Speciality Restaurants Limited (534425) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Speciality Restaurants Q1 FY '25 Results Conference Call, hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Karan Bhuwania, from ICICI Securities. Thank you, and over to you, Mr. Bhuwania.

Thank you. Good afternoon, everyone. It's our pleasure at ISEC to host Q1 FY '25 Results Conference Call of Speciality Restaurants. From the management, we have Mr. Anjan Chatterjee, Chairman and Managing Director; Mr. Avik Chatterjee, Whole-Time Director; and Mr. Rajesh Kumar Mohta, Executive Director, Finance and CFO. I would like to hand over the call to Mr. Anjan for his opening remarks now, and then we can open for Q&A post that. Thank you. Over to you, sir.

Thank you. Thank you so very much. Very good evening to all the ladies and gentlemen. Thank you for being on the call. I'm sure you've seen the results, so I'm not elaborating any details about the numbers, which have been given to you, and I'm sure it's already on the website. Just to tell you the macro picture, the quarter depressed numbers compared to what we should have done, but of course, year-on-year, quarter-wise, we are slightly more, nothing significant. But we have not been able to reach the number because of the reason that we had opened 3 stores in this particular -- by the time they have had operational ability during this particular quarter. And as all of you know that our company over a period of time has actually gone through a cycle in which we have understood that within the brand basket, the Asian part, that's the Chinese part, Mainland China and Mainland China Asia Kitchen has been the -- is the growth engine now, while Asia Kitchen will be in malls, most of the places where -- and the Mainland China continues to be the [indiscernible] standalone. Now with that in mind, we have already surged ahead. We've done seeds. And all the EBITDA -- if you see that there's a little coming down from the expected levels is because of the fact that these restaurants have opened and they take anywhere between 9 to 12 months to breakeven, so that's one. As you know, that with every opening in the growth, there is some hurt on the short-term and midterm profitability, which gets covered over a period of time because we need the top line to grow, that's been one thing. Inflation also hurt us, although we've tried our best to do device mechanisms to get cash discounts from people. We have suppliers who've been with us. But this time, they were actually against the wall. So we had to adjust and accommodate them. So that has been a food cost component, which has gone up. There are also -- there have been hiccups during this period of time, which is not directly happening every year or every time, like, for example, there was elections this time. So many places like Bangalore, et cetera, where food and beverage both, wherever you have a bar, you have to shut it. So all restaurants were shut for on an average of 3 to 4 days with the results coming and counting, as you all know. So this has also fallen in June. So during that period of time, between May and June. So that's also been an effect. So weekends also have been affected, 2, 3 weekends. As you know, the weekends are prime business for us. And these are the reasons. I'm not wanting to give too many reasons saying that what we have done is the best, we could have done better. There's been one headwind from the market, which is the last thing I want to express that the revenge eating, which used to be there, if you see the -- I'm not saying that just because the others have not done so well, we should have also not done well. But it's an overall headwind which has gone into the market, wherein whether it's a QSR or a dining restaurant, any one of them, any listed chain or unlisted also have gone through a kind of a phase in the first quarter, which is not the best. So hence, all of us have felt the pressure. And going forward, fingers crossed, with the number of restaurants that we intend opening till this end of fiscal '25, we are looking at between 6 to 8 restaurants, which are under fit-out, 3, 4 of them almost, some by Durga Puja in Calcutta, some in terms of Oberoi Mall, we have 2, 3 restaurants -- 3 restaurants there. And the ones which are also happening in Bandra and the one which has happened just now in Thane. So the growth engine continues to be the Oriental and the one which Avik, my son, who's on the call, had started, which is called the Episode One, which is the wet-led one, which is existingly in Powai, which is going to be starting off this month itself in Thane, Viviana Mall. And the third one is coming in [ Bombay, ] Bandra. So this is the overview. And we are extremely happy on one thing that we've got a runway back. We've got a track back. Our brand rationalization in terms of the brand basket has been very clear. And one thing I forgot that during this period of -- we had one restaurant called Haka, which is again Oriental in Calcutta was shut for 3 months because of renovation. Because renovations is one thing we have to do because over a period of 10 years, we've not been able to refresh our restaurants completely, like -- we've done the Andheri West. We've done the ICC in Pune. The Powai restaurants also become new because we've shifted the location. So that's another part which will continue to be having a hindrance of 2 to 3 months. Like, for example, today, as we talk, Malad, Infinity, which is Mainland China, we are going to be changing it to Asia Kitchen by Mainland China. The good news is that wherever we have done renovations, wherever we have done this and where -- Avik has put the bar in line of sight, we've seen a surge in the liquor business, which gives us better margin in a fine dining restaurant. And also additionally, that any refreshed look because with God grace, Mainland China continues to be having all pillars intact in terms of brand standards, but the interiors were not matching because 10 years is a long time that we dragged ourselves. But just before pandemic, we were supposed to renovate -- by the time pandemic came in, it got delayed. So now we are absolutely -- one mode is expansion with rationalized brands, the ones which have the right store matrix and the other one, which is from a point of view of renovating and giving them fresh lease of life and look, feel, make it slightly more modern, contemporary, which actually any customer wants, but today's customer is more and more demanding, as you know. So that, I think, is the overview. Now I would like any other questions to be asked or anything specific -- Avik, do you want to add to anything that I have missed out or Mr. Mohta?

