Specialty Restaurants Ltd: For the Special Ones who loves Food

Starbucks is not just a Coffee chain in USA….it is not something out of normal life. In fact its owners always wanted it to be a part of people’s life. And they have indeed made it a 3^rd most important place in anybody’s life after home and office. It has become a place where people come and absorb the atmosphere and leave afresh. Starbuck coffee is like a staple food for an ordinary American.

This is the meaning of a restaurant/Coffee House etc…these are not for selling food items. You come and leave with full stomach. It is much more than this…it is an experience, it relaxes your senses, you absorb the style quotient. But it is for a price not cheap….and so we Indian realize that we are yet to experience this style and intoxication. Because we were not having money earlier.

USA is a house for around 100 global restaurant and fast food chains which have multibillion revenues. Compare this to india and we have none. We are not having a local chain which have pan india presence leave out the dominance. We have heard the names of global giants Mcdonalds, Domino’s Pizza, KFC which are expanding like anything. Nothing Indian is on the scene. But leave Pizz and pasta, and we Indian do not like anything of Italian cuisine. So as is the case with Japanese (Sushi) and Chinese … we find most foods of these flat. This is true for any person from any country…he can try something sometimes but he will not cross his own cuisine.

So, we Indians have no chance of leaving our tasty creamy food because you won’t find like it anywhere. It is unique. But for us food was always homemade, mainly because so many of us could not afford to high quality food outside our homes.

All in all, I strongly feel that we are very near to have big ethnic Indian food chains. Biggest of Indian food chains are having revenues of 300 cr to 500 cr which is too  low for such a big country. Specialty Restaurants Ltd which is having around 120 restaurants all over india is one such company which can become a big player. It is having all the ingredients in place and after some time, the recipe will be there to relish. Its quality of food is awesome, service is top quality, rates are very reasonable. It is paying attention to every finer detail for making its food out of the world. Like for its Mainland China restaurants, which serves the authentic Chinese foods, import most of spices from china itself. It is the only one with Chinese food in india which tastes like real Chinese food. It is having Chinese cooks.

Mainland china is 57% of its total revenue, Oh Calcutta is 10%...so it has rightly focused on ethnic Indian cuisine now with Sigree , Machaan and Sigree Global Grill which serve the some of the best classical north and west Indian foods. It is having difficult times for past 1-2 years mainly because of high food inflation as due to low demand it was not raising the prices in its restaurants. It is also focusing on reducing its costs like local sourcing of most of the spices for Chinese food chain. 

But with inflation slowing and economic growth returning, it can surprise with the results. It can grow bigger as it is having nil debt with funds from IPO still lying in the books. Turnover is around 300 cr which is low. I am placing my bet on the scale of operation which is possible in india.

I have entered at 144/- in it and now it is at 160/-. I will post another analysis on this with more details but those who believe in the notion “A balance diet is a big piece of Tandoori Chicken in each hand” can invest in it for a long time.

(Views are personal and should not be taken as a recommendation for buying or selling a stock. Stock markets are inherently risky so kindly do your Due Diligence before investing)