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Barbeque-Nation Hospitality Ltd
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Ladies and gentlemen, good day, and welcome to the Barbeque Nation 1Q FY '23 Post Results Analyst Conference Call hosted by Ambit Capital. [Operator Instructions] Please note this conference is being recorded.
I now hand the conference over to Ms. Videesha Sheth from AMBIT Capital. Thank you, and over to you, ma'am.
Good evening, everyone. Welcome to the 1Q FY '23 earnings call of Barbeque Nation Hospitality Limited. From the management, we have with us Mr. Kayum Dhanani, Managing Director; Mr. Rahul Agrawal, CEO and Whole Time Director; and Mr. Anurag Mittal, Chief Financial Officer.
I now hand the conference over to Mr. Kayum Dhanani. Thank you, and over to you, sir.
Thank you. A very good evening, ladies and gentlemen. I take the pleasure in welcoming you to quarter 1 FY '23 conference call of Barbeque Nation. Since the onset of COVID a couple of years back, this quarter was a fully normalized quarter. We are happy to report yet another remarkable performance at our company with our consolidated quarterly revenues crossing INR 300 crores for the first time in the history of Barbeque Nation. We reported highest ever revenue of INR 315 crores during this quarter, which is around 3x of previous year quarter 1 and 25.4% higher than the immediate preceding quarter.
Despite a challenging inflationary environment, we managed to -- we managed our gross margins well and achieved gross margins of about 66.8% during the quarter. This was driven by targeted efficiency projects, better cost management, calibrated price increase and change in business mix towards dine-in. We also reported healthy EBITDA margins of 23.3%. We have clearly defined pillars of our growth, namely Barbeque Nation India, Delivery segment, Toscano and Barbeque Nation International. We're extremely focused on growing each of these 4 verticals to build one of the largest food service companies owning its restaurant brands.
In our core segments of Barbeque Nation India dine-in business, we added 9 new restaurants taking the total India network to 176 numbers per restaurant. Our India business has grown well over last year and previous quarter, led by higher covers and higher realization per cover. We have a strong pipeline of under construction and under evaluation sites planned to cross 200 outlets of Barbeque Nation in India in this financial year. During this quarter, our dine-in to delivery mix has changed in favor of dine-in. We have witnessed a decline of around 6% in our delivery business as against the previous quarter. While our a la carte orders have continued to grow, our box orders have declined. Our delivery ratings have continued to improve, with our focus on delivery business, we believe the business will stabilize at the current levels.
Toscano business has grown by around 54% versus the previous quarter, led by both dine-in growth and 2 new outlets added during the quarter. Toscano now has 13 restaurants across 3 cities, and we plan to add around 5 more restaurants this year. Toscano delivered healthy store margins of 23% plus in this quarter. International business is the highest margin business in our portfolio, with store margins of over 25% plus. We have demonstrated sustained SSSG and profit growth over last 3 years and now are looking to add 2 to 3 restaurants this year. We are extremely focused in building and growing each of these 4 verticals and build one of the India's largest brand, owning food services company. We have always built this business with focus on our guests and employees. I'm proud to share that this year, we've ranked 7th in the Great Place to Work survey. And we're also ranked among the top 10 retail companies to work for in India.
With this now I hand over to Rahul to take you through the quarterly performance of the business. Thank you.
Thank you, Kayum, and good evening, everyone. We are happy to deliver the record quarterly sales and profits at Barbeque Nation. Our operating revenues in quarter 1 FY '23 was INR 315 crores compared to INR 102 crores in a COVID impacted quarter of quarter 1 FY '22. On a sequential quarter basis, we grew 25.4% driven by growth in volume and average realization. We reported strong SSSG year-on-year of [ 182% ]. SSSG as compared to the previous quarter was [ 19.8% ]. Our dine-in segment has grown around 6x versus the previous year and 32% versus previous quarter.
Our dine-in to delivery mix change in favor of dine-in, the absolute delivery business has declined by around 6% on a sequential quarter basis. Toscano business has subsequently -- has sequentially grown by around 54% during the quarter and delivered 23% plus store margins. Similarly, our international business has sequentially grown by around 24% and delivered 25% plus store margins. During the quarter, we reported gross margin of 66.8%. [ Despite ] inflationary pressures on the input costs, our calibrated price hikes and improved operating efficiencies helped us to manage gross margins better.