I think very well put together. So I think the 3 -- just to summarize what you said, the 3 growth engines would be Asian expansion brands like Asia Kitchen by Mainland China and Mainland China, wet-led, which we call as liquor-driven, food supported, which would be Episode One. And the third one would be the delivery wing because we're very strong in deliveries with having one of the industry's highest AOVs, which is average order volumes. We would be spending money on the marketing and grab new market shares, and that should hopefully also grow.

[Operator Instructions] The first question is from the line of Deepan Sankaranarayanan, TrustLine PMS.

So firstly, how has been the response of newly renovated outlets during the quarter? So what kind of incremental growth we are able to see from these renovated stores?

Avik, would you like to take this? Or Mohta Ji?

Thank you for the question. So wherever we have undergone a renovation and introduced a new menu, new branding, new bar, we have seen anywhere between a 15% to 25% growth in the dine-in revenue, whereas our delivery revenue has also grown because of the new additions and the new brand refresh.

Okay. Okay. And what is the kind of contribution of liquor business in terms of sales? And where do you see this contribution increasing over next 3 years?

So initially, before renovation, it used to be between 6% to 7%. Post renovation, this has doubled, and we are also hoping for a rise from here.

Okay. Okay. So are we expecting the contribution to double over the next 3 years?

Yes, absolutely.

Okay. And during the quarter, we have seen that you opened a new QSR brand, Walters Burger. So how do you see this brand shaping up? And any plans of scaling up on this brand? And how is it different from our other brands in terms of revenue per store or EBITDA metrics?

Sure. So Walters Burger has started off as a delivery-only service. So currently, we are sweating our assets wherever we have restaurants, kitchen, manpower, the same manpower would be utilized to be manufacturing these products and delivered via aggregators. We have tried this in 3 units as of now in Mumbai City. And very soon, this would be pan-India through all our kitchens. And the profitability is -- profit margins are very high in this because we are not adding any cost and this becomes an entire new product division. Also, we have plans to make this a hybrid model. For example, in Borivali mall in Mumbai, we'd be putting up our first Walters burger shop. This is going to be 1,000 square feet or 900 square feet approximately sized QSR model, which would be serving fresh gourmet burgers to clienteles along with some side, shakes, et cetera. This would be our burger QSR going forward.

The next question is from the line of Nitya Shah from KamayaKya Wealth Management.

I wanted to first understand what was the percentage of top line from delivery-based revenue?

Yes. So that was 26%.

Okay. And secondly, I wanted to understand is I saw that a certain amount of warrants have been forfeited. So what would be the cash balance left with the company after these warrants have been forfeited?

This is Rajesh Mohta. Post the forfeiture, the money which is -- the amount which has come is INR 52 crores from the warrants issue. We currently are having those invested part of the money which has been invested into mutual funds and partly being utilized for the objects of the issue of renovation and the new restaurants.

Right, sir. And currently, are there any other plans of -- you had mentioned in the last con call that some announcements would be made regarding some inorganic kind of acquisition at the moment. But considering that the other income is a very large part of our profitability, which also in turn ends up suppressing the return on equity due to the high cash balance. So what are the plans to utilize this cash to reward the shareholders?

