We have shut down non-profit making units and we are a debt-free company: Anjan Chatterjee, Specialty Restaurants

“We will be doing a food park in an area called Patia in Odisha. It has a huge potential. This is a joint venture and that will actually make a difference,” says Anjan Chatterjee, Founder, Specialty Restaurants

It is a full quarter after a long time. Can you tell us what happened in the quarter?
Coming to same store growth, the pandemic has taught us a lesson that we have to take a call on the ones that were not making profits or sitting on the fence. The non-profit making units have been shut down and a manpower rationalisation has happened.

Interestingly in the case of the cloud kitchen and the kitchen within the kitchen, for a 15% same store growth, we have been able to optimise the assets and today the model we are working on is a very balanced one. We have been able to look at everything all over again and consolidation has happened and going forward, it will be a good track as the numbers come in but we are here for a long term. We are a debt-free company. Whether it is Mainland China or Oh Kolkata! and other brands. All of them are extremely popular with people and we have been able to sustain ourselves for almost 26-27 years. So, it is a rebirth and the new model is coming in all over again with deliveries going up.

It is a new model for us because we were a dine-in restaurant, then we have the wet leads which have come in Hoppipola and The Episode. So, there is a balance of everything coming in and things are looking very very bright.

We understand that you are talking about a complete rebirth and this pandemic has made a lot of us reassess the entire system as well. Can you tell us more about the demand environment? What could be the guidance for the full year in terms of growth as well as revenue? The margins have held up quite strongly after shutting down the loss-making units. What could be a sustainable margin going forward?
I am not allowed to give you any numbers in particular but this is a trend we have already set. There are seasonalities, cyclicalities which keep on coming. The next quarter is going to be comparatively balanced compared to the first quarter because we never expected the first quarter to do so well and over a period of time, people continue to be coming in to the brands because of the hygiene, respect. People are choosing more and more branded restaurants and also for the deliveries, where we have found a strong footing.

This is the trend which we have set in and going forward it will be better and better. The third quarter is the best quarter and the fourth quarter also. People have started coming into good restaurants and we are very confident that we will continue to maintain similar numbers.

I understand that the company is looking at demerging the lease hold land in Odisha into a separate unit to develop the land and set up a separate business of food park itself. What is the game plan here? What kind of revenue potential could it have and what kind of synergies are you are anticipating with this move?
We had a piece of land for a long long period and we did not do anything else. We did not want to digress from the core area of the restaurant but a joint venture has been formed and it is in a prime area. So, we will be doing a food park in an area called Patia. It has a huge potential. This is a joint venture and that will actually make a difference. We will make a vertical for that. This is a different kind of a business but fortunately we partnered with somebody very competent who has the expertise in this area and this will give us a different exposure, It will take a year and year and a half to set it up. This is a completely different move we did because the fact that we had a piece of land and we thought that there is a huge opportunity in this area.

What is the kind of investment will you be looking at?
This is a joint venture in which the investment will be done by the partner and we will be looking at operating the place but we have a 49-51 kind of an understanding. So we are not going to be investing too much money except the operational area and controlling the whole thing.

In terms of the raw material prices, how much lag does it generally take to pass on the entire thing because it is very difficult for you to pass on the entire price together? Different restaurants have different profiles of customers, How are you looking at that?
We have a history of dealing with the suppliers over a period of time, we have seen ups and downs. We are a debt-free company. All the suppliers trust us; lots of cash discounting is being done and we have given them money in advance. Plus we have a huge volume of purchase.

So, although there is inflation, the whole team is involved in the purchase and we know that this is going to be slightly wavering over a period of time. But we have not passed on too much to the consumer and we have just kept it 3-4% over a period of time. We want to continue to follow our proposition which is five-star food and services at non-five star prices. That has been a balance and we are very happy doing that.