Our reported EBITDA was INR 73.4 crore in quarter 1 FY '23, delivering a healthy margin of 23.3%. Our adjusted EBITDA without the impact of Ind AS and excluding non-cash ESOP related expenditures were INR 46 crore, delivering 14.6% margin. Out of the total portfolio of 195 restaurants as on 30th of June, around 80% restaurants are matured, which is more than 2 years old. This matured portfolio delivered annualized sales of around INR 7 crores per outlet with store margins of 21.5%. Out of our new restaurant portfolio of 38 outlets, 24 restaurants were less than 6 months old and are growing well. This portfolio delivered store margins of 6.2%, both the numbers are without Ind AS. As this portfolio matures, we believe this business will start to improve.
Our sustained -- we sustained our momentum in network expansion and added 11 new restaurants during the quarter, taking the total network to 195 as on June '22. We have a robust under construction pipeline and a strong pipeline of working further sites, and they're progressing well towards our target of 40 restaurants in FY '23. Strengthening and exploiting our core dine-in business, growth in our delivery verticals, unlocking the growth potential of Toscano and calibrating international expansion continues to be the key 4 vectors of our growth agenda.
With this, we can now open the session for Q&A. Thank you.
[Operator Instructions] We have a first question from the line of Harit Kapoor from Investec Capital Services.
So my first question is on the margin side. So Rahul, at 14.5%, I think adjusting for other income around 14%, given that Q1 is not a very peak quarter for you, you peak out in Q3, you have higher operating leverage during that time. Do you expect that full year margins could actually be a bit better than what we kind of achieved in quarter 1? Is that a right way to look at it?
Yes, Harit, you're right. So quarter 1 is sequentially not the best quarter for us, it's quarter 3 followed by quarter 4, quarter 1 and then quarter 2. So with the margins that we have in quarter 1, we should definitely achieve more in quarter 3. This only caveat there would be on growth side. We are almost at a run rate of around 10 to 12 sites every quarter now. So by quarter 3, we would have approximately 50 sites which are less than 1 year old. And barring the drag from these on the overall margin, but our matured portfolio should definitely do better than what we did in quarter 1 this year.
Got it. Got it. And can you call out the ESOP impact for the quarter in term, rupees million, what number?
[ Without ] ESOP?
Yes. The ESOP -- ESOP revenue per provision?
Yes. Yes. Yes. So the non-cash ESOP provisions was approximately 0.4% of top line. So approximately INR 1.5-odd crores for the quarter.
Quarter. Okay. And that's a run rate which is expected to continue, right?
Yes. Yes.
Got it. The second question was on the demand side. So one would expect that there would have been a pent-up kind of benefit post the third wave and you would have been the beneficiary of that. I just wanted to know, as the quarter ended, did you see similar kind of -- or even into July, have you seen kind of similar strong trends in terms of occupancies, et cetera?
So definitely improving. If you look at sequential quarter growth, obviously, quarter 4 last year was impacted by Omicron wave in January. But if you look at the 25% growth that we did on a sequential basis, around 19% of this has come from wealth of volume increase between quarter 4 and quarter 1 this year. But despite this, while this is improving, we also have still an opportunity to increase our overall covers by 10%. So what I mean by this is the average cover that we used to do or average term that we used to do pre-COVID versus now, there is still a gap of 10%, which is an opportunity that we still see in our business going forward. The only thing is that quarter 2 is unfortunately a [ weakest ] quarter. This has things like Shravan, Shradh, even Durga Puja Navratra is all in this quarter. This is -- actually it's not good for non-veg consumption in the -- in India and that impacts us definitely.
Right, right, of course, of course. So you're saying that from a table turn perspective, your average of [ 1.8, 1.9 ] is about 10% lower right now and you have that gap yet to make up?
Yes, we still have 10% gap to make up versus pre-COVID, right.
Got it. Got it. My last question, and I'll come back towards that was on the delivery side. So it is expected that you would have seen some kind of a fall in the -- on the delivery side. I just wanted to get your sense, is this the kind of run rate that you're now kind of expecting for the rest of the year, or are there some efforts in place to kind of increase assortment of the portfolio or greater extension kitchen in the sector which can drive this number up a little bit as we go through the year?
