Last Updated: Wednesday, January 25, 2017

[Update] Stock Idea - “SRS Limited”

Know your Company: “SRS Limited”


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This post was initially posted on 12th Dec, 2015. 


unfortunately the stock declined significantly since then so before taking any action please take informed action after consulting your broker/SEBI certified experts as I am not a SEBI certified expert nor the purpose of this blog is to give buy/sell call, all the posts on this blog are for educational purposes and if any call is given it is the opinion of expert own and not of this blog.


About SRS Group;


“SRS” is a group of companies; “SRS” Group has a dynamic and diversified business portfolio, having a strong presence across in Gold & Jewellery, Commodities, Cinemas, Retail, Hospitality, Real Estate, Education and Health Care. The best part is that “SRS Group” symbolizes the new entrepreneurial spirit of India.

About “SRS Limited”:

“SRS Limited” is a diversified Company under “SRS” Group, its business portfolio comprising of;
  • Gold and Jewellery,
  • Cinema Exhibition,
  • Retail, Hotel and F&B.
“SRS Limited” was incorporated on
August 29, 2000 with the objective of trading in FMCG Goods and it later entered into other business segments. The four business verticals of the Company enable it to profitably exploit the business synergies, as well as, smoothen out seasonal business fluctuations. Its current MARKET CAP  is (RS CR) 603.13.

Read also; OMG! 90,000% Return on your Equity Investment in 10 years!

Major Area of operation of “SRS Limited”

Multi-bagger Stock Idea: “SRS Limited”
The core businesses of the “SRS Group”, carried out by its key group companies, include the following:



Jewellery: In this division, the “SRS Limited” is into wholesaling and retailing of jewellery. It sells a wide range of gold and diamond jewellery under the brand name of “SRS Jewells”. The product portfolio includes gold coins, necklaces, rings, pendants, bracelets, earrings, bangles etc. Skilled craftsmen are employed by the Company for manufacturing of jewellery pieces based on international and trendy designs. The jewellery is procured from the group's domestic manufacturing facility at Patparganj, New Delhi and through third parties. The Company at present has 10 retail showrooms at Delhi, Faridabad, Noida, Ghaziabad, Indrapuram and Palwal and 4 wholesale outlets at Delhi, Mumbai and Ahmedabad. The export operations are carried out through its 100% EOU at Noida SEZ. Dubai, Doha, US, UK, Hongkong, Singapore etc are the target markets for jewellery exports.
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Cinema Exhibition: “SRS Cinemas” is the film exhibition brand under which the Company operates a chain of multiplexes spread across 15 cities. This includes 20 properties at strategic locations with a combined strength of 57 screens and 14750 seats. It is a brand that is fast spreading its footprint across the major cities of North India.

Retail: The “SRS Group” operates a chain of retail stores under the brand name of “SRS Value Bazaar” that offer FMCG products including food and groceries, apparels, cosmetics / home care / personal care products, crockery, appliances, accessories, etc. “SRS Fashion Wear” is the other brand which retails multi-brand apparels. The Company has 45 retail stores in North India with a total floor space of more that 150000. sq. ft. 

Did you know full form of SRS? 

Expansion Plan of “SRS Limited”

Analysis and research



Key ratios;
  • MARKET CAP (RS CR):     603.13
  • P/E:                                       17.18
  • BOOK VALUE (RS) :         22.68
  • MARKET LOT:                     1
  • INDUSTRY P/E:                  45.38
  • EPS (TTM):                          1.26
  • P/C:                                       10.77
  • PRICE/BOOK:                      0.95
  • FACE VALUE (RS):             10.00


 “SRS Limited”- Shareholding patterns;

(in %)
Sep-15
Jun-15
Mar-15
Promoter
74.04
74.04
74.04
FII
--
0
0.02
DII
7.10
7.65
7.14
Others
18.86
18.31
18.80
Total
100.00
100.00
100.00


Bonus issue:            1:1
--
25 Jun 2015
RD 26/06/2015

Experts View on "SRS Ltd";

Technical view:

  • "SRS Ltd" is now trading above its 200 daily EMA and adjacent to its all time high of RS. 27/- beyond which a fresh break-out is anticipated.

Why “SRS Limited” is potential "Multibagger" Hidden Gem??

