Vidli Restaurants Limited

vidli-restaurantsVidli Restaurant Limited (VRL) is a “Kamats” group company running chains of restaurants serving hygienic standardize food items in a quick serve format at various outlets on national highways, state highways and cities. The group is known for its brands “Vithal Kamat” and’ Kamats’. The Company started its operations in November 2013. Since then, the company started expanding its restaurant chain and concentrated on standardising its products and services through centralised purchasing and training system. As on December 31, 2015 it had 39 restaurants in western and central territories on major highways.

Why Invest?

  • The promoters have experience of running hotel chains and restaurants for many decades.
  • The company has major presence in Maharashtra as of now (32 outliets). I believe there is a lot of scope to scale the operations from current level.
  • I like the fact that the business is cash based business so there is no scope of receivables mismanagement.
  • The value proposition (on quality and price parameters) offered by these restaurants is very good.
  • Zero long term debt, 1 Cr. in Fixed Deposits, 1.12 Cr. in cash and cash equivalents, 1.47 Cr. in current investments as on September 20, 2015. Given that the market cap is just 12.90 Cr. (Current Market Price is Rs. 29.80), these numbers give a lot of comfort.

Some concerns:

  • Limited Operating History.
  • Highly competitive industry.
  • Ms. Vidhi Kamat who runs the company is a first generation entrepreneur.

5 thoughts on “Vidli Restaurants Limited

  1. Presently they have 72 active franchisees and the run rate for franchisee addition is increasing at faster pace.
    Has hired Mr Lowell Farkas as consultant who headed PANERA fast food chain in USA .
    All the systems and centralized supply chain are in place now.
    Opened outlets in Gurgaon, manali, Shimla , Gujrat and opening one at Delhi Airport soon.
    Recently opened outlet outside Meera road station and planning to open more outlets on Mumbai local train stations .
    All franchisees are registering healthy year on year same store growth in sales.
    The half yearly results on 8th Nov 2016 are expected to be above market expectations which will bring the P.E ratio at reasonable levels.
    Company plans on track to add 400 franchisees till the end of fy 18, in that case they will get a PAT of 6-7 crores. Market gives a PE of 55-60 for QSR high growth consumption sector story.
    So the market cap can reach a level of 400 crore plus levels.
    Presently it have a market cap of 49 crores so its a sure shot 10 bagger from here.

    • They are growing at a fast pace. Correct. They have good balance sheet position. Correct. However, given the run up that the stock has had in the last 6 months, the performance in terms of bottom line has not grown at that kind of pace. I understand that the valuation needs to be looked at from a future perspective given the potential for growth, but I would rather wait for some good show of number and add at higher levels. Still seems to be a great story going forward!

  2. Very BAD RESULT from the company. 21Lakhs profit vs 25Lakhs profit (y-o-y). Even if we give P.E. of 40 to the company then it doesnt deserve the price greater than Rs. 40.

    Also look at the history of their family owned company Hotel Kamat listed on BSE. It was a serious wealth destroyer for an investor.

    So it is better to book profits instead of wasting your wealth on this stock

    • Vidli half yearly results not bad –

      Yoy sales 2.36 crores from 1.62 crores last year ,a growth of 45%
      Pat 0.22 lacs as compare to 0.25 lacs last year, a drop of 14%

      Major increase of 120% in other expense amounting 62 lacs .
      other expense at 1.13 crores as compare to 0.51 crores last year.

      If other expenses were not increased the company would have had a PAT of 84 lacs.
      As per the management increase in other expense is one time figure and will not be there in
      Future.

      Non-current assets are increased by 1.10 crores in last 6 months since 31 March 2016
      And cash and bank balance is increased by 1 crore in last 6 months since 31 March 2016, which is very positive and shows that the cash flow is very healthy from the business.

      • kindly check other expenses of last half year results ending 31st march 2016. it was 90 lakhs. this half fy 17 it was 1.13 crores. so this figure will remain and it is not one time expense.

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