Mohta Ji. Sir, acquisition opportunities, et cetera, if you yourself can update, sir?

Yes. So frankly speaking, we have had money on the balance sheet. We know treasury has been slightly heavier than it should have been. Pandemic ruined 1.5 years, we were almost [indiscernible] an international brand. The brand itself went back, they're not coming to India, an Oriental brand. So they've deferred their plans. They've gone back to UAE, et cetera. Now the most important point is that if we want to do anything inorganic, it's extremely important to see that the ones which are coming in the market necessarily have to have a positive EBITDA and a potential. But without a potential or an EBITDA, if somebody is trying to ask for heaven and earth, I don't think it's worthwhile. There was like this one, which was coming International, which was a very good oriental brand, I don't want to name it. They've deferred their plans. In fact, they're coming maybe in next year or 1.5 years, we have been in conversation with them. So we had kept absolute money about -- to take that over, just around the pandemic they deferred. But the kind of -- you know the players which are there. I mean there's just one handful of players who are making money in this business. We are not in QSR. So even QSR, one of the burger brands, which we were talking about growing very fast, but they were unable to actually get into a level of profitability in the next 3 years, 4 years. So if my throughput now with the number of restaurants that we are going to be opening is going to be more in the -- you will see over a period of time that what we are wanting to build and the number of stores like as we talk, I'm just coming back from Powai, sorry, I'm taking the call from the car. So we've just locked in 3 spaces in Powai. Now I think that Powai is gold for us. It's very difficult to get any space, but we've been able to lock in some good spaces just now. So as we talk, we are getting the right real estate. We are marrying it. So I think that the return on our investments going forward will be much higher. So if there is an opportunity at any given point of time, we'll take it. But we would not like to -- we've done so many mistakes earlier, getting into expansion mode, thinning ourselves, spreading ourselves too fast. cannibalization. So we don't want to get into any of those boats and that includes the inorganic acquisition wherein we are -- unless otherwise we find it suitable enough to be loaded on our balance sheet, we will not. For example, you asked me a pertinent question. Chourangi is the international franchise, the one which is owned by the company, co-owned in fact, Aditya Ghosh, who is the ex-Indigo, is a business partner of ours there. So we are -- in fact, we have a setup in London, which can actually expand it to the U.S. So if that comes in, we have in and around INR 10 crores, INR 12 crores to be paid only to do that. And if you see the kind of returns on that particular unit itself, there's been a very, very optimistic levels of coming up. So we have so many opportunities now that things are opening -- have opened up, except a bit of a global trouble, which is going on, beyond our control. I think there will be many more opportunities, and you will see this particular money getting depleted in no time, and you will be very happy that we'll be able to get equities. The fund will be -- we'll get many -- much more return on the equity.

Got it, sir. That was quite helpful. So I just -- I'm quite heavily invested in our company since a couple of quarters. So the reason I had -- presentation, which showed the road map, next 4 to 5 years, you want to double your revenue and triple it in the next 6 years. So without any inorganic expansion, do you see yourself continuing to fulfill that target of tripling your revenue, say, in the next 5 to 6 years?

See, I'm quite confident of the fact that the way we are going, the kind of return on investment, the kind of real estate we have been able to sign in short, midterm, I think we will be able to -- our target would be that. I don't know where we'll be 100% reaching there. But we are very confident of the fact that -- but then an inorganic acquisition, even if we don't touch the milestone or we are unable to do it by 10%, 15%, 20%, it's not the right thing to get into an acquisition just to prove it to my investors that I am going in and I'm doing inorganic and I'm putting this money and then losing that money and eventually loading our balance sheet, which has been, by and large, shaping up very nicely. So I wouldn't like to do that. But [Foreign Language], everything goes well. I think we are speeding up our growth at a very fast pace. And that includes -- we are going to be inducting a CEO. Finally, we've been able to get somebody of choice. So maybe within this fiscal by the end of the year, you will see somebody very competent who's coming in to independently run the company and get us guided and also who will be reporting to the Board directly. And I think a very checkered career, somebody who's proven and turned around the companies that he has worked with beverage, food, et cetera, et cetera. So there are lots of good things which are happening, and I'm quite confident that we will be able to reach our targets, if not by falling short by even if 10%, 15%, but profitable growth.

