Speciality Restaurants Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Speciality Restaurants Ltd trades at ₹142, in a confirmed uptrend and 9 weeks into that stage. That is +14.4% against its own 200-day average. It sits at 94% of a 52-week range of ₹90 to ₹145. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 22 straight weeks.

Today the stock is in a confirmed uptrend — week 9 of stage 2, confirmed. At ₹142 it trades +14.4% versus its 200-day average and sits at 94% of its 52-week range (₹90–₹145).

Against the market, two honest reads. Cumulative: over the last 10.4 years the stock moved +64% while the NIFTY 500 moved +259% — behind the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 22 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

Speciality Restaurants Ltd's story is not scored yet against the markers our research file set on 22 August 2026. Where it sits in its own cycle: MID_EXPANSION. Our fortnightly research layers last read it on 22 August 2026.

Our read, 22 August 2026. Speciality Restaurants presents a renovation-driven SSG turnaround that is constrained by a peak-margin value trap: trailing PE of 26.4 (50th percentile) masks a normalized PE of 46.3 (91st percentile) when mid-cycle margins are applied.

From the numbers. The trailing PE of 26.2 to 26.4 sits at the 40th to 50th percentile of historical valuation. While the matrix label displays STRONG_OPPORTUNITY based on smoothed contraction and early-stage momentum, the underlying…

From the price. Price stage 2, week 9 — above its 200-day line, relative strength rising.

From the research. Speciality Restaurants presents a renovation-driven SSG turnaround that is constrained by a peak-margin value trap: trailing PE of 26.4 (50th percentile) masks a normalized PE of 46.3 (91st percentile) when mid-cycle…

🚨 Where they disagree. The trailing PE of 26.2 to 26.4 sits at the 40th to 50th percentile of historical valuation. While the matrix label displays STRONG_OPPORTUNITY based on smoothed contraction and early-stage momentum, the underlying earnings cycle carries the deterministic PEAK_MARGIN_VALUE_TRAP classification. Operating margin in Q1 FY27 reached 19.17% (76th percentile) and Dec 2025 reached 21.09%, well above the 14.8% mid-cycle average. When margins normalize to the 14.8% mid-cycle level, normalized PAT contracts from 23 Cr to approximately 14 Cr and normalized EPS drops to 3.04, expanding the normalized PE to 46.3 (91st percentile). Optical valuation cheapness is therefore driven by cyclical margin…

What is proven. Speciality Restaurants presents a renovation-driven SSG turnaround that is constrained by a peak-margin value trap: trailing PE of 26.4 (50th percentile) masks a normalized PE of 46.3 (91st percentile) when mid-cycle margins are applied.

What is not proven yet. If same-store sales growth sustains above 8% across all formats for 3 consecutive quarters through FY27 AND operating margins remain above 18% on a TTM basis confirming structural cost efficiency rather than cyclical peak margins, that evidence would falsify the peak-margin value trap thesis and justify higher normalized earnings power.

🚨 What would change our mind. If same-store sales growth sustains above 8% across all formats for 3 consecutive quarters through FY27 AND operating margins remain above 18% on a TTM basis confirming structural cost efficiency rather than cyclical peak margins, that evidence would falsify the peak-margin value trap thesis and justify higher normalized earnings power.

🚨 Layer 1 read, 22 August 2026 — DROP. Revenue grows, profit per share does not - and the cheap-looking multiple is built on peak margins. Sales rose 16.8% in the June quarter and same-store sales hit 11.4%, but profit per share for the full trailing year is 4.86 versus 6.26 two years ago, so the chain is selling more and earning less per share. The 26.4x multiple only looks reasonable because margins are near a ten-year high; put the through-cycle 14.8% margin back and the same price is 46.3x, the 91st percentile of its own history. Management has also missed its same-store-sales guidance, missed its FY26 revenue guidance, and in August withdrew the FY27 revenue target it gave in May, which is why the timeline scores management 3 out of 10.