Yes. So on delivery front, as you mentioned, it's declined by 6% sequentially, but there are 2 sub components to that. One is obviously our Box product, which was a key product during COVID years. And the second portion was our a la carte business, which is individual orders or a couple of items going in order, all these, right? So the a la carte segment has actually grown versus last quarter also, in this quarter, but our Box product business has come down a bit, our Box product obviously, the group eating products. But we've also seen that the increase that we saw in our dine-in business on a larger base was significantly higher than the drop that we saw in the Box segment of delivery, right?
So overall, the mix has slightly changed in favor of dine-in. My expectation is that this should stabilize at the current levels what we did in quarter 1. In July, we have done pretty much same level numbers as we did in quarter 1. But there are a couple of interventions that we're making. We are -- we're actually working on a dedicated delivery-only online biryani brand. So we are -- we've been working on this for quite some time now. And I think they're at a stage wherein this month, we should pilot it in few locations, and depending on the success, we will take it up Pan India. So as we always maintained that as Barbeque Nation, given that we own our kitchens, we own our brand, we have the ability to add multiple stuff, and biryani being one of the largest category, we're expecting to do something on that front. So I think while currently the number looks stabilized, but once something like that kicks in our business, this number on delivery can further go higher than this.
[Operator Instructions] We have next question from the line of Sameer Gupta with India Infoline.
This is Percy here, Percy Panthaki. My first question is this plan of opening up restaurants internationally. I think earlier when this was discussed, you had mentioned that you would prefer to go through the franchisee route here. You would not want to put any CapEx in international. So does that plan still remain? Can you give some idea as to what is the mode of expansion into international?
Yes. So we are exporting both, Percy. And we also have said that while we will do franchisee in international markets, we'll also look at a couple of sites maximum from our own balance sheet. So as of now, we have a pipeline of around 3 sites, but they are -- we don't know whether that will -- that will completely [ certified ], but we may add around 2 to 3 from our own balance sheet. At the same time, we are also exploring franchising in a few of the geographies, but the lead times on these are really very high, right? And that's the plan on international. But [indiscernible] we'll not go [ over bold ] in terms of with, to say, 7, 8 outlets right now. So this year at max, we'll do 2 or 3 outlets from our own balance sheet.
And what would be the CapEx per store here?
So this would be around INR 4 crores or so, but the payback periods and all are pretty much similar. If you look at the international business, it's already delivering around INR 10 crores of average revenue and 30% plus store margins. So the payback period wise, it's around 2 years, which is similar to -- or slightly better than what you all have seen in India. So we know that we don't want to completely add more and more given that the payback period is slightly better as of now. But I think a couple of years -- a couple of sites in that market is justifiable.
Okay. And these 2, 3 sites, you have located -- sort of shortlisted, they are all in Middle East or some...
Right -- right now, it's Middle East only. So it's not -- so not opening up a new market right now. It's only where we already have the teams, the products, the business is set.
Okay. Second question is, did I hear you right that you mentioned that basically the number of bills per restaurant are 10% below the optimum level, something that you mentioned?
Yes.
Okay. So just wanted to understand because there are a number of people, right?
Yes, yes.
Okay. So just wanted to understand because this has been a completely normal sort of quarter. And in fact, to some extent, there has been revenge spending on these categories that is people have sort of possibly gone out more than what they normally would. So why is it that we are still 10% below the optimum level? And what would be required to bring it up to 10%, I mean another 10%?
See, no, the last segment, which is still not back 100% is corporates. Most of the IT corporates also are not fully back. So our weekday businesses, weekday lunch businesses are still slightly lower than what we used to do on a pre-COVID basis. So I think that's a big gap. Apart from that, on the weekend side or on the friends and family segment side, I think they are pretty much sorted there.
Understood. On margins, you are about 13.5%, 14% margin this quarter versus our sort of target of 15%. There is obviously input cost inflation and you have taken some price hikes. So how fast do you think you can come back to that 15% level? Will Q2 be back to that since the price increases have gone through during the quarter and they have not affected the full quarter of Q1, but they will affect the full quarter of Q2. So would that -- would I be right in assuming that or it would take more time?
So I think we should look at it for the full financial year basis, quarter 2 may not be there because of a seasonally weak quarter. But based on quarter 3, quarter 4 numbers that we come in, I think blended basis full year, we should be at 15% margin.