So if my understanding is correct, you said that in the next 5 to 6 years, what you had mentioned in your presentations earlier will be achievable even without the inorganic growth. So you are quite confident of growing organically itself to reach those numbers because you've been in the INR 400 crore top line range since quite a few years in that sense, like we've not been able to scale up to, say, INR 500 crores or INR 600 crores annual top line.

[Foreign Language] And also going forward, our kind of expansion, for example, Delhi is blank. I'm just giving you the potential. Yes, it's the speed at which we actually churn out. Chandigarh, we had to withdraw out during pandemic. So there is so much of potential which we see. And actually, we were there earlier on. We have to shut those because of pandemic primarily. So I see no reason that we will not be able to run faster. And as I said, the good news is that we're getting a very competent CEO, who will be able to guide the company better and qualitatively. So you'll see that, obviously, he has his own objectives. So I'm confident of the fact that we will be able to completely churn more number of stores, profitable stores and much faster. I can't say that we will be 100% doubling. We may be falling short by 10%, 15%, but I'm confident that we will be doing that, not for the heck of it, not to prove it to the investors, but to ensure that the company has robust bottom line and is going in the right direction.

Sir, just to clarify, you mentioned that the new CEO would be coming in by the end of this calendar year or financial year?

Maximum by the financial year. We are looking at this calendar year, but max would be within March, that is the fiscal year.

[Operator Instructions] The next question is from the line of Kaushik Poddar from KB Capital.

See, you are planning to double or triple your turnover in 5 or 6 years -- yes, you are planning to double or triple your turnover, I mean I did not get it, in the next 6 years or something...

See, we have planned to have inorganic acquisitions, which were in the pipeline. So in the absence of that, I can't say that it will be 100% double. But we can confidently tell you that the number of stores that we are opening and the kind of volumes which will come in from there, we're already adding 6 to 8 in the list by the time March ends, March or April, max March, April, and 6 for sure. So they're all under fit-outs. And they eventually bring almost INR 48 crores to INR 52 crores on our top line. Furthermore, we are continuing to do it. We're talking about a horizon of 5 years. So in that case, if we don't do inorganic, with inorganic, we have said that we will be able to double our turnover effortlessly because if we get a top line of INR 200 crores, which is actually an inorganic acquisition, we automatically go towards that. But this time, we don't have too many of them which are profitable and good enough, except the one, which is the international one, which may come in 1 year, 1.5 years now. They've deferred their plans, oriental brand. But I mean, if everything goes well, in 5 years' time, you will see if we open 8 to 9 restaurants on an average every year. For example, I just said that we are primarily in Calcutta, Bombay, Bangalore, primarily. So we have the whole of Delhi, the North region, including Punjab, which is vacant. With a brand like Mainland China, which used to be the pandemic actually forced us to shut. There's no reason we can't walk through that. The biggest advantage is that the brand is relevant. The brand is giving us better SSG wherever we are renovating. So we're very bullish about the fact that we will be able to, by and large, reach there. I can't just make a statement that without an inorganic, we'll be able to reach 100%, but we should be in and around that.

So you're basically looking at around 12% to 14% growth every year, right? Turnover?

Yes.

Okay. And do we see an expansion in margin?

Yes, because what happens is that as we are talking about that we've been trying to -- if you see the year before last fiscal, we've been maintaining around sometimes 16%, 18% of EBITDA, which was very good because, of course, we had a tailwind. So as the efficiency is better, corporate costs go down, we ensure that we have more capability in the business of Oriental because that's the main growth engine where the food cost is controlled. We have the expertise, things become easier. The chefs get divided. So I'm sure of the fact that the margins will improve.

And the fact that you are trying to do a fine dining along with also the fast food QSR, I mean, doesn't it become a little difficult? How do you manage it because they require different kind of skills?

Yes. So I mean, we are not doing any QSR. The only brand...

Burger thing, is like a QSR?

