| Speciality Restaurants Limited | ||||
| Rating reaffirmed at 'CRISIL A-/Stable' | ||||
| Rating Action | ||||
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| Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||
| 1 crore = 10 million | ||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has reaffirmed its rating on the long-term bank facilities of Speciality Restaurants Limited (SRL) at ‘CRISIL A-/Stable’. CRISIL Ratings has also withdrawn its rating on the proposed fund-based bank limits of Rs.5.1 crore based on company’s request. This is in line with CRISIL Ratings’ withdrawal policy
The ratings continue to reflect SRL’s established market position supported by strong brands and wide geographic reach across the globe, and its robust financial risk profile. These strengths are partially offset by susceptibility to economic fluctuations and exposure to intense competition, leading to volatility in operating profitability |
Analytical Approach CRISIL Ratings has evaluated the standalone business and financial risk profiles of SRL. |
Key Rating Drivers & Detailed Description Strengths: Established position with strong brands and wide geographical reach: SRL has an established market presence and has around 18 brands under its kitty with Mainland China and Oh! Calcutta being the prominent brand. The company also has presence in confectionery segment with brands like Dariole and Sweet Bengal. Company has around 124 outlets with presence across 10 cities across India and also has 3 internation outlets.
The company also has presence across segments and different cuisines. On the back of diverse presence across geographies and segments, the scale of operations of the company are on an increasing scale as evidenced by a revenue growth of 5% in fiscal 2024 to Rs 387 Cr.
Robust financial risk profile: SRL has a robust capital structure with a healthy networth base of Rs 308.99 Cr as on March 31, 2024. Company has been debt free for the past five fiscal years through fiscal years 2024.
Company has cash and cash equivalents of Rs 172.79 crore indicating healthy financial flexibility.
Weakness: Susceptibility to economic fluctuations: Economic downturns like the covid pandemic, and inflation can lead to an adverse effect on the restaurant industry and SRL. Since SRL has a major presence in fine dining restaurants as against fast food joints it is more susceptible to downturns in the industry as reflected in moderate revenue and operating profitability in the past.
Operating margins of the company have remained volatile from 2%-22% in the past five fiscal years through fiscal year 2024. However, with adequate cost-cutting steps and standardization has led to the company being profitable in the last 13 quarters.
Exposure to intense competition: SRL faces intense competition from all the organized and unorganized restaurants having significant market share and changing consumer preferences. The company tries to mitigate this risk by innovating its menu and renovations done by it to attract customers. |
Liquidity: Strong Liquidity position is strong marked by estimated net cash accruals over Rs 57 Cr against nil repayment obligations. Bank limit utilization was not utilized for the last twelve months ending March 2024. Company paid a dividend of Rs 11.88 crore in fiscal 2024.
SRL has capex planned over the medium term which will be financed through internal accruals. SRL also raised Rs 24.5 Cr through share warrants in the last two fiscal years which also aided in liquidity. The company has cash surplus as evidenced by a cash and cash equivalent balance of Rs 172.79 Cr as on March 2024. |
Outlook: Stable CRISIL Ratings believes SRL will continue to benefit from its established brands and healthy financial risk profile. Sustenance of operating margin to remain monitorable. |
Rating Sensitivity Factors Upward Factors
Downward Factors
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About the Company SRL was promoted by Mr Anjan Chatterjee (Founder promoter) in 1999. The promoter entered the restaurant business by setting up Only Fish in 1992, followed by Mainland China, in Mumbai. SRL is now one of the largest fine-dining restaurant chains in India. Its brands, Mainland China, Asia Kitchen by Mainland China, Riyasat, Barishh, Episode One, Oh! Calcutta, Sigree/Sigree Global Grill, Haka, Flame & Grill, Café Mezzuna, and Hoppipola offer a variety of cuisines and dining formats. Sweet Bengal and Dariole are company’s confectionary brand. |
Key Financial Indicators
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
&BG limit of Rs 2.5 Cr and letter of credit limit of Rs 1 Cr is a sublimit of overdraft facility of Rs 4.9 Cr |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||
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Criteria Details
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