Sayaji Hotels to focus on food business

The company will be investing Rs 50 crore on its nationwide chain

Vadodara based Sayaji Hotels Ltd (SHL) is all geared to set up a chain of 100 restaurants across the major cities of India.

The company will be investing Rs 50 crore for its nationwide chain of restaurants.

The project of 100 restaurants that would be established on the concept of "Barbeque Nation" will be competed by 2008.

"Through our restaurants we will be serving barbeque from all over the world, all under a single roof, " said Sajid Dhanani, managing director of SHL.

The main target customers are the young family belonging to the middle and higher income group.

"We will be serving 12 world famous varieties of barbeques to our customers giving them a real taste of barbeques all different locations at one single place" said Sajid.

Talking about the financing sources for the project Sajid said, "A mixture of equity and debt will be applied to raise fund for the restaurant project."

The fund will be raised at a ratio of 1: 1.5 of equity and debt respectively.

While it has approximate earning per share (EPS) of Rs 6.5 uptill September 2005, claims the company.

SHL also plans to set up a hotel in Pune for which it will be pumping in Rs 100 crore.

The growth rate of the hotel industry in Pune is more than 30 per cent.

The hotel to be set up by SHL will have 600 rooms.

The company's food and beverage (F&B) revenue from hotel business is at a ratio of 1:1.7.

It has seen a rise of 25 per cent in revenue per average room for the current year.

It holds 75 and 12 per cent hotel market share in Indore and Vadodara respectively.

The company will begin its chain of restaurants in Maharastra and Gujarat.

"In Gujarat we will open our restaurants in Ahmedabad, Vadodara, Rajkot and Surat by the year 2007" said Sajid.

Then it will expand to Delhi, Punjab, Bangalore and Hyderabad.

However, it will not move to eastern and to extreme southern India.

Initially, in the first phase, the company will set up restaurants in Mumbai with one at Pali Hill to be operational by December 2005.

By the end of 2006 it will add four more restaurant to Mumbai at localities like Lokhandwala, Worli, Chembur and Navi Mumbai.

The company plans to establish and popularise its brand"""Barbeque Nation" in Mumbai.

It would then move to Pune and Nashik by the beginning of 2007 adding further outlets in Maharashtra.

"We will further expand our network in Mumbai, and may later add five outlets after consolidating our position in other parts of the Maharashtra" said Sajid.

The company is investing Rs 10 crore in its Mumbai projects that may further be increased in near future.

The company's current year earning is Rs 4.5 crore from its Indore's restaurant business.

It expected to earn Rs 3.5 crore annually from its Mumbai operation.

"A annual turnover of Rs 175 crore is expected from the restaurants and franchises by 2009" said Sajid.

The Indian restaurant business is estimated to be worth Rs 10000 crore annually.

Till date, it earned Rs 28 crore for the current financial year.

Its operational profit and profit before depreciation for the current year stood at Rs 2.25 crore and Rs 3.5 crore respectively.

Its current debt was Rs 32 crore. It intended to raise its authorised share capital from Rs 40 crore to Rs 75 crore.