  • “SRS Limited” business model is pure consumption field. One can see its business as a combined business of 'PVR', 'PC Jewellers', and 'Future Retail'.
  • It is not a penny stock at all; Low trading price is a result of it being newly listed company and issue of bonus share in 1:1 ratio.
  • It is extremely bullish on the kind of user demand. 
  • It has a dynamic and diversified business portfolio
  • Economy recovery and Increasing disposable income of consumers helping “SRS Limited” tremendously on the input side. 
  • The market capital is not very large by Rs 600-620 plus crore is decent enough.
  • SRS is also a dividend & Bonus giving company.
  • Its Face Value is of  Rs. 10/-
  • Its current Earnings per share (EPS) is 1.26, and it is trading at 17.18 P/E While Industry PE 45.38 (Cinema Industry)
  • So “SRS Limited”  is something which is bit small for people to have notice earlier but belongs to a good pedigree. 
  • They have trebled their exposure now and the consumption side is actually impacting them now. 
  • "Smart City Plan" and salary hike in "7th pay commission" are also going to help it to be a potential "Multibagger"
[Update] SRS Ltd Q3 result out on February 09, 2016;


SRS Ltd has informed BSE about : 

1. Standalone Financial Results for the period ended December 31, 2015

2. Consolidated Financial Results for the period ended December 31, 2015

3. Standalone Limited Review for the period ended December 31, 2015

4. Consolidated Limited Review for the period ended December 31, 2015

Find detail Q3 result in pdf>>>
source: BSE

SRS shares closed at 15.95 on February 09, 2016 (NSE) and has given 2.90% returns over the last 6 months and 26.59% over the last 12 months.
Though numbers missed expectations, structural story remains intact. Long term investors having risk appetite, nothing to worry. Fresh investors seeking Multibagger opportunity in stock market may bet on SRS Ltd as at current price it appears attractive, downside is capped find good risk reward ratio here.

Latest update on SRS Ltd: 12/12/2016

According to media reports, Mexican filmmaker Cinepolis and the Kochi based cinema company Carnival Films Pvt. Ltd. are in separate talks with SRS Ltd to buy its cinema business. SRS cinemas operates 62 Screens in northern India, the stock of SRS ltd could see some upbeat action in the trade if it is executed.
The money received from the sale of the movie business will help the company to unload its huge debt which is the main issue of the company at the moment. SRS limited is relying heavily on its Jewellery business which accounts for its 85% revenue.

Latest update on SRS Ltd: 25/01/2017

Inox Leisure victorious bidder for the acquisition of SRS Cinemas

The multiplex company 'Inox Leisure' has offered close to Rs225 Crore for the SRS Cinemas acquisition, rivals Cinepolis also in fray.
Inox Leisure Ltd has emerged as the highest bidder for SRS Cinemas, the multiplex business of SRS Ltd, two people aware of the development under condition of anonymity. Inox has offered near Rs225 crore for the theater chain, one of the two aforementioned persons. The company is currently testing the assets of SRS Cinemas, which operates 62 multiplex screens across 22 cities in India and talks are at a fairly advanced stage, the second person said. The acquisition of SRS Cinemas will potentially accelerate a consolidation boom in the film exhibition industry, which has seen larger multiplex chains - PVR Ltd, Inox and Cinepolis - acquire smaller competitors, often with premium. For Inox, trading with SRS Cinemas will mark the fourth such acquisition. [Source: LiveMint]

SRS Ltd. is planning to sell its multiplex chain and retail business to reduce debt and has hired SBI Capital Markets to direct the sale. It should also be noted the principal revenue producing of the company is its Jewellery business which accounts for almost 90% of its revenue. Find clarification made by the company on BSE-pdf.
The SRS Group was founded in 1985 by Anil Jindal.
It was renamed as SRS Commercial Co. Ltd. in August 2000 and later SRS Entertainment Ltd. in January 2005. The group joined the multiplex business in 2004. It is listed as SRS Ltd. in 2011.
Over the years, SRS has diversified into other businesses, including consumer goods, jewelry and retail, all of which are under the SRS brand.


Shares of SRS Ltd closed today at Rs .6.35 up by 19.81% on NSE with record volume.

References:
http://www.srsparivar.com/srs%20limited/businesses.html
http://www.srsparivar.com/srs%20limited/index.html
http://www.moneycontrol.com/india/stockpricequote/media-entertainment/srs/S17

http://www.livemint.com/Companies/wy9nA7B8S0Ucz2pvAnVJGL/Inox-emerges-as-top-bidder-for-SRS-Cinemas-acquisition.html.

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14 comments:

  1. Great sir!!
    Nice post on hidden gems like SRS Ltd. Actually i was googling on SRS n other hidden gem multibaggers n found this nicely crafted article, I was thinking to invest in SRS ltd as my broker once said abt it but i was unable to find reason to invest in it. After reading your valuable post now i have plenty of reasons to invest.
    thnx you so much sir.

