Yes agree with you, if market like US has not seen fine dining becoming a trend then probability of that failing in India is also high or may be its our perception that`s flawed. Our perception seems to be seeing SRL brand everywhere and in every house, may be that is not how food chains work. May be few restaurants are enough to make a killing in this business. The mantra may be have 200-300 restaurants in all over India and run them in profit.
I have used the word "May be" all over because even I am not sure of all these, the thing I am betting on is the current profit making structure which is making profit. Any change in the fine dining trend or ppl perception will be bonus only and not a compulsory criteria to make money from this stk.

Sam,
That was fantastic insight on this business. I did not know all these. What you have said is one side of the coin, there are many businesses around us that defy our logic. Take for instance the mobile business, every indian, rickshaw walas to fruit seller to everyone has a mobile, thats the kind of penetration this business has achieved and by the logic this business must die down now becoz no one will buy as they already have mobiles and what we see is a logic defying phenomenon, smart phones are sold at exorbitant prices and yet they get buyers lined up.
The same applies to speciality rest as well, if it was so difficult to maintain the cost, they wd not want to expand but they are expanding, it means they know something more than what we know. Moreover the footfall logic doesn`t seem to be correct, its not the shortfall of ppl but the footfall that should be coming to srl is going to the unorganized sector and down the line that unorganized sector will be pushed out of the market by chains like srl and then u will see the same footfall in srl. This is what was done to goldspot by coca cola, to kiranan stores by walmart and many more. It took time but ultimately were pushed out of markets.

nice numbers, but once u leave the metros the rent falls. Sure the avg realisation too will fall. The advantage i see is in a country with so much of black money, the money bag cities like Indore, NCR, Ahmedabad, will see good foot falls among the non metros. 150 is the price the mgt thought good enough to sell, so we may be able to see a 8% growth, so this p.e. looks high. But if the ops cash flows start coming in...price could move up. Sadly not enough nos. Same store sale, per head realisation - sigree, mlc, sweet bengal separately...would be appreciated at least in the annual if not in the quarterly. Till then fingers crossed. Next buy at 140 phaps....

Food is a big business and it will grow in India. Big part of the consumption story (mostly over estimated by analyst). Spoke to one of my restaurateur friend and here is some back of the envelop calculations. The typical month fixed cost (rental, maintenance, license for liquor, staff) for a big fine dining place in Metro is about 10L. Rental is the biggest cost. The direct cost (fuel vegetables, poultry, grocery etc..) is about 35%. Means you have to make minimum of 16L every month to break even. Given average revenue of 1000 per table. (2 people) it is 1600 PAC. It is more than average 60PAC a day. 60 PAC is usually a challenge for a working day. (Mon to Thursday).
Now coming to MLC... The same store foot fall (revenue) is not increasing. This is true indicator of growth. The average revenue of visit has decreased in last quarter. I think it is in Rs675 range. Now the growth in revenue and profit are coming from expansion (which is not sustainable) and not higher utilization of same store. Management have outlined plan to improve utilization by breakfast/small set up and fast food format... it will be interesting to watch how it panned out in next 3 for 4 quarter.
All over the world, not many publicly traded Successful fine dining chains but there are many Quick format store from Starbucks to Macdonald.. Let’s see! may be SR will prove all wrong and emerge as big success story.

Dear Sam_Myview, your concern is reasonable, the change in trend will not happen overnight, it may take 10-15 years to get ppl used to this fine dining culture. But that does not mean till then the stk price will remain at 150 only and all at a sudden after 15 years it will touch 2000 rupees. The change in trend will be gradual and so is with the price as well. Without profit they would not have expanded from just 5 restaurants in 2003 to 96 rest in 2012, there is definitely profit in this business and that is why they want to expand more faster and for that they need huge money and thats the reason for the IPO. I have a feeling that if this stk is accumulated in SIP mode then it will not disappoint us and may put us in good profit in next 2 years.

This holding may be part of the IPO. if they were one of the market maker then there is a lock in period before they can liquidate initial holdings. Company have no obligations to explain the change in holdings. Wil suggest wait and watch for few quaters before taking any fresh positions. Now most of their profit is from Mutual fund investment (IPO money) than from operations.

will the management bother to reply why the MF holding happened, and why it is declined so sharply? and what is the current position?

150 is a psychological barrier and it broken twice today. Once it closes below 150 it will rapidly slide, may be 120 level. It is a concept stock may do well in long run if all things fall in place.. but that is a big IF... I do have the guts to make it 10 to 12% of my portfolio :).. Not yet convinced that the organized food chain business will work in a very disorganized/regional centric country.

agree Sam_my view. I just tested the waters with a very small lot at 155, watched it go to 162 and now see it at 150. No complaints so far, but not liking the fact that the MF holding has fallen from 23L shares in June 12 to 16L in Sep and 10L in Dec. Morgan Stanley is a big holder - and I have no clue whether this is a material holding. When I buy i take big punts and go upto 8-10% of my equity allocation. Now wondering whether to add at 150 or wait for it to fall below 150. That could be a psychological barrier and set the wolves on the share....

"Drive Volumes before you can worry about profitability" is been a death trap in Retail industry. Company need to scale/drive volume profitably. Random expansion and multi format will lead to operation chaos and loss of Brand Identity. Once you lose the pricing power you will never get going to get it back.

all companies go through growth pangs. You need to create volumes before you can worry about profitability. Scales have to build up. Not in a hurry to be dismissive let us wait for 3-4 quarters, then the nos. will start looking good. It should be a good buy at 152-55 range - that is almost the issue price...but right now it is shooting in the dark.

Sir, why operating MLC in Gujarat is different thn other locations ? I have been twice to MLC surat in weekend, and to my surprise there were only 10 more patrons besides 5of us. I was there for more thn 2hours, there was no more thn 15/20 patrons at any given time (8 to 10pm) which is shocking, and translates to 85% unoccupied space. I think stock will b better buy around 100 rs