No, it is not a QSR. It's absolutely a dark kitchen. So the brand has been given birth, as Avik said. We have actually got our capacity utilized, unutilized in the kitchens of, say, for example, Episode, Bohoba and another Episode, which is in Thane and in Bandra. So what we have done -- what he has intelligently done is that because you may be knowing that there are gourmet burgers, which have become a trend now. And there are 2 of them which are doing exceptionally well. So -- with that in mind, rather than doing a burger, he's done sliders, which is slightly more shareable, intelligently happened because a burger becomes difficult. So differentiate or die. So I think that if you take any reviews of the burger, which we have test marketed and proof of concept, which is settling down or settle down now, we will see that this is expandable. There's no capital expenditure. There is no manpower extra cost. We may have a commissary when we become very large. So this is not a QSR in the sense that you are physically having a QSR. It is just that you're making your own buns, which you are capable of and also the patties with yourselves. And going forward, we may become a gourmet, not -- I'm not even talking, I may not have the audacity to use McDonald's, but there could be a niche where we can carve as some other burgers, which are Louis Burger or another burger, which Avik would know better, have already shown a turnover of -- respectable turnover with good returns. So that is the idea. It's not a physical QSR.

The next question is from the line of Rohan from Turtle Capital.

Most of my questions have been answered. I just wanted a clarity on like what kind of EBITDA margins do you target on different kinds of restaurants? Because you are -- like year-on-year basis, there has been a bit volatility in margins. But quarter-on-quarter, in last 5, 6 quarters, we are doing somewhere in the range of 15% to 22% or 21%. So I just wanted to get an idea on what kind of margins we can see going forward? And what kind of margins your restaurants, different branded restaurants command?

Rajesh Mohta, this side, sir. Since the published numbers are there and you have already analyzed the percentages of EBITDA, so the EBITDA basis the India AS accounting, we are doing, let's say, for instance, in the current quarter, we have done an EBITDA, which has grown by 13.34%. So at this rate, the moment we start opening restaurants like Mr. Anjan has explained for the breakeven, et cetera, we would target to be plus 20%, 22%, but in the range of 20% to 24% of EBITDA, sir.

Okay. So can we expect this in FY '25?

Which is with respect to the margins which are better than the brands like it is the Oriental, which has better EBITDA. That is the reason why the company is focused towards Oriental brands.

Okay. And how much time will it take you like have EBITDA margins in the range of 20% to 22%, like can we expect in FY '26? From '26 onwards?

Yes, we work towards it. We are working hard towards it before that should be the -- that is the internal target for sure, and we would be able to do that.

The next question is from the line of Viraj Mahadevia from MoneyGrow Asset Private Limited.

As I look at your P&L for the first quarter, I can see that the employee benefits expense has moved up from last year same time, as well as the lease rents have moved up both from Q4 FY '24 and Q1 FY '24. Can we take these -- because both these costs are incurred ahead of opening of new sites. Can we take these as the costs for the next couple of quarters? So as your revenue throughput comes through, you would start to see meaning operating leverage?

I appreciate your question. Like if I may, you have rightly hit the nail on the head, like these are front-end costs for the restaurants which get opened. And when this kind of a percentage to revenue, we work hard towards improving that. That's the real reason where the operating leverage would get triggered.

Fantastic. And with your existing stores, do you expect to increase the quarterly run rate by about 10% to 12% per quarter from here on revenues?

If I may add on, sir, it's a difficult proposition to get into a double-digit number because the mature stores with the kind of covers which we do between the lunch and the dinner and especially during weekends are very standardized now. Once the plateau has been achieved, it is the pricing which has a role to play rather than on cover. So there would be a margins, which would be in single-digit change.

Understood. So that comes to my next last question. The revenue growth you have seen of about 10-odd percent, how much of that has come from volume versus pricing? And if you have not pulled pricing as a lever, when are you likely to pull pricing as a lever for growth?

So this is a very tactical move as far as pricing is concerned because, let's say, for instance, like yourself referred to rental, there is an agreement like where we have 5% increase every year or 15% increase every year, inflationary pressure on raw materials, which we try to neutralize, but we are forced at times to increase tactically the prices across restaurants, which we do it during particular season, particular year. So there is one amount of element which is from the price increase and cover increase, like Mr. Avik mentioned about the renovated restaurants where there is a growth potential, post the renovation, we have seen a surge in the covers and as well as movement of higher liquor revenues to the total revenues.

I understand that, sir. But out of your 10% growth in revenue, again, how much has come from price versus volume?

Sorry, it would be difficult for me to say exactly as far as the differential between the 2. But yes, primarily with volumes, more to do with volumes rather than on the price. But exact number would be -- I don't have to share -- don't have to -- at this point of time to share.

So the pricing lever is yet to play out, hopefully. At some stage, you will take price increase...

I'll take that up. I understand where you're coming from because if you go to any one of our restaurants, even in BKC, we continue to sell our -- which has been an invitation price of around INR 625 for a buffet, which is a full fledged, which Barbeque Nation too can't give it. Now the idea was to enter BKC is a very dangerous place because of the fact that we are in a recessed area because we didn't want to pay that kind of a rental of around INR 600 per square feet. We are slightly on the back area. I don't know if anybody has seen it. We are the area where you have the visa counter, the main visa counter where everybody goes, [ BFS. ] So hence, we have to give an offer. And as we came up with that offer, now things are settling down, you will see all these introductory prices getting balanced. So in the second quarter, we will have to go up by nothing less than not just an inflationary pressure. The price play and the lever has not been pressed as yet because people do understand that good fixed costs and quality costs money, and they are ready to pay for it.

The next question is from the line of Amit Upadhyay, which is an individual investor.

Most of my questions are answered while those were asked by my colleagues in the call. But I have 2 questions. One is in your presentation, under the brand, I can see all the brands, but the Episode One, which we consider as a core brand, by when should we expect that brand to have their revenues mentioned separately?

If I may, since we have only one Episode One which is currently on in Mumbai and as Mr. Anjan in his opening remarks mentioned about opening of an episode in Viviana Mall, Thane, in current month itself and with other 2 under work in progress. So once we have at least 3, 4 restaurants where the throughput is very high, we would start showing separately, sir.

The next question is from the line of from [ Zach Nazar ] which is an individual investor.

Sir, congratulations on, I would say, a healthy set of numbers considering whatever happened in the quarter. Sir, as I understand, our business has fine dining, but would we also be focusing on the delivery aspect of it? Let's not call it QSR, but also the delivery aspect of it because that is turning out to be a big market. And also the -- your Sweet Bengal. So would you just throw a light or your thoughts on these 3 segments, sir?

Sure, sir. Thank you for the question. So basically, we are definitely focusing very, very strongly on the delivery component of the business. And this -- how we do this is basically, we have 4 different kind of Asian brands that get delivered out of each Asian kitchen. We also see that our manpower has been trained to deliver all 4 brands, so that does not add any extra costs. Apart from this, we have also found out hub-and-spoke assembly model like the Walters Burger, which would also be added to this kitchen. Hence, our delivery model has worked out fantastically for us because we call ourselves a hybrid restaurant that also delivers from the back with the same rental, same equipment, same manpower as well as we focus on serving the dine-in with the renovated stores. Hence, for us, keeping delivery in mind as well as dine-in, this is going to be a major growth element for us coming into the future.

And what would be the percentage of delivery out of, let's say, what you did INR 100 crores odd this quarter, Mr. Avik?

This would be 26% of delivery revenue.

26%. And sir, right now, if you see the country is seeing a huge surge in the advent of sweet retailers, if I might call it, you have a wonderful brand. You have some fantastic desserts. What are your thoughts on growing that beyond Mumbai and the surrounding regions?

So we are under works to set up our presence in other parts of India. But alongside that, we have also looked at FMCG partners who would be making and manufacturing sweets for our brand. And these are sweets with larger shelf lives. So by the end of this fiscal year, we should have the products ready available at different stores, online retailers and so on.

That will be fantastic, sir. Looking forward to that. And a bookkeeping question for Rajesh Ji. Sir, we have forfeited some warrants. So this amount, INR 25 crores would be treated as income in the current quarter, right? And our final equity capital would be INR 48 crores and odd. Would that be correct, sir? And what is the cash on books we have after this activity, sir?

Sir, I would answer your question in 3 parts. One, first, this forfeited amount is not to be treated as an income, sir, it goes part of the net worth, one. And secondly, the share capital, which you just now mentioned is absolutely correct, sir. This is because post allotment, it is going to be INR 48.23 crores.

