Kotak initiates coverage on Speciality Restaurants

We initiate coverage of Speciality Restaurants Ltd (SRL) with an ADD rating and target price of Rs.200.

Speciality Restaurants Limited (SRL) is a pan-India food-service chain and is favorably placed as it is backed by (1) a professional management, (2) robust supply chain and (3) a scalable model. It is focusing on expanding the presence of its flagship brand, Mainland China, due to wide acceptance of Chinese cuisine and relatively superior margins.

We value the company at 27X Sept13E EPS; PAT CAGR of 26% over FY2013E-15E. The key risk is significant dependence on a single brand.

Source : Equity Bulls

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