Okay. So for FY '23, we still have hope of being 15% for the full year. Okay. And my last question on -- is on this new brand of biryani that you are sort of planning out for delivery only [Technical Difficulty]. Hello? Hello?
Yes. Sorry. Can you repeat your question, please?
Yes.
Yes. I can hear you, sir.
This biryani brand, which you are sort of planning to launch for delivery only. Can you give some thought process there? See, because Barbeque Nation itself is very well known for biryani. So why have a second brand here, if at all, we want to do something with a different brand in delivery, we should be doing it in a type of cuisine where we are not already present?
So I tend to slightly disagree here. So look, Barbeque Nation brand is more of a dine-in brand with all you can eat, value offering service driven, experience driven. And if you look at our delivery business, also, we largely do it under the UBQ brand, where you also have Barbeque Nation still, but UBQ brand actually stands for a la carte offering on an Indian cuisine segment. And while we serve biryani in across both these platforms, these are not dedicated biryani platform. And we all know that biryani is now the largest categories in the contained -- in delivery segment. And we have been obviously preparing biryani and serving biryani for many years across all our platforms. So it is pretty much a natural extension in a different category for us.
But when you want to compete in a market wherein there are dedicated players, I think that required a separate brand look and feel and focus. And that is why we are evaluating it under a new brand, which is very much under the pilot stage right now. And if things go well, hopefully, we'll plan to launch [ 3 ] in a few markets in this month itself. And very early stage, so I think let's see how it goes and then maybe we'll update on how this is performing.
[Operator Instructions] We have a next question from the line of Vijay Patra with -- an investor.
Yes. I thank you for your management adding in the stock. I'm fond of Barbeque Nation since the last 10 years when it was opened first in Pune. What I suggest because first thing, you can open more outlets in particular metros and Tier 1 and increase your revenue, automatically, you will get the profit and automatically, everything will come because the stocks are excellent. And it shows that your HR policy is good, and very good atmosphere, and it's excellent, that is as an individual, I can say. But I feel to increase more profit or increase the outlets, because very few outlets are there in cities. It's better you can rapidly expand, that would be ideal to increase the revenue, everything. I hope you will do that.
Thank you, sir. Thanks for the comment about our team. Thank you. And regarding including this -- the number of outlets, we are geared to do that. We're planning to add up to 300 in the next couple of years, sir. Thank you for your comment.
We have next question from the line of Vicky Punjabi with UTI Mutual Fund.
Just one -- just back to that -- to the biryani outlet, biryani brand launch, I wanted to understand if these get served from the same kitchen, how much of spare capacity do we really have in terms of scaling up? And I mean, just to understand, I mean, it seems like there will be no incremental cost at least for the launch of this brand. It will be largely from -- I mean my understanding is it will be largely from the same kitchen, and it gives us a better leverage in terms of enhancing throughputs?
Yes. Also -- when you say capacity, did you mean space in the kitchens or?
Yes, exactly. I mean, can -- I mean it's about turnover that a kitchen can kind of support, right? So how much of turnover can get supported by the current kitchen is what I'm trying to understand?
Yes. So since last 2 years, whatever new restaurants we're creating, we're having a dedicated space for our delivery operations inside the Barbeque Nation outlet. So it's pretty much in a very crude manner shop-and-shop kind of model. And we are doing our UBQ operations today from the same setup, right? And when we designed it earlier, we also designed it with a flexibility that tomorrow we can add some dedicated machines and also put it and serve it. So I think in some cases, obviously, we have to create some space. But by and large, we're also launching in those places where we have that. And we have not seen -- we don't expect also that place to be congested.
Also, while doing the research for this particular brand, we also obviously upgraded the overall biryani experience, both in the outlet, also in UBQ, and also for this stuff -- for this new brand that we are contemplating. So we don't see that. And overall, I think with this new sort of setup and category, we expect that the incremental revenues and profits should be -- should have pretty much the same dynamics as we had when we did our UBQ launch from our outlets.
Okay. Okay. And on this cloud kitchen, as you are seeing some kind of problems coming in, which is more like now 15 stores count is where we are kind of stabilizing at. What are kind of success out in biryani segment? Would that lead to incremental growth in that segment as well, or this is more looking -- I mean we are looking more -- I mean we're looking at this more from the leveraging of the current kitchen space only?