What would change Layer 1’s mind. Two consecutive quarters (Q2 and Q3 FY27) of same-store sales at or above 8% WITH trailing operating margin holding at or above 18% - which is the timeline's own falsification bar - AND trailing EPS clearing 6.26, its Jun-2024 level. That combination would prove the margin is a structural floor rather than a cyclical high and would flip this from a peak-margin trap to a genuine operating-leverage story. Conversely, operating margin below 16% for two straight quarters with flat same-store sales…

The test written in advance. Peak-Margin Value Trap — Peak-Margin Value Trap Sequential OPM contraction below 16% for 2 consecutive quarters combined with flat or negative SSSG. by the next result.

The test written in advance. Erratic Strategy Reversals and Guidance Inconsistency — Erratic Strategy Reversals and Guidance Inconsistency by the next result.

What the company does. Q1 FY27 delivered 11.4% same-store sales growth and 19.17% OPM following Mainland China refreshes and delivery expansion to 29% of sales. However, margins sit at the 76th percentile of history; normalizing to the 14.8% mid-cycle level cuts PAT by 37.5% and expands PE to 46.3 (91st percentile), validating the PEAK_MARGIN_VALUE_TRAP diagnosis. Unstable strategic guidance across consecutive concalls and unproven leadership transition add execution risk.

🚨 What the surface reading misses. The surface reading is: OPM of 19.17% indicates elevated operational profitability. The research reads it further: The 10-year OPM range spans -153% to 25.2%, with mid-cycle normalized at 14.8%. At 19.17%, the current quarter is 4.37 percentage points above the normalized level — elevated at the 76th percentile.

🚨 What the surface reading misses. The surface reading is: CCC deterioration suggests working capital normalization. The research reads it further: Payable days fell from 145 to 86 as the primary driver of CCC expansion. This reflects normalization of COVID-era supplier payment terms rather than channel stuffing — debtor days are stable at 5-7 days and inventory days minimally changed from 25 to 27.

Sources: our stock research file (22 August 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Speciality Restaurants Ltd reported ₹127 Cr of revenue in the Jun 26 quarter, +16.8% year on year. That is the 12th straight quarter of year-on-year growth. Over 10 years it has compounded at 4.0% a year. The last full year, FY26, came in at ₹476 Cr. The last four reported quarters add to ₹495 Cr.

Why this happened. The refresh program across aged Mainland China flagships produced an April rebound to 11.57% (C005) and full Q1 FY27 SSSG of 11.4% YoY (C031). Renovated outlets feature visible bars with bartender-led formats that lift beverage attachment and average cover value.

FY26 revenue came in at ₹476 Cr (+9.2% on the year), capping 10 years at 4.0% compound. The latest quarter (Jun 26) printed ₹127 Cr, +16.8% year on year — the 12th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +12.2% growth against the decade's 4.0% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +12.0% over the last 4 quarters against +9.4%/yr over the last 8 — stabilising; TTM profit +16.8% vs −14.3%/yr — accelerating.

FY26-Q4. revenue ₹116 Cr and profit ₹3 Cr as reported.

FY27-Q1. revenue ₹127 Cr and profit ₹7 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Speciality Restaurants Ltd's operating margin is 19.2% in the Jun 26 quarter, +2.8 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged −1.6% to 20.0%. The current quarter sits inside that band.

The latest quarter's operating margin is 19.2%, +2.8 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged −1.6%–20.0%.

Why the margin moved: operating margin went +2.8 pp year on year while gross margin went +1.2 pp — the gain came mostly below the gross line: operating leverage, with costs spread over a bigger revenue base.

FY26-Q4. revenue ₹116 Cr and profit ₹3 Cr as reported.

FY27-Q1. revenue ₹127 Cr and profit ₹7 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Speciality Restaurants Ltd earned ₹7.1 Cr of net profit in the Jun 26 quarter, +38.9% year on year. It is the 2nd consecutive quarter of growth. Full-year FY26 profit was ₹21.0 Cr. That is 5.6% of the quarter's revenue. The same quarter a year earlier earned ₹5.1 Cr.

