Speciality Rest. (SPECIALITY)
Slow GrowerFairStock Score: 40/100 — MIXED
Score breakdown: P/E: 1/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹139.67 |
| Market Cap | ₹673.71 Cr |
| P/E Ratio | 30.83 |
| ROCE | 7.97% |
| ROE | 6.87% |
| Dividend Yield | 1.11% |
| Profit Growth | 21.23% |
| Debt/Equity | 0.42 |
| Sales Growth | 15.69% |
| Promoter Holding | 50.31% |
| 52-Week Range | ₹82.7 — ₹167.46 |
| Sector | Leisure Services |
| Book Value | ₹72.01 |
Strengths
- Promoter holding of 50.31% aligns interests with minority shareholders.
- Balance sheet is reasonably conservative with debt/equity of 0.42 and a Piotroski F-Score of 7.
- Profit growth of 20.75% is outpacing sales growth, indicating improved operating leverage or margins.
- Price is about 40% below its 52-week high, and P/B of 1.51 is not extreme for an operating franchise.
Concerns
- ROE of 6.87% and ROCE of 7.97% are weak for a branded restaurant business, suggesting limited value creation.
- P/E of 20.31 and PEG of 1.42 look expensive given only 7.80% sales growth.
- Latest quarter net margin is roughly 7%, leaving little cushion against inflation, rents, and competition.
- Profit growth may be cost-driven rather than demand-driven, making it less sustainable.
AI Analysis
At ₹101, Speciality Restaurants is a business I would want to study with open eyes. The economics, frankly, do not scream wonderful. The company earns an ROE of only 6.87% and ROCE of 7.97%. In an inflationary Indian restaurant market, that barely covers the cost of capital. A P/E of 20.31 and a PEG of 1.42 mean I am paying a full price for profit growth that is aided by cost controls or base effects, not necessarily durable compounding. Sales growth is just 7.80%, so the 20.75% profit growth must come from operational leverage or one-time gains. Let me not ignore the positives: debt/equity is 0.42, manageable; the Piotroski F-score of 7 suggests sound operational health; promoter holding of 50.31% is reassuring; and at ₹101, the stock sits far below its 52-week high of ₹167.46, offering a less optimistic entry than before. But cheapness is not the same as value. Book value is ₹67.03, so the market is paying 1.51 times book for a 6.87% ROE. That is not a Graham bargain. The latest quarter shows ₹129 Cr sales and ₹9 Cr net profit, roughly a 7% net margin. This is a capital-intensive, high-fixed-cost industry with intense competition. I would want same-store sales growth and return ratios to improve materially before calling this a wonderful business. Until then, this is a slow grower, deserving of watchfulness, not enthusiasm.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer