Speciality Restaurants IPO
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Emerging companies - Mid caps that can become large cap
Forum Discription: These are companies operating in growing markets having have certain niches or specific attributes like new sector plays. These are emerging multibaggers with high risks and high rewards.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=3575
Printed Date: 07/May/2025 at 4:35pm
Topic: Speciality Restaurants IPO
Posted By: TCSer
Subject: Speciality Restaurants IPO
Date Posted: 10/May/2012 at 11:56am
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Can this IPO be on lines of Jubilant Foodworks ? The brands of Mainland China and Oh Calcutta are very strong.But How successful is the track record of Bengali Entrepreneurs? Launched in 1992, Speciality Restaurants Ltd is a fine dining operator in India with 62 restaurants and 11 confectionaries as of December 31, 2010. They focus on providing their guests an affordable fine dining experience with quality food and service in a modern ambience. Speciality Restaurants has established several famous brands across the nation, including Mainland China, Oh! Calcutta, Sigree, Haka, Machaan, Mostly Kababs, Just Biryani and Sweet Bengal. It runs 62 Food & Beverage outlets in various important cities. Mainland China alone serves more than 2 lakhs Chinese meals per month, which is a record of sorts in the country. Their restaurants consist of different restaurant concepts and are located across India, with the majority concentrated in the western region. The four factors of contribute to the quality of the food that they offer quality fresh ingredients, modern food preparation and storage equipment, standardised recipes prepared by trained chefs and effective quality monitoring. Company Promoters: Anjan Chatterjee and Suchhanda Chatterjee are the Promoters of the company.Objects of the Issue: The object of the issue are to:1. Development of new corporate restaurants; Issue Detail: »» Issue Open: May 16, 2012 - May 18, 2012
Views Invited ------------- Share market is nothing but a game of temperament. Success mantra Right Price,Right Business,Patience, Conviction .Do not do panic buying or selling.It may be the only profession where inactivity pays |
Replies:
Posted By: rajnsharma
Date Posted: 11/May/2012 at 12:57pm
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It all depends upon how it is priced. I remember one line from Peter Lynch IPO: "It's probably overpriced" This line I always recall when I have to apply for an IPO. ------------- Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett |
Posted By: mohitrathi8
Date Posted: 11/May/2012 at 1:05pm
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^ +1
But these concept ones, generally do well, atleast on IPO day. Eg. SKS ------------- Good stocks can go down for no reason. Bad stocks can go up for no reason. |
Posted By: rajnsharma
Date Posted: 11/May/2012 at 2:00pm
In my opinion it's not worth taking the pain for a small gain. A few thousand earned doesn't change life at all. It can just give you a kick that's all. ------------- Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett |
Posted By: subash1983
Date Posted: 11/May/2012 at 3:04pm
Gone are the days when Indian investors making quick bucks by investing in IPO. Statistics show that these days majority (>50-60%) of newly IPOed stocks are quoting at a loss compared to IPO price. So the logical conclusion is that, even if one find some IPO lucrative, one should wait for decline in its price and then do investing. |
Posted By: TCSer
Date Posted: 11/May/2012 at 3:22pm
Jubilant food came at 145 in Feb 10 n see its price now.This IPO is also in similar sector. ------------- Share market is nothing but a game of temperament. Success mantra Right Price,Right Business,Patience, Conviction .Do not do panic buying or selling.It may be the only profession where inactivity pays |
Posted By: xpresso
Date Posted: 11/May/2012 at 3:34pm
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But the busness model is different. All sit-down restaurants have a real estate element which eats into a large chunk of profits.
The best thing about Jubilant is that they can manage with a small component of real estate thanks to the delivery based model.
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Posted By: nikhilg
Date Posted: 11/May/2012 at 3:50pm
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Posted By: TCSer
Date Posted: 11/May/2012 at 3:59pm
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Valid point.Hv u gone thru the financials of DRHP? ------------- Share market is nothing but a game of temperament. Success mantra Right Price,Right Business,Patience, Conviction .Do not do panic buying or selling.It may be the only profession where inactivity pays |
Posted By: NikhilM
Date Posted: 11/May/2012 at 5:02pm
| The asset-heavy nature of the business model is confirmed by the RoC numbers. |
Posted By: subu76
Date Posted: 12/May/2012 at 10:27pm
| If this article http://barandbench.com/brief/8/1354/amarchand-talwar-thakore-and-white-amp-case-on-speciality-restaurant-ipo - Link is anything to go by the company would expect a high valuation. |
Posted By: subu76
Date Posted: 12/May/2012 at 10:38pm
| Do you guys have a sense of where all the capex has gone in? As per the Crisil report they occupy rented properties. So all this money is needed to set up the kitchen, interiors etc? |
Posted By: nazgul
Date Posted: 12/May/2012 at 1:41am
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My only question is.... why are they comming to an IPO? Why are they option for it? So far from what i have read everywhere the business is good, and amongst patrons Mainland Chine hotels have a solid name. Why doesnt the promoter group milk it and open new hotels? Whats the big need for an IPO here? "From the IPO proceeds, company plans to utilize Rs.144.68 Cr to open 48 corporate restaurants during fiscal year 2012 and 2013 in Metro, Teir I and Teir II cities. From the proceeds, it will use Rs.15.1 Cr to develop a food plaza in Rajarhat, Kolkata. Company will use Rs.10.43 Cr to part-repayment of outstanding term loan of Rs.12.93 Cr from SBI." This is what i could read from internet about their aim for IPO. For a company making 160 million in PAT (as per figers in one of the tables in this forum) this debt amount should not be a problem. Part payments should not kill them. Capex expansion plans from IPO is also not a very good idea in my thinking. If they think like that (need money then go for IPO) then they will very easily dilute equity tomorrow and pledge more for further capex. Whats the deal here? For Jubliant they had to provide an exit for their existing big investors i think. That was the trigger for the IPO. ------------- I don't do funds, i do fundas. |
Posted By: subu76
Date Posted: 12/May/2012 at 3:14am
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Saif advisors will dilute their stake..but that is only 4% dilution. Rest of the public holding post IPO will come from stake dilution by promoters. Do you know what is the meaning of corporate restaurants?
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Posted By: subu76
Date Posted: 12/May/2012 at 9:34am
IMHO....As long as they can earn a suitable returns on IPO money or from stake dilution none of that is a problem. They key is the return earned.
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Posted By: nazgul
Date Posted: 13/May/2012 at 1:11pm
The return earned is not the only key. It is one of the prerequisits. For an investor its not just that the business should keep on earning steadily but the management should also be good enough to share those earning with investors in form of dividends and bonuses and then later on buy backs. If there is no viable and valid motive for IPO then i cant say i fully trust the management. They may demonstrate heard mentality, who knows. To me this means that they didnt disclsoe enough to explain to me why they want to go for an IPO. It may not be intentional but it does create doubts. Corporate restaurants is a notion now a days in Gurgaon (where is live presently) about those big buffets (have visited Mainland china twice) at affordable rates. The idea is to provide a full three course meal of starters, main course and then desserts in a full buffet way. Its the same course of means for everyone with each meal having about 2-3 varieties both in veg and non-veg and also in sea food. Add to that the tranquil enviroment and privacy a bit and peaceful airconditioned space not those big blaring music restaurants it is a good place to go for a lunch once a while. I have been there both times for lunches only. Since the lcoation of these restaurants in in middle of corporate parks and business hubs, most of the people, about 90%, who come are in suits and ties. ------------- I don't do funds, i do fundas. |
Posted By: seven
Date Posted: 13/May/2012 at 2:18pm
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Have visited Mainland in chennai, expensive food, 60% promoter holding after listing, ...a family business , and also someone rightly said ..cant be compared to JFW business model at all. I am waiting for Devyani international(kfc , pizza hut) and Mc donalds , listing maybe next year acc to sources. ------------- To accomplish great things we must not only act but also dream, not only plan but also believe. |
Posted By: rajnsharma
Date Posted: 13/May/2012 at 2:38pm
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Anybody has any idea about promoters' credibility and integrity? Without that whole discussion on this IPO will be incomplete. ------------- Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett |
Posted By: nazgul
Date Posted: 13/May/2012 at 2:56pm
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thats what i have been asking all along.