No. So Vicky, I think let's look at the 4 vectors of our growth. And apart from Barbeque India, Toscano International, biryani, one of the key segment of our growth. And we are very focused on this segment, right? We have done, I think very well over last 3 years. This year, some of the immediate COVID related push that we got in our delivery, we have seen sequentially coming down, right? And that doesn't mean that we don't believe in this space or we don't believe in the growth opportunity of this space. This is something that we've been working on for last 6, 8 months. This is something that -- our philosophy is that how can you make delivery as at least 20% of your overall business, and then what are the things that you can leverage to do that.
We launched extension kitchen from the same perspective. When extension kitchen launched versus now, obviously, the average daily sales from delivery segment has come down. And I've always maintained that extension kitchens will also -- will only start making sense once the average revenue per outlet goes up to [Technical Difficulty]. So that's why you noticed in this quarter, we have not added any extension kitchen. The focus first is to increase average daily sales from the existing network, which is now close to the [ 195 ].
Once this goes up and individually this can sustain in extension kitchen also, then we'll be adding more extension kitchen is not a problem, right? So immediate focus is that, don't worry about extension kitchen, try and increase the throughputs of deliveries per outlet, and once you do that, then your delivery will anyway be taken care of also by adding more capacity from extension kitchen. So that is the broad thinking we have on this entire thing. This quarter, for example, I think the focus of the team would be to stabilize this new stuff that we are piloting in few places, this may take 3 to 6 months. And then once the basic number is achieved and the extension kitchen model is profitable a that -- at a double-digit number at least, that is when you push the escalator on the extension kitchen side.
Sure. Just one thing, I think I missed this, what's the guidance for CapEx and store addition?
So we have guided for around 35 to 40 outlets. As of today, we launched down net 10 outlets this quarter based on pipeline of 15 under construction sites, which are already [indiscernible] done. And there are 15 sites wherein they have finalized the commercials, they are in various stages of diligence. So today, we have complete visibility of the 40 sites that we are planning to open this financial year. I think we still have around 8 months to ago for the year. Depending on how the new pipeline gets built up over next couple of quarters, we may have to revise the number of sites maybe upwards in the next quarter. But as of now on the 40 sites, our overall CapEx, including maintenance CapEx, some of the stuff that you might -- CapEx stuff that you might do for the biryani stuff, we maybe at a CapEx of around INR 130 crores to INR 140 crores.
We have next question from the line of Sameer Gupta from India Infoline.
Am I audible?
Yes.
Hello?
Yes.
Sir, just a question on the sales per store, which I think this quarter you have done about INR 6.6 crore sales per store. And [Technical Difficulty] was that dine-in itself should get us INR 6 crore, and then INR 1 crore on top of that should be delivery. So we would be doing about INR 7 crore. So is that a sort of fair thought process to go with even today after seeing some amount of cannibalization between dine-in and sort of delivery? And in this analysis, let us keep this new biryani launch aside, whatever comes from that will be over and above that. But given the demand situation right now for the full year FY '23, what kind of sales per store do we feel confident delivering?
So I think INR 7 crore is a decent number to work with. If you look at our matured portfolio, we have done around INR 7 crores there by analyzing the performance of quarter 1. And our historical numbers in quarter 1 and quarter 2 put together is not strictly the representation of the full year. In the restaurant business, second half is always better, given the festive seasons, New Year and other stuff that comes here. So just on the matured portfolio, I think based on the current numbers, we should cross INR 7 crores, which is what we are -- which is what we are currently witnessing in both our dine-in and delivery segment put together, right, without the new initiative.
Our new portfolio -- new restaurant portfolio is right now actually very young, right? If you remember, the real increase in our pipeline or increase in our stores started coming from second half of last year. So out of the 38 site, as I mentioned in my commentary also, around 24 sites are less than 6 months old. So in those outlets also, the margins are just about breakeven. They normally take around 3 to 4 months to start breaking even, right? So that's what's impacting the overall [ 16.6 ] and the margins where they are. So on the -- as these matures, I'm pretty confident that our revenue and margin numbers should be INR 7 crores plus and at least [ 21 percentage, 22 percentage ] at store level.
