Speciality Restaurants - Q4FY13 results - Maintain Recommendation BUY; Target 228 - Anand Rathi

Speciality Restaurants Ltd. (SRL) is the only multi brand fine dining restaurant chain which has been operating in India for the past 18 years. 96 Restaurants serving Quality Food in Modern Ambience along with 14 Confectioneries (as on March 31, 2013)

Highlights - Good set of numbers

- The top line for the company grew by 23% and bottom line grew more than double on y-o-y basis. This was majorly contributed by volume growth and rationalising cost by reducing the manpower cost and training the present manpower and making them efficient enough.

- Margins have also improved, with EBITDA margins improved from 14.27% to 14.46% and PAT margins improved from 4.83% to 9.14% in the quarter compared to last year quarter. Bottom line was contributed by massive reduction in the interest cost.

- For FY13 revenue contribution - 62% Mainland China, 10% Oh Calcutta, 10% Sigree/ global Grill, 5% Flame & Grill, 3% Machaan, 3% Haka, 5% Sweet Bengal and 2% Others.

- A new concept of dining (Sigree) and latest addition to the group portfolio, inspired by changing taste-buds, launched in February 2013 which has also further added to the bouquet of offerings.

- The much awaited all day and bar restaurant Rs. Mezzuna' started in April 2013. It has higher cover trunover as it is open for a longer time from 9am to 12 mid- night. They are getting good response for the same.

- Company has opened 14 restuarants in FY13 and further plans to continue with its expansion in FY14 as well. It further plans to open 15-16 restaurants in current fiscal as well. Pressure on discretionary spends is still to continue but with price hikes expected in coming 2-3 months coupled with volume growth will help the moementum to continue.

- Therefore we remain positive on the stock and maintain our Buy recommendation and target of Rs. 228 on the stock.

Source : Equity Bulls

Keywords