaurants Ltd rank vs peers in Leisure Services?

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