Barbeque Nation: The share of the most prominent casual dining restaurant, Barbeque-Nation Hospitality Limited, has lost 31.5% over the last year. The company got listed amidst COVID around 2021, and it has not been an easy sail for the last two years. But the interesting thing is that the institutional investors have raised their stake in this company from 34% in March 2022 to around 50% in June 2022.

Even the ace investor, Ashish Kacholia has bought 2.53 lakh shares of Barbeque Nation which amounts to around 1.43% stake in the company. As he bought the share around the average price of ₹1,163 or ₹29.5 crore in April 2022, the share surged up 6%. Kacholia so far has not sold any shares based on BSE data.

So, let’s find answers to some important questions – How does Barbeque make money? Why is the share price down? What does the future of the company look like despite a not-so-good start?

Barbeque Nation – Business Overview

Barbeque Nation was established in 2006 and entered the restaurant segment with the ‘all you can eat’ concept. It is now one of the leading casual dining chains in India. It is also a pioneer of the concept of “over the table barbeque” live grills embedded in dining tables which allow guests to grill their barbecues right at their tables.

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Let’s understand the diversification process taken by the company. Six years ago, 97% of the revenue came from the Barbeque Nation India dine-in business. Over time, the company has successfully created multiple growth levers for the business. 

It is more than just a dine-in business today. They have a steady international business, a large delivery platform, and four brands – Barbeque Nation, Toscano, UBQ, and Dum Safar. As of FY2023, the Barbeque Nation India dine-in business contribution has reduced to 75%. 

Recently, Barbeque Nation Hospitality Limited (BNHL) and Red Apple Kitchen Consultancy Pvt. Ltd. (Toscano) have jointly acquired a majority stake of 53.3% in Blue Planet Foods Private Ltd. (Salt).

Blue Planet Foods runs an a-la-carte pan Indian cuisine restaurant chain under the brand name ‘Salt’. Currently, it operates 6 restaurants and has 2 restaurants under construction/pipeline. Salt delivered revenues of ₹32.8 crores in FY23 with 19.4% EBITDA margin and 10.0% PAT margin.

Out of all the brands operated by the company, UBQ and Dum Safar are their brands, whereas Toscano and Salt were acquired. The company has 212 restaurants under its portfolio as of Q2 FY23.

Barbeque Nation- Portfolio
DistributionFY23H1 FY24
Metros & Tier I162162
Tier II & III cities5450
Total Network216212

Reasons for adversity

Although the company has been in an expansion stage, it has been facing losses for the last two quarters. It launched 31 restaurants over the past two years but had to close 12 as losses hit.

You can also assume competition when it comes to the Dining Industry. The competition from Quick Service Restaurants (QSR) is also affecting the business. The average ticket size for a QSR is around ₹500-₹600 whereas for BBQN it is around ₹950. So it is evident that, in a price-sensitive market, QSR has an edge over BBQN.

Rising inflation and a market slowdown in the dine-in are adding problems to the business. The industry is experiencing a slow demand environment. But when disposable income increases, casual dining will pick up as well.

Although one could argue that the industry overall had a tough year. Yes, that is true, but BBQN’s lack of performance stands out among others.

Figures in INR croreNet sales and other operating income
Sep 2022Sep 2023Y-o-Y growth
Barbeque-Nation Hospitality625.36625.580.0%
Devyani International1,4252.151,666.1114.7%
Jubilant FoodWorks2,556.592,703.175.7%
Sapphire Foods India1,109.031,297.0217.0%

The figures for net sales and other operating income are from April to September.

To be true, most of the restaurant companies listed are Quick service restaurants (QSR). As their price point is around ₹500-₹600 and BBQN has doubled that, it is putting pressure on the operating part of the business.

What’s next for the company?

Although it has been a difficult phase recently for BBQN, metropolitan cities have been a silver lining. The restaurant has mostly done well in tier I cities, but that wasn’t the case with tier II & III cities. 

Rahul Agrawal, CEO, and whole-time director, of Barbeque Nation mentioned during the earnings call of Q2FY24 that over the last two quarters, the company has expanded the stores in the Barbeque Nation India business and is focusing on increasing the capacity utilization of existing stores. They have also exited unprofitable tier II & tier III markets. 

The company is planning to expand the stores to 220 in FY24. In the long term, the company aims to maintain 70% of its stores in Tier I and the remaining 30% in Tier II and Tier III cities.

A Look At Financials

The company had made losses of ₹92 and ₹25 crores in the financial year 2021 and 2022 respectively. The revenue increased by 43 % to ₹1,234 crore in the financial year 2023. As a result, the company had a profit of  ₹19 crore in that respective financial year. 

The debt of the company stands at 711 crore with a  debt-to-equity ratio of 1.86. It has an ROE of 3.68% and an ROCE of 8.92% as of FY2023.


Like most of the consumer category businesses, the restaurant industry had a rough 2023. Although it can be said that 2022 was an outlier and can’t be compared, what is important to understand is that it is still a challenge for BBQN to operate with the pricing they have.

Consumers will tighten their purses until the inflation cools down. What that implies is that the majority of the population will have their attention towards the more affordable options. But once inflation cools down, and the disposable income of the population increases, the dine-in business will do well in the future.

But still, it’s worth remembering that investors like Kacholia are not selling and watching the situation more prudently. So, is Barbeque Nation on your watchlist as well? Let us know in the comments below.

Written by Nalin Suriya

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