That is the final Rajesh Ji?

Post allotment of the conversion of the warrants.

Everything. That's fully diluted.

That's right. INR 48.23 crores would be the capital.

Sir. And what would our net cash on books be, sir?

Sir, as of 30th June, we have INR 163.84 crores.

Okay, sir. Best wishes to the entire team Speciality, sir, and looking forward to a wonderful year from you. And I would say, Mr. Avik, please focus on Hyderabad a bit because it's a big market and you only have, I think, one restaurant here.

Absolutely, sir. We are in process to get 2 new properties in Hyderabad.

The next question is from the line of Parth Dalal, which is an individual investor.

Just a couple of questions. In the last quarter, I think we said that the breakeven is usually 6 to 8 months. What I hear in the opening remarks today, I think sir said 9 to 12 months.

Right. So these are actually location-based. Depending when we grab a newer market, which is a little nascent, it takes a little more time. For example, we came up in the new Phoenix Mall in Pune, [ Bakar. ] That mall is brand new. It's still taking time to have some footfalls like the kind of more potential malls in Bombay where vicinities, crowds, residents, corporates are already in place. Hence, yes, in newer entry markets or nascent markets, it takes 12 months approximately on the higher side. But in already high footfall markets, it's 6 to 8 months.

Okay. And one more thing. So in the press release, which we had, I think, yesterday, somewhere it was written 3 to 4 stores in upcoming quarters, right? That's again -- I think in the opening remarks, it was said 6 to 8 or something. So basically, in short, can you summarize how are we looking at in this year till March '25?

Yes, I'll take that. So sorry, this was 3 to 4 quarter. So we were talking about fiscal. I think there's a misunderstanding. So '25 end, we are looking at bare minimum 7 to 9 depending on Borivali Mall, which can supply us because that's been delayed our corporate -- and another mall, which is in Bangalore. So it all depends on the real estate coming up. We are fully ready with everything. We are carrying the staff on, getting to train them up. So we are looking at that kind of thing. So maybe there will be a miss of 1, 1.5. But by and large, that's the kind of thing to look at.

Sure, sure. Got it, sir. Not an exact number, just a range and...

Yes, yes.

I got there is change in the guidance since yesterday. So I was just trying to confirm -- After the 7 to 9, any plans? I mean, how many will be like Mainland, how many Asia, how many episode? Is there any plan? Or it will happen as we go ahead?

No, no, no. We have Asian, I can say that. What is happening is that we are now -- everything is Asia Kitchen. For example, in the city of Calcutta, I'll give you an example, we have 3 Mainland China and one Asia Kitchen. So what we have done there is that we've got one Haka, which is the similar kind of food, which is pure Chinese, the Haka type of food, but it's not priced as an aspirational level of Mainland China because it's not fine, fine dining, it's more bestroish. So that we renovated and we did. So the number of restaurants which are coming in the -- in Calcutta city is that. So Avik has come out with a slightly same food in a different format called [ Bizzar Asia ], which is basically a street of Bangkok slice, he can tell you better. And it's going to be a fixed meal at, say, INR 1000 or INR 1,100 where you get like a street moving around and you move around and pick up the food. This is the same Asian form, but we can't load another Mainland China there. So we've done an Asian one, which is same thing, same staff. Maybe we'll have a little more Asian touch to the whole thing. So it's called [ Bizzar Asia. ] It's slightly more disruptive young age. Similarly, we are also doing another Gong. Gong is already in Pune. There's another Gong being done in Pune in 12 kilometers distance so that there is no question of cannibalization. So number of stores, Asian would be maximum, if I may just answer your question and sum it up, 70%, 75% and the rest will be in the form of Episode, which one is just starting in 15 days or 10 days. And the second one, Bandra is being done. And we're also looking at a terrace property, which is co-owned by us in Calcutta, which will become [ terrazzo ] by Episode, which is also under fit-out.

Sure, sir. Got it. It's a mix of all our top brands. And again, coming back to the Walters Burger, sir, I think Avik said that we will have a store already, I mean, 1,000 square foot or something. And then you said that it's not going to be a QSR outlet or -- so can you clarify what exactly our plan?

