SRS Limited - A diversified Company

Stock Opportunities
1

I am new here. I like to know the process of researching on Small cap stocks where much lesser information is available in public domain.

My process -

Low PE - PE of such stock should be low, say 8 - 15.
Debt - Low, Debt/Equity : < 1
Promoter Holding > 50% , as the news about the promoter may not be available adequately.
Sales - Should increase in past 3 yrs.
Profitable company.
Trendy business sector. I will restrict my search to manufacturing, consumer, retail, aviation, beverages etc trending sector and not in Metals, Oil exploration ctc.

In these parameter I have selected the following stock -

SRS Ltd.
(copied from Screener)
PEG Ratio: 2.17
Return on equity 5years growth: 24.50%
Return on equity: 6.35%
Debt: ₹ 602.07 Cr
.Debt to equity: 0.96
ROCE3yr avg: 8.83%Profit growth: -40.17%
Promoter holding: 74.04% Unpledged promoter holding: 74.04%
Investments: ₹ 2.73 Cr
.Return on cpital employed: 9.95%
EPS: ₹ 1.26

Now the business-
(copied from company website)

SRS Limited is a diversified Company with a business portfolio comprising of Gold and Jewellery (retailing, wholesaling, manufacturing), Cinema Exhibition, Retail, Hotel and F&B. The Company 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.

They have crossed 4000cr of business this year.

Kindly comment on the stock as 2-3 year holding.

I am holding an test amount of 300 shares only.

Regards.

2

Requesting you to either change the title of your post to reflect the name of company you want to discuss or move thread to Q/A section.

3

Hi Deb,

SRS is a faridabad based company and I am living in faridabad from last 2.5 decades.
Few red flags regarding management and business are:

  1. They are not share holder friendly and have many businesses and transactions being done off books
  2. Their main business is to take money on
    ~2%/month loan from small investors (Similar to Sahara) and invest them in various diverse businesses, however all this without paying tax since majority transactions happen in cash.
  3. They are currently going through really bad times, since their kinda ponzi scheme is not getting new funds and hence returns to existing investors have not been provided, loosing trust in market.

Hence I would recommend due diligence before investing in this company.

3 Likes
4

Totally agree with @vikskukreja…as i too live in faridabad ,where this company is situated… A big avoid.

I am not invested.

1 Like
5

Thanks Vikash ji and Akaash ji,

I was in serious need of these information about the company as I was about to invest a large sum in this stock.
I will sell my 300 shares on Monday.
Thanks VP and Vikash ji and Akaash ji.
Regards.

6

@vikskukreja and @akaashbansal,

Thanks a lot for your feedback. Real, on ground feedback/scuttlebutt like this makes this forum a great help for the investor community. There are many fraudulent companies in India who are taking minority shareholders for a ride. If this forum develops network of investors geographically located all over India, their feedback would act a great cross check about validity of any claims made by the company.

I have joined this forum after reading some very factual feedback provided by some valuepickrs. There are many forums propagating hidden agenda of different individuals/managements but I feel this forum allows genuine investors to share their opinions and help each other invest smartly.

1 Like