------------- I don't do funds, i do fundas. |
Posted By: Ravenrage
Date Posted: 13/May/2012 at 3:31pm
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Mainland China is great ! Oh! Calcutta , I haven't visited , there is one at Elgin Road i guess . Not sure . ------------- Risk does not reside in price changes, but in miscalculations of intrinsic value . |
Posted By: paragdesai
Date Posted: 13/May/2012 at 4:36pm
Don't know about for sure but he is really passionate about cooking & his business for sure. ------------- Luck is what happens when preparation meets opportunity .... |
Posted By: shivkumar
Date Posted: 13/May/2012 at 5:28pm
| Mainland China outlets are quite popular in Mumbai and O Calcutta is known for its Bengali food. Interesting to see how this pans out. |
Posted By: subu76
Date Posted: 13/May/2012 at 6:28pm
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I have visited 3 to 5 types of hotels in various metros and like them a lot esp their chinese, kabab and bengali food. Service is invariably good and food quality is standardized. While IPO is one thing i have no doubt the business will do well. These places are invariably crowded. |
Posted By: subu76
Date Posted: 13/May/2012 at 6:33pm
got it...thanks....yup i like their buffet too. |
Posted By: subu76
Date Posted: 13/May/2012 at 11:56pm
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An interview http://www.telegraphindia.com/1090501/jsp/entertainment/story_10899849.jsp - http://www.telegraphindia.com/1090501/jsp/entertainment/story_10899849.jsp
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Posted By: TCSer
Date Posted: 14/May/2012 at 12:48pm
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So friends price band is out.how is the iPo appearing fundamentally n longterm basis?since mot of prop r on lease basis this becomes an asset light model.pl urgently advice as I am outside India n depend on ted only for final decision ------------- Share market is nothing but a game of temperament. Success mantra Right Price,Right Business,Patience, Conviction .Do not do panic buying or selling.It may be the only profession where inactivity pays |
Posted By: subu76
Date Posted: 14/May/2012 at 4:05pm
| At Rs 155 they are looking for roughly 180 cr to sell 25% of the company => roughly the expectation is for a 720 cr market cap. With annualized profit of 20 cr that means the valuation ask is for roughly 36 times earnings. |
Posted By: nazgul
Date Posted: 14/May/2012 at 5:11pm
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I think i will give it a pass for IPO and buy it in open market once it lists and cools off a bit. I dont think there would be a high premium on listing and by the time it lists the markets would possibly be in a bit more unsteady or uncertain region. On IPO front it appears to be a bit pricy. 110-120 seemed to be ok to me. So if post IPO it comes close to 100 - 110 levels then its a buy for me ...slowly. ------------- I don't do funds, i do fundas. |
Posted By: S.Varghese
Date Posted: 14/May/2012 at 5:47pm
If this is valuation, then the same amount of money can be put in Hawkins, which is at a market cap of about 800 cr.
I do not see a lot of listing gains in this company and probably investors will not make money for a long time. I think P/E of 36 should be given only to major brands and I do not see Sweet Bengal and Mainland china as great brands even though I like the food there.
But who knows market may have some different ideas. ------------- Fools rush in where angels fear to tread. |
Posted By: subu76
Date Posted: 14/May/2012 at 7:27pm
Well, this does not account for the fact that the 800 cr valuation is post IPO which means the company would have 150 cr of cash for deployment. The price is not easy for sure. However, it's worthwhile to remember that you're getting a company which can double the capital deployed. Unlike Hawkins they have a lot of space to growth. Execution and ability to reduce COGS will be the key. Irrespective of how the IPO does i doubt the long term investor will have reasons to be sorely dissapointed.
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Posted By: TCSer
Date Posted: 14/May/2012 at 1:15am
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Any news on grey market premium for this iPo as a godd gmp ensures listing gain n safety of applied capital. ------------- Share market is nothing but a game of temperament. Success mantra Right Price,Right Business,Patience, Conviction .Do not do panic buying or selling.It may be the only profession where inactivity pays |
Posted By: conservativeinv
Date Posted: 14/May/2012 at 8:51am
I thought at least part of this would be a re-sale, how much of the IPO money will end up with the company?
Also, why are you considering "annualized profit", why not actual-as-is profit?
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Posted By: subu76
Date Posted: 15/May/2012 at 1:04pm
I annualized cause we have only 9 months worth of profit as per the post by nikhilq on page 1.
On how much money will end up with the company:
Here is the post which clarifies:
Roughly 160 cr will be used for growth investment.
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Posted By: subu76
Date Posted: 15/May/2012 at 1:15pm
As per the numbers posted by nikhilq on page 1 COGS came down from 52.8% to 46.3% in the last 5 years while sales moved up 4 times.
SG&A remained constant.
If the extra money can be used to ramp up sales while COGS can be reduced further by say another 3-5% then that is money which can go to the bottom line.
While it's hard to say how things will be going forward they have managed to retain quality so far. A big part of that being strong quality controls and retaining the orginal set of people/chefs.
I answered the outlet question above. I feel Hyderabad itself can accomodate 2 more Mainland Chinas (it has 2 at this point) On my road itself we have 4 Chinese joints which are doing pretty ok but are definitely inferior to Mainland.
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Posted By: subu76
Date Posted: 15/May/2012 at 1:21pm
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About the newer plans:
Article from moneycontrol.com
http://www.moneycontrol.com/news/ipo-issues-open/will-investors-bite-speciality-restaurants-rs-182cr-ipo_704229.html - http://www.moneycontrol.com/news/ipo-issues-open/will-investors-bite-speciality-restaurants-rs-182cr-ipo_704229.html
It currently runs 69 restaurants and 13 confectionary stores across 22 cities in India. Mainland China, its biggest brand, accounts for 60.3% of its revenues, followed by Oh! Calcutta at 12.3%.
<Snip>
The plan is to scale Mainland China to 100 restaurants by 2016.
<Snip>Speciality Restaurants is also setting up food courts in Kolkata and Pune, which will house most of its brands under one roof.
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Posted By: subu76
Date Posted: 15/May/2012 at 1:25pm
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BTW....the moneycontrol article is somewhat funny:
"Sample" this (from the article)
Will investors bite Speciality Restaurants Rs 182cr IPO
But will it manage to tickle the tastebuds of investors?
The valuation isn't easy. It remains to be seen if the promoters were greedy and cause investor indigestion after tasting their offering.
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Posted By: conservativeinv
Date Posted: 15/May/2012 at 2:09pm
Why would you invest if you don't have a hang on the valuation?
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Posted By: subu76
Date Posted: 15/May/2012 at 2:18pm
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I think the valuation is on the stiff side and discounts a fair amount of future growth. However, i feel the growth will happen. That is a pure judgement call I guess which every one needs to make for themselves.
I plan to buy 50% initially and the remaining amount to average down as my gut is the stock will fall post listing. (though one can't be sure about these things)
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Posted By: rapidriser
Date Posted: 15/May/2012 at 3:09pm
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At 36 time earnings, why should I not buy Titan, Page or HDFC Bank - all proven and tested growth stocks with rock solid financials? I do not even think it is worth playing this one for listing gains, because the retail investor can at best hope for a few thousand rupee gains from his proportional allotment. It can be argued that people did not buy Jubilant Foodworks based on the same logic and lost a golden opportunity. But, I strongly feel that this one is not in the same class, because the restaurant model is not as easily scalable as the fast food model. ------------- When all else is lost, the future still remains. - Christian Nestell Bovée |
Posted By: rajnsharma
Date Posted: 15/May/2012 at 3:27pm
This is the big difference. Sit-in and delivery models are different with later being light in terms of capital investment. I also don't see any major benifit at this juncture except listing gains. I will again remember a thread on TED "Why not look for new ideas always" and stick to my old portfolio and add more of the same stocks. ------------- Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett |
Posted By: dr.sandip
Date Posted: 15/May/2012 at 2:12am
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Mr Tulsian's view on Speciality Restaurant IPO : http://https://www.sptulsian.com/article/66922 - https://www.sptulsian.com/article/66922 ------------- Anything is possible because Everything is possible... |
Posted By: gopal
Date Posted: 15/May/2012 at 10:10am
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[QUOTE=dr.sandip] Mr Tulsian's view on Speciality Restaurant IPO : https://www.sptulsian.com/article/66922%5b/QUOTE - https://www.sptulsian.com/article/66922[/QUOTE ]
Dr Sandip bhai your above link not working ... kindly give new link or post the gist of the matter rgds ------------- Women are like the stock market Coz they're irrational n can bankrupt u if u're not careful |
Posted By: datta.supratik
Date Posted: 15/May/2012 at 11:27am
| The same-store sale is at 8-12%...is that comforting? Ultimately it is will thrive on addition of new stores and hence could be a intensive working capital company. |
Posted By: dr.sandip
Date Posted: 16/May/2012 at 4:19pm
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S. P Tulsian's view on Speciality Restaurant as per his website :-
"Speciality Restaurants is entering the primary market on 16th May 2012, with a fresh issue of Rs. 1.17 crore equity shares of Rs. 10 each, in the price band of Rs. 146 to Rs. 155 per share, aggregating to Rs. 171 crore to Rs. 182 crore at the lower and upper end of the price band, respectively. Representing 25% of the post-issue share capital of the company, the issue will close on 18th May. Speciality Restaurants is a fine dining restaurant chain operating 82 restaurants(including 13 confectionaries) across 21 cities in India and 1 city in Bangladesh, under 10 different brands. Mainland China, with 37 outlets as of 29th February 2012, is the company’s flagship brand, which accounted for 60% of F11 revenues. Its other key brands include Oh! Calcutta, Flame & Grill, Sigree, Sweet Bengal sweets. Of the total 82, 49 restaurants and 13 Sweet Bengal confectionaries are company owned and operated, while 20 restaurants are franchisee owned and company operated. For 9 months ended 31st December 2011, company’s income from operations stood at Rs. 150 crore with net profit of Rs. 15.3 crore, resulting in net margin of 10.2% and EPS of Rs. 5.20, on equity of Rs. 35.22 crore. This indicates a 15% revenue growth and 31% net profit growth from FY11, when income was Rs. 173 crore, net profit was Rs. 15.6 crore and net margin was at 9.0%. As of 31st December 2011, company’s net worth stood at Rs. 113 crore, which will rise to Rs. 295 crore (at upper end of price band). The Chatterjee-couple currently hold 80.92% stake in the company, as promoters, which will reduce to 60.69%, post issue. PE investors Saif Partners (investor since Dec 2007) and Glix Securities (investor since Mar 2010) currently hold 14.2% and 4.9% stake, at an effective cost of Rs. 71 and Rs. 88 per share, respectively. Objects of the issue include development of 45 new restaurants by FY15, for an investment of Rs. 132 crore, development of a food plaza in Kolkata for Rs. 15 crore in FY13-FY14 and debt repayment of Rs. 9 crore. Currently, company has total debt of Rs. 32 crore and cash balance of Rs. 8 crore. Estimating Rs. 20 crore as net profit for FY12, at lower and upper end of the price band, shares are being issued to the public at a PE multiple of 25.2x and 26.7x respectively, which is quite stretched. Company has no listed peers as it cannot be benchmarked against Dominos-pizza maker Jubilant Foodworks, which operates on a much larger scale in an altogether different segment of the food services industry. Although the company has shown an impressive 4 year revenue CAGR of 25% and 4 year PAT CAGR of 46%, seeking market cap on listing of Rs. 728 crore (at Rs. 155 per share) is on the aggressive side, given current fragile market conditions. On 127 expected restaurants by FY15, company is demanding a valuation of Rs. 5.7 crore per restaurant today, which is definitely on the higher side. It waits to be seen if the company can deliver 35% annual growth from here on in FY13, to justify the premium valuations. Hence, listing gains must be ruled out by prospective investors. Only those with a one year time horizon can look to apply. While company’s historic growth rates, expected margin expansion, strong execution capabilities and diversified brand portfolio are impressive, they fail to justify the aggressive pricing for its primary market offering. We would be happier, had the pricing been about 20% lower. For now, only hoping that the book gets discovered at the lower band at Rs. 146!" I am still in dilemma to give it a BITE or not... Regards Sandip ------------- Anything is possible because Everything is possible... |
Posted By: subu76
Date Posted: 16/May/2012 at 5:27pm
BITE it or SPIT it you mean 
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Posted By: master
Date Posted: 16/May/2012 at 9:33pm
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When in doubt stay out. ------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: karn
Date Posted: 17/May/2012 at 1:40pm
Boy o Boy, is this is true than its mind boggling. Why so much capital is required one can achieve the same in less than half? While being in the industry of high turnover (restaurants keeps opening and closing every other day) above figures are not justified at all. I think the returns they will get is sub par for sure. ------------- “Invert, always invert.” |
Posted By: karn
Date Posted: 17/May/2012 at 1:50pm
On the second thought, Instead of making above mentioned investments, I would spend large portion of it in advertisement and brand building, opting for franchise led route. Why would you want to block most of money in real estate ( company owned restaurants)? If the franchise owners of similar brands are having 10% plus net profit margin (most of them are on rental), I dont know what they want to achieve by spending large sum on company owned stores.  ------------- “Invert, always invert.” |
Posted By: subu76
Date Posted: 17/May/2012 at 7:59pm
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Seems the IPO might be withdrawn given that the subscription level is only 2%.
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Posted By: subu76
Date Posted: 17/May/2012 at 9:27am
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Here is an analysis which cautions against the IPO. http://www.moneycontrol.com/news/ipo-issues-open/speciality-restaurants-ipo-pedigree-warrants-investment_705339.html - Link On existing shareholding: it is abysmally low at just 18 paise per share for the promoters not sure if it makes sense given that they are the founders
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Posted By: basant
Date Posted: 17/May/2012 at 9:36am
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Key question to ask is when did they pick it up? ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: arunshah2k
Date Posted: 18/May/2012 at 4:37pm
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One more thing to note is that restaurant stocks in US are also in big bull market similar to the Consumer stocks.
Check out Chipotle Mexican Grill. This also has a high PE as Jubilant Foodworks http://www.google.com/finance?q=NYSE%3ACMG - http://www.google.com/finance?q=NYSE%3ACMG No wonder Special Restaurants will sail through. It is currently 2 times oversubscribed.. |
Posted By: S.Varghese
Date Posted: 18/May/2012 at 4:58pm
Chipotle might be an exception. It is one of the finest mexican fast food restaurants in the world - I mean it the world. Their food is amazing and their marinated chicken and meat is the best I have eaten till now. For that they charge a premium - about 5 years back a decent lunch meal would cost $8-10 whereas the other restaurants it would be less than $7.
You cannot generalize Chipotle's success with any other restaurant stocks. Also Chipotle is not a fine dine restaurant - no ambience - They have a few tables and chairs and a good open kitchen which I think is an asset light model. ------------- Fools rush in where angels fear to tread. |
Posted By: S.Varghese
Date Posted: 18/May/2012 at 5:06pm
profit 20 crores, 70 resataurants so that is about 28L yearly profit for one restaurant. They need 132 crores for 45 restaurants - i.e. about 3 crores per restaurant. Assuming they make post tax 28L per restaurant for the new ones on an average - the returns are less than 10% of the invested capital per restaurant. I have not considered the 13 confectionaries assuming that their share in the profits will be miniscule.
Please correct me if this is the right way to work out the numbers. If the above numbers are correct then I dont see much upside. ------------- Fools rush in where angels fear to tread. |
Posted By: subu76
Date Posted: 18/May/2012 at 7:01pm
| The key point is to understand the business plan for the future. |
Posted By: nil_money
Date Posted: 18/May/2012 at 9:35pm
I agree ... Chipotle is class apart .. also rentals and property rates are low compared to India ------------- Thanks, Nilesh |
Posted By: breeze
Date Posted: 18/May/2012 at 9:49pm
Couldn't agree with you more. Chipotle is really asset light, very small, simple and yet good food. I like Piada better though.
------------- You just have to be opportunistic, and try to figure out what creates value.. where the bottom is, what creates incremental value, and in what combinations" John Malone |
Posted By: subu76
Date Posted: 18/May/2012 at 9:59am
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Basant Sir, Anjan Chatterjee and his wife started their first restaurant in 1992 in Mumbai and their first Chinese restaurant in 1995. I'm thinking it's not surprising that their capital investment has been relatively minor. Saif Partners had invested in 2008 valuing the company at 450 cr. So they have not seen much of an upside but that was in early 2008 and it's sort of expected any investment made then wouldn't have done too well by now.
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Posted By: srisaurabh2000
Date Posted: 18/May/2012 at 10:15am
The bigger question, me thinks is that how will they maintain the same standard everywhere. In case of QSRs probably this can be done but in fine dining can this be replicated and more importantly maintained or are you entirely dependant on how good the chefs are? Sayaji hotels for example which runs the Barbeque nation doesn't seem to have good numbers though probably there can't be direct comparison.
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Posted By: subu76
Date Posted: 18/May/2012 at 10:34am
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They have their own training center. In Hyderabad they opened 2 restaurants (Actually 4 if you consider collocated brands) within about 6 months and both seem to have pretty much Delhi/Bby/B'lore outlet kind of standard. |
Posted By: srisaurabh2000
Date Posted: 19/May/2012 at 2:49pm
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Does their training make a chef out of normal person? The bigger question would be once they do top 10-12 cities, how would they grow? They already would be established in the major cities even if they are doing well the growth that would be factored in. So what are trying to do at the next stage? |
Posted By: S.Varghese
Date Posted: 19/May/2012 at 3:23pm
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I don't know if there is such a market now for 600 rupee buffet and 1000 rupee dinners. Maybe 1% of Indians could afford it. I have been to Mainland China twice and it is an amazingly good restaurant, but quite expensive for my earnings. As for the tier-2 and tier-3 cities, I don't think there is such a demand for Mainland China type of restaurants because it is too classy for people from the small towns.
I agree people said the same things when Jubilant came out with their IPO, but every naysayer had to eat crow. It is another matter that whenever there is an offer of a one on one free pizza only then I buy from Dominoes. Maybe I am a very cheap idiot but then Dominoes is full when they have such schemes - lot of cheapskates in my locality.
Anyway let us wait and see how it pans out - my personal take is that fine dining restaurants are extremely difficult to scale up and too many of them in a location actually dilutes their brand. ------------- Fools rush in where angels fear to tread. |
Posted By: subu76
Date Posted: 19/May/2012 at 3:46pm
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Generally speaking, Taj folks have a somewhat better sense of customer service than most hotels. I always thought that service quality of Main lands folks (they have tried to copy a lot from Taj) and some of the newer hotel groups like BJN was really good. However, the other day i noticed that they go a cooler installed for their valet who had to stand in the sun under an umbrella. Made me feel good about them.
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Posted By: Avadhoot
Date Posted: 19/May/2012 at 8:35pm
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What makes this IPO different from Jubilant Food works-
(1) Domino's and Dunkin' are globally accepted brands while Mainland China & Oh! Calcutta are restricted to India only. other brands are through their inception stage. NB: in a city like Mumbai one Haka outlet was closed. (2)it offers fine dine and no home-delivery options. even a poor family can order a Domino and share bites among members while the same is not possible in case of fine dine restaurant. this shows the penetration of brand into masses. |
Posted By: Avadhoot
Date Posted: 19/May/2012 at 8:43pm
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another irksome thing was- valuation was almost at par with the Jubilant Foodworks' current valuation.
Jubilant with a PE multiple of 71 gives the PEG of .8 and SRL with a PEG of 36.5 gives the same as .79. ROE of SRL is 17.7% while the JBL has got 37.48%. Ps: post equity figure at the upper price band |
Posted By: subu76
Date Posted: 20/May/2012 at 8:39am
Hey, which city is this? Was the restaurant crowded or empty when you visited.
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Posted By: S.Varghese
Date Posted: 20/May/2012 at 9:09am
The second time was when we went for a project dinner on a weekday at Powai . About 10 people and the bill came to about 10K including drinks. We spent about 2.5 hours - we had booked a table and hence highly unlikely that there would have been another set of diners after we left. ------------- Fools rush in where angels fear to tread. |
Posted By: subu76
Date Posted: 20/May/2012 at 9:17am
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This is a pretty good observation. These kind of restaurants can have only 1 or max 2 guests/seat during a session esp during dinner. I've found that you need to go in early or late to get an assured seat without a lot of waiting unless a seat is booked in advance.
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Posted By: S.Varghese
Date Posted: 20/May/2012 at 9:48am
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You are right Subuji. Also there is no question about demand. But my question is with the high RE prices in India (about 12K in Vashi for commercial and 30K in Powai) do they make enough to give a high return on capital employed? Definitely they know their business better. ------------- Fools rush in where angels fear to tread. |
Posted By: subu76
Date Posted: 20/May/2012 at 10:00am
| Well, my understanding is that they have scope to optimize both COGS and SG&A as their size grows. We will have the answer in 2 years I guess |
Posted By: subu76
Date Posted: 23/May/2012 at 9:00am
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Just idle market gossip:
I think I'll probably get some allocation in the IPO given the low retail participation. Given the bad vibes around IPOs in general due to the FB fiasco, the low market confidence at this point and the high price ask I'd expect this IPO to do pretty badly. |
Posted By: Avadhoot
Date Posted: 24/May/2012 at 11:39am
Question was whether IPO has left something on the table? FB or SRL both issues were aggressively priced due to high profit CAGR at the threshold of safety (.8-.9 PEG). FB at least gave decent listing and it would be interesting to see how SRL fares up. |
Posted By: dr.sandip
Date Posted: 29/May/2012 at 1:28am
Subu sir, Whts the latest buzz abt SRL? How much of the allotment did u get? Its going to list tomorrow... Regards Sandip ------------- Anything is possible because Everything is possible... |
Posted By: subu76
Date Posted: 29/May/2012 at 11:36am
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I'm sure I got full allocation since retail segment remained unutilized. The stock is expected (by your's trully) to tank given the low interest, FB sentiment, high stock price to earning ratio and poor analyst reviews.
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Posted By: FutureBull
Date Posted: 29/May/2012 at 11:44am
They say it is big-bang opening but I could not trace it on stock exchange  ------------- ‘The market always does what it’s supposed to — BUT NEVER WHEN’. |
Posted By: S.Varghese
Date Posted: 29/May/2012 at 11:51am
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Not a big bang now, but about 3-4% about the IPO price of 155. Not bad in the midst of bad market conditions. ------------- Fools rush in where angels fear to tread. |
Posted By: harshil
Date Posted: 30/May/2012 at 2:51pm
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opened @ 152... now @ 160..
what next.... |
Posted By: Ajith
Date Posted: 30/May/2012 at 9:11am
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I do not understand why reviewers have been negative on Specialty Restaurants.All I know about it is the favorable review in BS.Looked good to me but did not buy at opening yesterday because Udayan's negative review in the morning made me hesitate. Have to study why so many are negative on the company.Someone who visited Mainland China, Ernakulam was appreciative of food,service and importantly the bill. ------------- Ajith |
Posted By: subu76
Date Posted: 30/May/2012 at 9:28am
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Very few folks have taken the trouble to understand the business and the focus has only been on the trailing PE. That said, it's safer to predict falling stock prices for any high PE stock at the moment. Ajith, what was the price out there? Did not know they have outlets in Kerela
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Posted By: Ajith
Date Posted: 30/May/2012 at 10:06am
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subu76, price of food?A decent meal for 4 would cost Rs. 1400-1600 I was told.Reasonable I feel. Kicking myself for listening to Udayan at CNBC.BS was positive on basic business and promoters.Visiblity of earnings,predictablity,cash flows all gr8 but PE will be stretched soon.160 at opening may have been safe though because high PE may be ongoing as for Starbucks over the years. Anyway worth studying,tracking.... ------------- Ajith |
Posted By: subu76
Date Posted: 30/May/2012 at 10:50am
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1400-1600 for 4 seems to be somewhat on the lower side. I'd have put it at about Rs 500/head.
Ajith Sir, do you know if they serve buffet there? |
Posted By: Ajith
Date Posted: 31/May/2012 at 11:53pm
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Hi subu76, 400-500 per head.Depending on whether you are trying to economize or not.My friend who went there was quite impressed. I never ever listen to Udayan because he is not an investor or a speculator.He should be just the conveyor of expert opinion as he is not a practical player nor has he,I am not sure,actually invested in the markets except his ESOPS.His words just made me ignore the Specialty Restaurants at the subconscious level so I missed those few minutes when it was available at 160.Maybe he knows something I do not ??Or more likely fooled as you say by the trailing PE. ------------- Ajith |
Posted By: Ajith
Date Posted: 31/May/2012 at 11:56pm
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subu76, No clear idea about the buffet.But its a Chinese restaurant,so unlikely to have buffet. ------------- Ajith |
Posted By: subu76
Date Posted: 31/May/2012 at 6:41am
While I'd buy at a comfortable pace I think the stock will probably come down. Udayan did get Reliance Power right.