Jun 26 profit was ₹7.1 Cr, +38.9% year on year — the 2nd consecutive quarter of growth. On the full year, FY26 printed ₹21.0 Cr (−4.5%).

Why profit moved: revenue contributed +16.8% and the margin +2.8 pp — the quarter was margin-led: most of the profit growth came from keeping more of each sale.

Pace comparison, last four quarters: profit +29.7% vs revenue +12.2%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

FY26-Q4. revenue ₹116 Cr and profit ₹3 Cr as reported.

FY27-Q1. revenue ₹127 Cr and profit ₹7 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 303% of Speciality Restaurants Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹85.0 Cr of operating cash against ₹21.0 Cr of profit. After ₹67.0 Cr of capital spending, ₹18.0 Cr was left as free cash.

FY26: operating cash of ₹85.0 Cr against reported profit of ₹21.0 Cr, leaving free cash of ₹18.0 Cr after ₹67.0 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 303% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 303%: the cash cycle stretched 159 days between FY21 and FY26 — more of each rupee of profit waits inside the cycle before arriving.

Router verdict: the bigger cash user is investment — capital spending ran 1.5× depreciation over three years, so the next section's job is to check what that build-out is buying.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Speciality Restaurants Ltd's cash conversion cycle runs −53 days in FY26, up from −212 days in FY21. Capital spending ran ₹223 Cr over the last 3 years. At FY26 sales of ₹476 Cr each day of that cycle holds about ₹1.3 Cr, so roughly ₹−69.0 Cr sits inside the business at any moment.

Why this happened. Delivery contribution reached 29% of revenue in Q1 FY27 (C032), supported by integrated restaurant kitchens fulfilling Haka and Walters orders without standalone capex. Concurrently, packaging technology extended Sweet Bengal shelf life to 30 days (C034), opening wider-market retail channels.

FY26: debtors at 5 days, inventory at 27 days — roughly 0.9 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of −53 days, looser than FY21's −212.

The full loop: cash goes out to suppliers and production on day 0; stock waits 27 days to sell; customers pay about 5 days after that; and suppliers themselves are paid at 86 days — netting out to the −53-day cycle.

In money terms: at FY26 sales of ₹476 Cr, each day of the cycle holds about ₹1.3 Cr — so the −53-day loop keeps roughly ₹−69.0 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹223 Cr over the last 3 fiscal years against ₹147 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹30.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Speciality Restaurants Ltd earns a ROCE of 8% in FY26. That is up from a trough of −9% in FY17. Return on invested capital clears the cost of that capital by −5.4 percentage points, so growth here is not yet paying for the capital it uses. The wiring behind it is 4.4% net margin on 0.85× asset turns.

FY26 ROCE is 8%, recovered from a FY17 trough of −9% — the full ladder below shows the fall and the climb, undoctored.

🚨 Why the return is what it is — the wiring (FY26): 4.4% net margin × 0.85× asset turns × 1.61× balance-sheet leverage ≈ 6.0% on equity. Margin does its share; leverage is a meaningful part of the equation.

The capstone test — ROIC − WACC: 6.6% − 12.0% = a −5.4 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. Negative — growth at these returns destroys value until the returns recover.

Debt Debt-to-equity says how much of the business is funded by borrowings; interest cover says how many times operating profit pays the interest bill. Low and high, respectively, is the safe corner.

Speciality Restaurants Ltd carries ₹140 Cr of borrowings against ₹346 Cr of equity in FY26, a debt-to-equity of 0.40. Operating profit covers the interest bill 6×. Over 5 years borrowings went from ₹141 Cr to ₹140 Cr. Capital spending ran ₹223 Cr across the last 3 of those years.

FY26: borrowings of ₹140 Cr against equity of ₹346 Cr — a debt-to-equity of 0.40. Operating profit covers the interest bill 6×. Over 5 years borrowings went from ₹141 Cr to ₹140 Cr while capital spending ran ₹223 Cr in just the last 3 — the build-out is being paid for out of cash, not debt.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Domestic institutions cut 1.6 points of Speciality Restaurants Ltd over 8 quarters, the biggest move on the register. That takes domestic institutions to 0.0% of the company. Promoters moved +0.5 points over the same window, to 50.7%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Domestic institutions: −1.6 points over 8 quarters to 0.0%; Promoters: +0.5 points over 8 quarters to 50.7%; Foreign institutions: +0.3 points over 8 quarters to 0.5%.