Understood. Understood. But given the fact that at any point of time in future, we will always have some stores which are new and in ramp-up mode. So if I include them in the average, what would be a correct number to go along with for FY '23, FY '24, about INR 6.5 crore would be a fair number to go along with that?
No, look, in the current quarter itself, we have done around INR 6.65 crores, right?
Yes.
And like I'm saying this is not the representation of full year. So I think by -- my internal assessment would be to at least INR 7 crores. And like I mentioned earlier, our covers on pre-COVID versus now, we still see an opportunity of 10%. So we have to go out in the market and capture that. Our delivery business is obviously not the -- not the best quarter for delivery. We have done better than this in the past also. So that is something that we'll try and regain. And the third is new initiatives that we're trying at some more outlets, right? So mix of all, at least on top line basis if we are INR 6.65 crores on average in the current quarter, my sense is, this should definitely be around INR 7 crores, that is what we should target.
Understood. Understood. So you don't think that there is any element of some revenge spending this quarter in the sense that people going out more often and with more frequency than they would normally were just because they are getting the chance for the first time after 2 years, that phenomenon is not there in the -- this quarter number, is it?
I don't think so. Look, because if you look at our last 5 quarters' numbers, I think they have always -- our recoveries on dine-in segment has always been very, very good, right? So I'm not seeing any exceptional performance on our dine-in business this quarter. From my perspective, we are still -- the number that we are tracking is, while we are still lower than -- lower by 10% from pre-COVID numbers and how do we get out that volume back. So that is a number that at least we are trying internally.
[Operator Instructions] We have next question from the line of Praful Siddharth with Shravas Capital.
Sir, am I audible?
Yes, Praful.
Yes. So my question is how are you planning to tackle competition from the likes of Absolute Barbecue? Because based on my understanding, customers look out for 2 things, one is low price, the second is the huge spread. So how are you planning to tackle this competition?
So the competition has always been there out of -- we would be around -- in India around [ 135 ] plus outlets. The [ deal we announced ] earlier, and we found that there are almost 100, 120, another similar formats copied the concept. This is not a new phenomenon. We have been seeing this for almost 10 years. I think one, we continue to focus on our guest experience and our varieties. And we are very happy with the performance that we have delivered over last so many years on a consistent basis despite being at such a high base. My sense is that this competition will keep on coming and going. And also this -- having seen so many businesses, I don't say any business where there is no competition, right? So nothing that really worries us in terms of competition.
Right.
[indiscernible] always in India.
Got it. Got it. So my next question is, so I just wanted to understand this biryani brand better, because biryani is something which is, it differs a lot from state to state. So how are you planning to like bring this biryani brand out to the market? Would it be like standardized or would it be customized from state to state? So how are you planning to go about this?
So Praful, as I said, this is in a very pilot stage. So there is nothing more that we can add right now, because still work in progress. There's something that we are launching in very select markets right now. And as we launch this, have the feedback, we'll keep updating the -- to the market appropriately.
Got it. Got it. Last question, is it possible to give us a measure on the employee attrition rate if that's really available with you?
No, so it is usual than -- is higher than the usual numbers that we used to do. I don't have the exact number right now for you. But that's one area where we have a, say, increased rate, and that's -- that's bigger in multiple in the hotel industry. During the COVID times, a lot of international hires, cruise lines, they were not hiring, those avenues have opened up for a lot of people. Then a lot of other new slowly and slightly more capacities are coming up. So as people are reopening their building of the teams, some people obviously are leaving. So right now, it's higher than what we used to do usually before COVID, but nothing alarming. So does it worry us, no. There is some [ higher side ], but definitely manageable. And that's the reason why we're also being able to hire more people and also open up the outlet that we're doing right now.
[Operator Instructions] We have next question from the line of Videesha Sheth with AMBIT Capital.
So I just wanted know what the peak of quantum of investment on the incremental acquisitions that you're making in Toscano and the international business?
So on Toscano business, we would invest approximately INR 7 crores, INR 7 crores to INR 8 crores. And international business, there's is a local partner in international business, the business -- the local business has to be partly owned by the local partner. There may -- there is some rule change wherein the foreign entities are not allowed to own 100% of the business, and we're trying to work with our local agencies to see where we can own it fully. There, I think the outflow is going to be typically [ more ], more on the value of something, but that still needs to be crystallized.
