Speciality Restaurants Limited , the operator of popular restaurant brands including Mainland China, Asia Kitchen, and Oh! Calcutta, has reported a mixed performance for the first quarter of fiscal year 2026. The company saw a modest growth in total standalone income while facing challenges from the withdrawal of service charges.

Financial Highlights

• Total standalone income grew by 3.04% year-over-year in Q1 FY2026
• Gross margins improved to 70.20% from 69.20% in the previous year
• EBITDA margins on operations increased from 4.50% to 6.20%
• Same-store sales growth was flat to slightly negative
• The company maintains a treasury of INR 163.80 crores

Operational Updates

• Service charges were withdrawn from March 29, 2025, impacting the top line
• The company continues to spend 5% of revenues on aggregator platforms
• Delivery business contributes 24% of total revenue
• 11 cloud kitchen operations are currently in operation

Expansion and New Ventures

• Opened Siciliana by Café Mezzuna, an Italian brand, in Forum Mall, Kolkata
• Launched a pilot Walters Burger store in Andheri West, Mumbai
• Plans to open 7 new Asian restaurants and 2 Italian restaurants in FY2026

Management Outlook

During the Q1 FY2026 earnings call, Mr. Rajesh Mohta, Executive Director - Finance and CFO, provided insights into the company's performance and future plans:

• The company expects business improvement in the September to December period
• Management is working towards achieving 10-15% revenue growth guidance
• New restaurants typically take 3 to 6 months to break even at the restaurant level
• Renovated and converted Mainland China locations have seen 20-30% annual revenue growth
• The company is exploring expansion opportunities in Hyderabad, particularly in mall locations

Mr. Avik Chatterjee, Whole Time Director, highlighted the company's strategy for cloud kitchens and new brand development:

• Speciality Restaurants operates 11 pure cloud kitchen operations across multiple cities
• The new Walters Burger brand has shown potential, with plans to open 3 more locations this quarter
• The company is leveraging existing restaurant spaces to operate dark kitchens for multiple brands, maximizing asset utilization

Despite challenges such as the service charge withdrawal, Speciality Restaurants Limited remains focused on expansion and diversification of its brand portfolio. The company's strong cash position and strategic approach to new restaurant openings and renovations indicate a cautious but growth-oriented outlook for the remainder of FY2026.

Speciality Restaurants Limited , a leading player in the casual dining and confectionery sector, has announced its financial results for the first quarter, marking its 16th consecutive quarter of profitable operations.

Financial Highlights

The company reported consolidated revenue from operations of ₹10,877.19 lakhs for Q1, representing a 5.5% increase from ₹10,311.20 lakhs in the same quarter last year. However, profit after tax (PAT) saw a decline, coming in at ₹512.12 lakhs compared to ₹764.37 lakhs in Q1 of the previous year.

Operational Performance

Speciality Restaurants continues to maintain its market leadership in the Pan-Asian/Oriental cuisine segment. The company operates a diverse portfolio of 124 outlets across multiple brands, including Mainland China, Asia Kitchen, Oh! Calcutta, and Sweet Bengal. Its presence spans 25 cities in India, with international locations in London and Dubai.

Sales Composition

The company's sales composition shows a strong preference for dine-in experiences:

• Dine-in sales: 76.1% of restaurant sales
• Delivery sales: 23.9% of restaurant sales

This breakdown indicates a robust recovery in the dine-in segment post-pandemic, while still maintaining a significant delivery presence.

Brand Performance

Mainland China and Asia Kitchen collectively contributed 42% to the company's brand-wise revenue in Q1, highlighting the strength of its Pan-Asian offerings. Oh! Calcutta and Sweet Bengal also showed strong performances, each contributing 13% and 7% respectively to the brand-wise revenue.

Expansion Plans

Speciality Restaurants has outlined its expansion strategy, focusing on both new openings and brand refreshes:

• Scheduled openings in key markets including Chandigarh, Mumbai, and Pune
• Brand refresh initiatives for existing Mainland China and Asia Kitchen by Mainland China restaurants
• Expansion of the Episode One brand, noted as one of the company's most profitable formats

Management Commentary

Indranil Chatterjee, Deputy Managing Director, stated, "We have successfully put the pandemic behind us and achieved the sixteenth consecutive quarter of sustained profitable growth. We continue to dominate with our market leadership in the Pan-Asian/ Oriental cuisine segment."

He further added, "Given that our versatile brand portfolio enjoys a strong recall and customer loyalty, we hope to further strengthen our brand presence in the minds of our customers by continuing to focus on giving every diner the perfect guest experience and making them feel special."

Outlook

While the company has shown resilience with continued profitability and revenue growth, the decline in profit after tax suggests some challenges, possibly related to increased operational costs or market pressures. However, with its strong brand portfolio, expansion plans, and focus on customer experience, Speciality Restaurants appears positioned to navigate the evolving dining landscape.