    ReplyDelete
  2. Thanks,
    Keep investing. Shares of Srs fallen due to recent market turmoil and panic selling only, fundamentals remains intact no need to worry.

    ReplyDelete
  3. Well can one invest Still at these low prices or is it a gone story.

    ReplyDelete
    Replies
    1. Yeah Sure you can buy/average if your time horizon is 3years n more. Pls write for further query.

      Delete
  4. sir. it has fallen more than 50% from recommended price.
    is it still a buy . is the story still intact??

    also provide your view on MBL infra.
    it has come down almost 60% of your recommended price.
    still is a a good buy.
    hope everything will be fine ...

    disc : i m holding both..
    pls share your view.

    ReplyDelete
  5. Buying.at this rate ....not a bad idea....73% promoter holding....whole current value is less than 200 crore...and remember one thing....its share market....anything may happen...just be a part of this happening...all the best....happy investing

    ReplyDelete
    Replies
    1. Hi Laxminarayan.
      Thanks for showing interest in my blog. I have just updated their plan of debt management and yes you rightly stated "its share market....anything may happen". Srs is among few multibagger stocks discussed under my blog that has disappointed me and followers till now. Hope this update will help the scrip to trade positively. I will be posting latest update and views on srs ltd till then happy investing.

      Delete
  6. It appears SRS ltd has been bottom out
    The only issue was its high debt-equity ratio but once SRS cinema is sold out it will be a debt free company and to my mind the deal is not going to be finalised in just 200-225 cr. remember DT cinema was acquired by PVR for 500 cr.(only 50 screens) while SRS Cinema is having 65 screens all over country. So you can smartly judge what I mean.
    The next thing I would like to add that the company is also going to sell its retail wing (according to Anil Jindal,MD). It will make company cash rich.

    Thanks for posting such a nice article. I hope your article on multibagger stock idea will help tons of online retail investors in India. The best part is that you kept all your advise free for all.
    Thank you so much sir.

    ReplyDelete
    Replies
    1. Hi Pooja,
      Thanks for showing interest in current post and giving your unbiased review. It's true that the the main issue of SRS ltd is it's huge debt and it is reflected in its share price too. You smartly calculated all things for what this post was. "To be normal in adverse situation" is key to life.
      Thanks for compliment :)

      Delete
  7. As per Screener, its debt is 700 cr, and the current cinema deal if valued at around 200-250 cr even then there would be debt on its BS. Hence, I am not sure how this deal is helping them to give good returns in coming future??
    Your inputs please....

    ReplyDelete
  8. Hey Puru,
    Thanks for sharing your view on current post!!!
    As to your query I do agree that SRS ltd is having liquidity issue at present and due to which we are able to see the stock price trading in single digit. Let’s consider its current debt being Rs.600 to 700 cr. Till sometime before they were not shareholder friendly and were not disclosing their views on debt management but recently they have broken the ice which is good for investors. As per their discloser they are ready to sell their business in three subsidiary companies; SRS Cinema, SRS retail and SRS Worldwide FZC.
    As to its cinema business please note the deal has not been finalized so 200-225 cr. deal by Inox should not be taken as final. We should keep in mind that most recent acquisition was made by PVR by acquiring DT cinema’s 32 Screens in 500 Cr and SRS Cinema is having 62 Screens as of now so I don’t think they will sell it in just 225 cr. We hope this deal will be bigger and if it is; the company will be almost debt free by its cinema business only.
    Further we can expect good deal from its retail wing and Sharjah, UAE based FZC business. In absence of any data we can’t valuate it right now but can assume only.
    So let me conclude; if the company succeeds in selling all the three business mentioned above it will not only be cash rich but also lead to value maximization of its shareholders.
    “Remember no share is good but the price you enter makes it good.”
    Please note further investing in such condition is riskier a bit so take your own decision before reacting on it. This post/reply is not a recommendation to buy the stock but are for educational and discussion purposes only.
    DISCLAIMER I am not an Investment advisor and do not provide this service via this Blog.

    I hope this will help you, Please feel free to contact me if you need any further information.

    ReplyDelete
  9. Track share holding pattern, it has decreased from 74.0% to 58% in one year. Any specific reason ?

    ReplyDelete
  10. The reason itself reflected in the stock price of the company. It is probably they knew the situation and once the company succeed in its debt management it they will start buying like anything. We should not take investment decision on Shareholding pattern only, no shareholding pattern is permanent.

    ReplyDelete