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Posted By: subu76
Date Posted: 31/May/2012 at 6:42am
They do have buffets in some of their Chinese joints. Do post if you have any more insights.
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Posted By: paragdesai
Date Posted: 31/May/2012 at 8:26am
In Surat they serve Buffet on Saturday & Sunday at lunch time @Rs. 375. If you order from regular menu per head costing is anywhere between 400 to 600 per person. This outlet was packed in their initial days & there was waiting time on many days. But of late it is now normal restaurant. Also note that many in my city don't like pure and authentic Chinese test. They need some local test in Chinese too. That's the reason. In comparison to Mainland China their other outlet that is "Machan" is doing well here. ------------- Luck is what happens when preparation meets opportunity .... |
Posted By: subu76
Date Posted: 31/May/2012 at 8:43am
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That's interesting..If i remember correctly the buffet charge in most cities is Rs 500 (inclusive of taxes) Parag, is Rs 375 with our without taxes? Also, could you please comment on when it opened and how much time it took for the place to become somewhat less hot. (rough estimates)
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Posted By: paragdesai
Date Posted: 31/May/2012 at 9:14am
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That's include all the taxes. I think it open about one & half year ago. I think it take about six months or so. I remember when we went their first time without booking we reach there at around 7:30 pm when it was half packed and within next half hour it was full & there was waiting of one hour.
So from then onward we started prebook table whenever we gone there. But gradually what I saw is there is no need to book table since table are available on demand may be except on some holidays or festivals days. Other reason is in my city there are many Jains & Marwari community people who are reluctant to go to the restaurant where Non Veg is being served. So percentage of repeat customers are less here after initial euphoria. ------------- Luck is what happens when preparation meets opportunity .... |
Posted By: Ajith
Date Posted: 31/May/2012 at 11:06am
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subu76 On principle I too am avoiding purchase at such unjustifiable forward PE because in this depressed market where markets are overreacting to bad/apparently bad news there may be better bargains.Now is not the time to look at even Jockey and Dominos if you want to make serious money.What do you think?? ------------- Ajith |
Posted By: p_pandekar
Date Posted: 31/May/2012 at 11:24am
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Ajith, Reading your post after long time....What are the stocks on your watchlist now? |
Posted By: Ajith
Date Posted: 01/Jun/2012 at 2:55pm
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p_pandekar, I bought Cochin Minerals at 235-240.Out-of-the-world results last Quarter.This Quarter will be even better.Rutile prices have shot up.This quater will be better with rupee fall. Holding on to AVT Natural bought at 280.results were good.This quarter my guess is results will be better-fall in rupee... ------------- Ajith |
Posted By: subu76
Date Posted: 01/Jun/2012 at 3:18pm
Well I'm buying this one as I like the business and brand and feel they have option to increase profitability significantly...but planning to keep cash as an averaging option The rise post IPO seems speculative though and once the early birds leave I'd expect prices to fall |
Posted By: nazgul
Date Posted: 01/Jun/2012 at 3:58pm
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plzz keep some for me...am still waiting.
------------- I don't do funds, i do fundas. |
Posted By: zulfi
Date Posted: 01/Jun/2012 at 4:17pm
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sir, u r from kashmir right? i m planning to visit the valley...... ------------- U CAN WIN A HORSE RACE BUT U CANNOT WIN RACES |
Posted By: zulfi
Date Posted: 01/Jun/2012 at 4:19pm
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parag zulfi here what r your thoughts on speciality restaurant? ------------- U CAN WIN A HORSE RACE BUT U CANNOT WIN RACES |
Posted By: Ajith
Date Posted: 01/Jun/2012 at 5:53pm
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subu76, Just noticed it was down to 167 today.Do post your views.We have all weekend to decide at what point to buy it.Its almost always -exceptions like Jubilant F,page,google apart,dangerous to buy IPOs on listing. Let us see. ------------- Ajith |
Posted By: Ajith
Date Posted: 01/Jun/2012 at 5:57pm
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TCSer, What do you say? As good as Jubilant F on listing?Maybe it will surprise to some extent but not to the same extent obviously. ------------- Ajith |
Posted By: subu76
Date Posted: 01/Jun/2012 at 6:01pm
No new views...I fully agree that the stock price looks risky..but buying half nevertheless and will do more if the price falls significantly I Guess |
Posted By: subu76
Date Posted: 01/Jun/2012 at 6:02pm
Do veg people even get anything at Chinese places? I never have Chinese on my veg days but then that's just me |
Posted By: zulfi
Date Posted: 01/Jun/2012 at 6:09pm
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parag zulfi here what r your thoughts on speciality restaurant? ------------- U CAN WIN A HORSE RACE BUT U CANNOT WIN RACES |