SreeLeathers Limited


(Ashwini Damani) #47

The Barasat one…It became fully operational Around Puja’s.

Another store in being made in popular Gariahat Area of Kolkata.

meanwhile a news snippet, which is just for information (no inferences)


(Gothamcapital) #48

THe price to sales is very high around 5 times.It is quite expensive.


(ffaizan) #49

Good set of numbers sales for Q4 up 27% YoY and PAT up 50% YoY.

For full year sales up 40% and PAT up 40% approx.


(Ashwini Damani) #50

The biggest store on Lindsay Street, doesnt even belong to the listed company…


(Nikhil Goyal) #51

I have been trying to understand the business model for Sreeleathers.

One of the things that I have understood is that they buy from local manufacturers, and sell it as a one-stop-shop for leather. To scale up their business, they started handing out franchisees, and building their footprint across the nation.

While the story looks convincing from setting retail stores, it put forward following challenges:

  1. How will the procurement methodology change? With current local producers, either the number of producers need to increase, leading to higher cost of quality check, or the local producers would need to invest in production units, which will lead to increase in costs from existing vendors?

  2. Will local producers be willing to invest in specific assets, on assurance of Sreeleathers? Can it backfire with increase in inventory costs?

It does look like that strategy needs to change on procurement side, i have tried looking for it at multiple sources, but couldnt find if this is being seen as an area of challenge. If any of you have any idea, do post.

Thank You
@akash_1cr and Nikhil


(Ashwini Damani) #52

Sir…

We went to the biggest store of Sreelathers on Lindsay Street… There was a huge crowd…Everything was good. We also went ahead and bought some stuff. The bill came and thats when I realised. By looking at the GST Number, I was aghast. It belonged to a Partnership Firm. (GST Number is a combination of PAN Number + Other Digits- The 5 Letter of a Pan number denotes what is the nature of entity to which the PAN belongs. In this case the fifth letter was F)

For Individuals it is P, for companies it is C, for HUF it is H. Partnership Firms are denoted by F… The biggest store of Sreeleathers is housed in a Firm and is not part of listed company


(Donald Francis) #53

Thanks Ashwini for the important scuttlebutt!!
Yes, we should keep striving to establish details of company owned stores, to get a better grip on the sources of growth and the quality of growth exhibited by the company.


(Brijesh Mahawar) #54

As per my understanding even the Delhi showroom is not in the listed entity.


(Anand Bhushan) #55

Hey Ashwini please let us know the complete pan number…as it should be 4th letter instead of 5th letter mentioned by you.


(rajeshaaidu) #56

Hi,
I think management integrity and hunger both are above doubtful. They are not having any bussiness plan or management.

2 years back I have contacted them for opening a frenchisee store. Their people have called me to kolkata, but when I have gone there to meet them- their marketing manager kept on making stupid type of excuses; finaly, I got frustrated and left them. In retrospect I understood that since I have written a mail he was forced to reply me, but when I reached there he kept on making various type of stupid excuses.
Then I have enqired with some of my friends in Kolkata and they have told similar type of stories. When I have asked them but why they use to behave like that? I got a reply that their managers don’t want to expand because their work and targets will increase. After that I have got atleast 3 people in 2 year time who told me same thing.

No doubt, their products are in good demand. Low cost competitive advantage. But, from investment point of view- it is a big- NO! Atleast till the time promoter are changing and which is a least likely event.
Disclosure: Not invested and not interested.


(Ayush Mittal) #57

Interesting announcement by the company - https://www.bseindia.com/xml-data/corpfiling/AttachLive/0fac1b7f-69d7-417d-9ced-504460440c9b.pdf

They are selling some property they had for 15.5 Cr. Negative - sale is being done to related party


(Yogansh) #58

Hi All,

Sharing my notes from AR18.

Regards,
Yogansh Jeswani
Disclosure: Invested


(Kumar Saurabh) #59

So far I knew, this was a north based company (Bihar, WB etc.). Recently, I was in Chennai for VISA interview and saw various hoardings with ads of sreeleather. Later on came back and checked, they do have stores in chennai. Not sure if they are in south from a long time or they are expanding in soouth. Any idea?


(phreak) #60

@suru27


(raajpallav) #61

They were in chennai for a long time in T-nagar. Recently opening store in pursaiwakkam. Product wise its good and i bought a slipper 2 years back it lasted for the price. They have good variety of chappals in 200-500 range which is good for chennai market(south india). Also they have a good crowd when ever i cross through their shop…


(kanvgarg123) #62

Any reason why aren’t they giving any dividends despite so much cash flow and what happened to the buyback? I think 6 months must be over by now?
I held it for a year and sold it recently because I couldn’t understand the logic of not giving dividends and their investor relations not replying to any query. I even tried calling them many times.

Regards
Kanv


(gsramesh) #63

recently they have opened franchised based in Bangalore


#64

The company recently sold a prime real estate(building) on rashbehari avenue,kolkata to promoter entity for 15crs. This building is ground plus 4 floors and was recently renovated at listed companies expense. the ground floor is fully renovated & ready to be stocked with merchandise and could have added to the listed companies revenue however now this store will contribute to the promoters personal wealth. Company incurred 3.5 crs odd expense in renovation and promoter paid 15 crs , so net net a property which is atleast worth 50cr(very conservatively) was acquired by promoter for 11.5crs.

The chennai and bangalore stores are not owned/franchised by the listed entity.

The CFO , CS were not in a position to ascertain how many stores are in the listed companies domain.

The promoter should rename the company from Sreeleathers to SREE420 ltd.


(ASG) #65

Mustafa, Thanks for your in-depth research… What is the source of this information?


(Sudheendra) #66

Hi

Tried to plot the Earning Power Box (EPB)for this company by arriving at Defensive EPS (relates to Free Cash Flow) and Enterprising EPS (relates to Economic Value Added) as explained by Hewitt Heiserman Jr in his book Its Earnings That Count.

An interesting trend is being seen with defensive EPS being positive for most of the years with an increasing trend and the Enterprising EPS being negative for all years but showing very good improving trend and moving closer to becoming positive. As per the EPB framework when the companies start moving into EPB Box (Upper right box) in the Earning Power Chart (attached) they start generating a lot value for the investors especially if they sustain and even grow within the Earning power Box for many years. In the case of Sreeleathers, if this trend continues then shortly the company can move into the Earning Power Box indicating a good turnaround in waiting.

image image

No holdings yet.

Br, Sudheendra