Okay. Okay. And what would be the current margins that our delivery business is generating?
Sorry, which business?
The delivery business.
So Videesha, like I said, earlier the delivery business, P&L, we don't make separately because it's all done from the same infrastructure, right, from the same outlets. So delivery business gross margin or -- is slightly lower. The food costs, packaging costs, delivery commissions all put together, we add up between 65% to 70%. And the balance cost is all actually fixed. So for example, rental employees, all of them are charged to the [ per claim unit ] as such, right, and not appropriated differently. But our math is that the margins are pretty much similar, which is around 20% to 22% on the delivery segment also. So that doesn't change because the higher -- the large portion of the delivery costs are actually billable.
We have next question from the line of Varun Pratap Singh with IDBI Capital.
Yes. Just wanted to check if we have taken any price hike during the -- during this quarter?
Yes. So we have taken around 4% to 5% price hike in the current quarter, which was actually taken in the month of April and May, spread across the 2 months, post that we've not taken any price hike. Sorry, when you said this quarter, you meant quarter 1, right?
Yes, yes, correct, correct.
Yes. So we mentioned about that in the previous call also that post that, we've not taken any price hike.
Okay, sure, sure. And sir, if you can give some color on the store that we have closed during the quarter?
So we have closed one outlet in a Tier 2 city, and then we also added one market in Tier 2 city, and that's why so that number came. So that outlet was doing low average sales in the month and was bleeding. We had mentioned in the past also with respect to this kind of market. And I think historically, we have not closed outlets, but today, the amount of bandwidth that it takes is just way too much. So that's why we decided to just move out of that market and enter into a new adjacent market.
Right. And sir, this would be Barbeque Nation restaurant only know?
Yes. Yes. It is Barbeque Nation.
Right. And sir, roughly, how old this store would be, sir? I mean 1 year, 2 year?
The one that we have closed?
Yes.
No, the one that we have closed would be around 3 years to 4 years old. So we opened up before COVID, and then there was obviously, COVID impact, and then post that now is like that it is -- it's taking the [indiscernible].
[Operator Instructions] We have next question from the line of Shrey Loonker with Motilal Oswal AMC.
Yes. Rahul, am I audible?
You are, sir. Please go ahead.
Yes.
So Rahul, just if you can just throw some light on the cash flow conversion for the quarter? That could be just helpful.
Yes. So during the quarter, we had a cash profits of approximately INR 40 crores. Our Ind AS EBITDA was around INR 46 crores or so. Out of that INR 40 crores, we have done incremental CapEx of around INR 37 crores, and [ people will ] make increase in our cash balance. Our net cash at the end of last quarter was around INR 63 crores -- on about INR 63 crores, around [ 85% ] are cash in books and [ 22% ] was net debt at no time. Today, that net cash has gone up from INR 63 crores to INR 66-odd crores. So incremental INR 3 crores.
And on the CapEx side, INR 37 crore CapEx that we have done, we have spent around INR 3 crores on maintenance CapEx and around INR 34 crores on new sites. The new sites include around 11 new restaurants and one new location that we have done on the existing innovation. So same site, that is we can have in the store. So this CapEx would be for around 12 outlets. So overall, that's the cash flow...
Sure. And as we speak, how are the inflation trends on our COGS?
So we have seen some decline in some of these prices. Also, like I said, this is a seasonally weak quarter from a needs perspective, right? So these prices are slightly better for us. We also are working with contracted vendors. So these contracts that we have long-term, they have -- mostly they will take this into account, right? But I'm not seeing any significant risk to our gross margin that we had reported in the same quarter and should continue at this level.
Sure. And just one question that the Dubai subsidiary that we are planning to acquire 51% for which you are saying the consideration is not yet frozen. But as we speak, is it consolidated line by line or is it treated as an associate?
No, it's consolidated line by line.
[Operator Instructions] As there are no further questions from the participants, I'd now like to hand the conference over to the management for closing comments. Over to you, sir.
Thank you, all. Thanks for joining the call. And if there are any further queries, we're always available. Thank you, and the team for organizing this. Thank you.
Thank you very much members of the management. Thank you, ladies and gentlemen, on behalf of AMBIT Capital, that concludes this conference. Thank you for joining with us. And you may now disconnect your lines.