🚨 Why the register moved: domestic institutions drove it (−1.6 points), absorbed on the other side by promoters (+0.5 points) — distribution into the market’s bid.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Speciality Restaurants Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Speciality Restaurants Ltd trades at 26.6× P/E, mid-range by its own standards (52nd percentile). Its long-run median P/E is 26.5×, measured across 10.6 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 26.6× is mid-range by its own standards (52nd percentile), against a long-run median of 26.5× measured over 10.6 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +0.4% against a +14.2% price move — the price outran earnings, pushing the multiple UP its own range.

The price move, decomposed: over 3y, of the −13.2%/yr price move, ~−34.3%/yr came from earnings growth and ~+21.1 pp from the multiple (expanding). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is unremarkable against its own past, so the story rests on the earnings line underneath it, not the multiple.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 26 August 2026 price, Speciality Restaurants Ltd was paying for profit growth of about 20.9% a year. Today the market pays 26.6× P/E, the 52nd percentile of its own 11-year range.

What the two numbers say together. The multiple is unremarkable against its own past, and the growth the price is paying for is the whole of what a buyer is backing.

How to hold this number: it is a reading of one day's price, taken on 26 August 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 11 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Improving Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Speciality Restaurants Ltd reads as improving on its fundamental arc. Improving — profit growth bottomed 6 quarters ago at −66.3% and has held its recovery at +16.8%, ROCE slipping at 8.0%. The read is built from 9 quarters across 4 curves, on partial evidence.

Why it matters: a sustained climb off the trough is the setup this page is built to catch — the question moves to what you pay for it.

Return readings here are annual, not quarterly — read as level and direction only; they can confirm the growth curves but never drive the stage on their own.

A partial read: at least one curve is short, or the returns curve is not the computed quarterly series — hold the stage word a little more loosely.

4-Factor Sector Score

62.8/100 — rank 1 of 8 in Quick Service Restaurant - QSR · 81% evidence confidence

Speciality Restaurants Ltd scores 62.8 out of 100 against the 8 companies it is compared with in Quick Service Restaurant - QSR, ranking 1. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 20.6 + 18.1 + 11.5 + 12.6 = 62.8. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Said versus delivered

What Speciality Restaurants Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Walters Expansion Guidance Increased Materially · 11 August 2026. In the Feb 2026 call, management planned 3-5 Walters restaurants in the next year alongside 8-10 regular restaurants. In the Aug 2026 call, the Walters plan had increased to 10-15 outlets, a material increase of at least 100%, with only limited explanation that Walters was now on a growth path.

Expansion Strategy Shifted From Asian-Centric to Three Equal Verticals · 11 August 2026. In the Nov 2025 call, management said its primary expansion goal was limited to the Asian segment and identified Asia Kitchen as the primary growth brand. In the Aug 2026 call, management stated that Oriental, Italian, and QSR would receive equal weightage, making QSR an equally prioritized strategic pillar without reconciling the change from the earlier Asian-centric strategy.

Strategic Pivot on Italian Brand Expansion · 20 May 2026. In the Nov 2025 call, management highlighted their Italian brand, Siciliana, as a primary growth engine and a core focus area for casual dining expansion. However, in the May 2026 call, Siciliana was entirely excluded from the list of company focus brands, and management explicitly stated that none of their other brands would undergo further expansion.

Contradictory Expansion Guidance for Walters Brand · 20 May 2026. The company drastically altered its opening target for the Walters brand in just three months without explaining the shift. In the Feb 2026 call, management guided for only 3 to 5 new Walters restaurants for the year. In the May 2026 call, this target tripled to 15, yet confusingly, Walters was explicitly excluded from management's official list of target "focus brands" for future expansion earlier in the very same call.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions