Speciality Restaurants Limited , a leading player in the Indian restaurant industry, has reported encouraging results for the second quarter of fiscal year 2026, demonstrating resilience in a challenging market environment. The company's strategic focus on Asian cuisine and selective brand expansion has contributed to its positive performance.

Financial Highlights

• Profitability streak continues for the 17th consecutive quarter
• Same-store sales growth (SSSG) improved to 1.39% compared to -1.31% in the previous quarter
• Gross margins increased to 70.4% from 69.3% year-on-year
• EBITDA margins on operational basis improved to 7.1% from 6.2% (excluding treasury income)

Strategic Focus on Asian Cuisine

Avik Chatterjee, Whole-Time Director of Speciality Restaurants, emphasized the company's strategic direction: "We have made sure that we will only be expanding into the Asian segment as our primary goal." The company is concentrating on expanding its 'Asia Kitchen by Mainland China' brand in high streets and malls.

Brand Consolidation and Expansion

The company is consolidating its brand portfolio and focusing on key growth drivers:

1. Asia Kitchen by Mainland China (Asian cuisine)
2. Siciliana (Italian and Mediterranean cuisine)
3. Sweet Bengal (QSR format)
4. Walter's Burger (QSR format)
5. Gong (Modern Asian format with wet-led component)

Cloud Kitchen Strategy

Speciality Restaurants currently operates 11 cloud kitchens. However, the company is shifting its focus to a 'kitchen-within-kitchen' format to better utilize existing assets. Avik Chatterjee stated, "We would be having dark or cloud or kitchen-within-kitchens from every single restaurant that we open in the future."

Expansion Plans

Rajesh Kumar Mohta, Executive Director, Finance and CFO, outlined the company's expansion strategy: "We are envisaging that going forward, we should be opening between 8 to 10 restaurants in a 12-month period." The company is targeting smaller format restaurants with carpet areas ranging from 2,500 to 3,000 square feet, a reduction from their earlier formats of 3,500 to 5,000 square feet.

Financial Position

As of September 2025, Speciality Restaurants reported a strong cash position of 157.42 crores, invested in mutual funds and INVITs.

Outlook

While the company faces challenges such as weekday dine-in pressure and the need for skilled manpower, management remains optimistic about growth prospects. The focus on core brands, particularly in the Asian cuisine segment, and the strategic expansion of formats like Siciliana and Gong are expected to drive future growth.

Speciality Restaurants' ability to adapt to changing market dynamics, focus on profitable segments, and maintain a strong financial position positions it well for continued success in the competitive restaurant industry.

Speciality Restaurants Limited , a leading player in the Indian restaurant industry, has reported robust financial results for the second quarter of fiscal year 2026, marking its 17th consecutive profitable quarter.

Key Highlights

• Same-store sales growth of 41.39%
• EBITDA margins improved to 7.1%
• Gross margins increased to 70.4%
• Focus on Oriental cuisine expansion
• Plans for 8-10 new restaurant openings annually

Financial Performance

Speciality Restaurants achieved a remarkable 41.39% same-store sales growth in Q2 FY26, showcasing the company's strong recovery and operational efficiency. This growth is particularly noteworthy as it represents a significant improvement from the previous quarter's -1.31% same-store sales growth.

The company's profitability also saw substantial improvements:

These improvements in margins reflect the company's effective cost management and operational strategies.

Strategic Focus

Speciality Restaurants is concentrating its expansion efforts on Oriental cuisine brands, particularly Asia Kitchen by Mainland China. The company is also venturing into the Italian segment with its new format, Siciliana.

Mr. Avik Chatterjee, Whole-Time Director, stated, "Asia Kitchen by Mainland China continues to be our primary growth brand. You would soon see many other locations up and running in the following quarters."

Expansion Plans

The company plans to open 8-10 new restaurants annually, focusing on:

1. Asia Kitchen by Mainland China
2. Siciliana (Italian cuisine)
3. Gong (Modern Asian format)
4. Sweet Bengal (QSR segment)
5. Walter's Burger (QSR segment)

Financial Position

Speciality Restaurants maintains a strong financial position with cash reserves of 157.42 crores, invested in mutual funds and INVITs. This robust cash position provides the company with ample resources for its expansion plans.

Outlook

The management expressed optimism about the upcoming quarter (October-December), traditionally the strongest for the restaurant industry. They anticipate further improvements in same-store sales growth, potentially reaching 2.5% to 5%.

Mr. Rajesh Kumar Mohta, Executive Director, Finance & CFO, commented, "The kind of euphoria which has been built up because of the GST rationalization, etc., we are working hard towards it so that at least this growth, whether we will be able to achieve 15%, but we would be lower to that number."

Speciality Restaurants' focus on its core competencies, particularly in the Oriental cuisine segment, coupled with strategic expansion into new formats like Siciliana and Gong, positions the company well for sustained growth in the coming quarters. The management's cautious optimism and focus on operational efficiency suggest a promising outlook for the company in the dynamic Indian restaurant market.