I will come. See, [ beta, ] I'm taking it up because in Borivali Mall -- sorry, Borivali Oberoi Mall, which is going to be one of the prime captive malls because like the Oberoi Mall here in Goregaon, we had a problem with taking space fall, we were losing a lot of space because there was an outdoor which they were giving, and we were not very happy with that. So it is at a very, very -- at a song, Vicky being a friend and he's known me for a long time. Vikas gave me that outside space, and he insisted that we need to have a kind of a thing because he's a big fan of Walters. So he loves Walters from the time it has come. We sent him a samples, and he's been getting it from the delivery orders of aggregators. So what has happened now is that -- so that extension area now is being -- we have Café Mezzuna. We are used to this kind of a food and format. So in many malls, like Mall of Emirates where we are, there's an outdoor and indoor. So because we have a space, because we have an area, we are utilizing it as Walters because beyond a particular point that you are a cloud brand, which is an experimental thing, you will see that some kind of a brick-and-mortar. This is not totally brick-and-mortar because it's absolutely an alfresco. When you have the display, that becomes an advertisement for you. In this case, we got it at a song. So hence, there is one display of that kind of visibility because Bombay is a prime focus at this point of time, and Borivali is going to have a huge footfall. Similarly, in Calcutta with a brand which we have called Dario, there may be a conversion of that to make a physical store wherein a Dario delivery will continue, but we will have Walters written on the main road, like the airports where people use it more for signage, visibility than use anything else. Now these are not necessarily going to be a brick-and-mortar model at all. Avik, do I say the right thing?

That's correct. It's more delivery focused, but this is just for branding purpose that we'd be placing ourselves...

Yes. We'll do 1 in a city or 1.5 to just display and say that, yes, we are there. Wherever we get a real estate, which is cheap and cheerful wherever we have the facility where we can support it because we have the whole of Mainland China, Asia kitchen area, which is there. The same kitchen will make it and then the promissory will supply the buns and they will put it together. Of course, tea coffee, et cetera, you have a margin.

Just to reconfirm, basically, this is an Asia kitchen unit. at the Borivali Mall. It's just because we have a small outdoor space, we're just going to be branding Walters there. And just to sweat our assets, utilize the same staff, same kitchen, same rental, we'll be delivering Walters as well from the same kitchen.

Okay. Got it. No, I think you said pan-India, it would be -- and I was just wondering how would be possible with something like episode and delivering Walters Burger out from that store.

Just to clarify that. One, usually, bars don't have a very strong delivery compared to restaurants or dine-in restaurants. Hence, to sweat the assets of the Episode One kitchens, we use Walters Burger as a delivery format that could be brought out extra revenue from the same unit.

Okay. Okay. Interesting. And just a suggestion, I think one of the previous participants said Hyderabad, I think as per our latest presentation, only 2 stores. So I mean, a city like Hyderabad definitely can absorb a lot of our brands, more -- even the Episode One. So please consider that.

Absolutely. We are actually on track to do that and soon we'll share the good news.

The next question is from the line of [ Saumil Gujarati ] from -- which is an individual investor.

I have invested in Speciality Restaurants since 2013, sir. And sir, why are not opening a store in Surat, sir, Gujarat?

Sorry, we couldn't hear you well. There was some kind of a disturbance. Could you please repeat your question?

Sir, why are we not entering a Gujarat market, Surat, which is a very developing city sir?

Gujarat, yes. So Gujarat is on the plan in the next 3 years expansion. So we should...

Sir, in particular Surat, sir, Surat.

Yes, absolutely. So it is in our map for the next 3 years. Within the next 3 years, we should have 2 stores running absolutely for sure.

The last question is from the line of Viraj Mahadevia from MoneyGrow Asset Private Limited.

Yes. Sorry, my question has already been answered.

As there are no further questions, I would now like to hand the conference over to the management for closing comments.

Dear investors, we are extremely thankful for your time and participation on call and getting update on the company. And we are very thankful to the best wishes, which have been conveyed by all the investors for going forward in the financial year. We look forward to meeting your aspirations. Thank you on behalf of Speciality Restaurants. We once again thank you for your time. Thank you.

Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.