Speciality Restaurants Limited

Consumer Cyclical — Restaurants · NSE

₹143.88+₹1.13 (+0.79%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:51 pm

Understanding the Business

Company site ↗

The 60-second version of Speciality Restaurants Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Speciality Restaurants Limited owns and operates restaurant outlets and sweet shops in India and internationally.

IndustryRestaurants

SectorConsumer Cyclical

Employees2,590

Annual revenue₹476 Cr

How does it make money?

Turns over ₹476 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 2,590 employees supports ₹18.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹18.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 8.9% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE25.9%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +27% while net margin moved -82% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+27%

Margin effect-82%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 6.3% is weak
✗ ROE has fallen by 28.7 points over the period

Quality vs. Valuation

Company Quality

48/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

62/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

29.6x

3Y Median

22.5x

40 monthly readings · mean 21.0x · range 8.3x–34.1x

Sector Median

69.2x

median of 4 sector peers

⚠️Current valuation is approximately 32% above its 3y median of 22.5x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 57% below the peer median of 69.2x.

vs. its own history

Expensive

22.5x median over 40 months · +32%

vs. sector peers

Cheap

69.2x median of 4 peers · -57%

vs. generic bands

Fair

15x–35x

EV/EBITDA

9.1x

PEG

0.80

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 35.0% to 6.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 19.7% to 8.9% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 watch

🟡Profit is decliningFinancial
Net profit is down 77% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 4.6 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 57% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹36 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 23.6% to 19.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 32% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 35.0% to 6.3%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 17%✓ 19.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ 2.9x
How much operating profit can fall before interest stops being comfortably covered.
3Revenue growth stays above 6% a year✓ 8.3% CAGR
Latest reported year was 16.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹36 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

Investment Checklist

8 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹694 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

29.6x

Fair

Fairly valued against the generic band

P/B Ratio

2.00x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.86

Profitable

Profitable on a per-share basis

ROE

6.3%

Weak

Weak capital efficiency

ROCE

8.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.39x

Low

Conservative leverage

Revenue Growth (YoY)

16.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

36.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.70%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹36 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

7.0%

Average

Average margins

Net Margin

4.7%

Average

Average bottom-line conversion

Current Ratio

2.53

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.23

Defensive

Steadier than the market

52W Range Position

72%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

149.1 / 144.8

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

33.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹375 Cr	₹405 Cr	₹436 Cr	₹476 Cr	+8.3%
EBITDA	₹89 Cr	₹78 Cr	₹79 Cr	₹91 Cr	+0.8%
EBITDA Margin	23.6%	19.4%	18.0%	19.0%	—
PAT (Net Profit)	₹97 Cr	₹29 Cr	₹22 Cr	₹22 Cr	-39.1%
EPS	₹20.5	₹5.96	₹4.51	₹4.52	-39.6%
ROE	35.0%	9.6%	6.6%	6.3%	—
ROCE	19.7%	11.7%	9.4%	8.9%	—
Total Debt	₹142 Cr	₹139 Cr	₹154 Cr	₹140 Cr	-0.5%
Free Cash Flow	₹70 Cr	₹34 Cr	₹36 Cr	₹36 Cr	-19.7%

🟢 Revenue has grown at 8.3% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (0.8% a year).

🔴 EBITDA Margin has fallen from 23.6% to 19.0% over 3 years (-4.6 pts).

🔴 PAT (Net Profit) has shrunk at 39.1% a year over 3 years.

🔴 EPS has shrunk at 39.6% a year over 3 years.

🔴 ROE has fallen from 35.0% to 6.3% over 3 years (-28.7 pts).

🔴 ROCE has fallen from 19.7% to 8.9% over 3 years (-10.8 pts).

🟡 Total Debt has been broadly flat over 3 years (-0.5% a year).

🔴 Free Cash Flow has shrunk at 19.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹558 Cr

Total Liabilities

₹199 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹85 Cr

Capex

-₹49 Cr

Shareholding (proxy)

Institutional Holding

0.5%

Insider Holding

75.2%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

04 Sept 2026

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

2 positive1 mixed3 general

Should Weakness in Speciality Restaurants Limited's (NSE:SPECIALITY) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?

Simply Wall Street, 04 Feb

Speciality Restaurants Upper Circuit Today: Price, Data and Peers

Univest, 05 Oct

Speciality Restaurants hosts Q1FY27 earnings call on Aug 11

scanx.trade, 11 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Speciality Restaurants consolidated net profit rises 29.63% in the June 2026 quarter

Business Standard, 11 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Speciality Restaurants Q1 Profit Jumps 29.6% to ₹7.00 Crore, Sales Rise 18%

Sahi, 10 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Restaurant Brands Asia Share Price News After 5.19% Gain

Univest, 14 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingRisk

WeakBusiness Quality · Growth · Profitability · Valuation

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

1 of 5 tripwires tripped — Interest cover stays above 3x · see Key things to watch ↑