SRS Limited Assigned 'CRISIL BBB/FA-/Stable' to Bank Debt and FD Programme

DELHI, May 12, 2014 /PRNewswire/ --

Total Bank Loan Facilities Rated:  Rs. 8250 Million
Long Term Rating                :  CRISIL BBB/Stable (Assigned)
Rs. 1250 Million Fixed Deposits :  FA-/Stable (Assigned)

CRISIL has assigned its 'CRISIL BBB/FA-/Stable' rating to the bank facilities and fixed deposit programme of SRS Ltd (SRS). The rating reflects SRS's diversified product and services portfolio and above-average financial risk profile with minimal debt obligations. These rating strengths are partially offset by the company's low operating profitability in the highly fragmented and competitive gold jewellery industry, and its large working capital requirements with most debtors being on open credit basis in the domestic wholesale jewellery business.

Outlook: Stable 

CRISIL believes that SRS will continue to benefit from its diversified product and services portfolio and will maintain its above-average financial risk profile over the medium term. The outlook may be revised to 'Positive' if the company reports more-than-expected growth in margins with significant improvement in scale of operations in its cineplex and retail verticals, and improved debt protection metrics. Conversely, the outlook may be revised to 'Negative' if the group's debt protection metrics deteriorate because of lower-than-expected growth in revenue and margins, large debt-funded capital expenditure, or significant stretch in working capital cycle because of majority of the debtors being non-secured.

About the Company 

SRS, incorporated as SRS Commercial Company Ltd in 2000, got its present name in 2009. SRS operates in four business verticals: gems and jewellery (SRS Jewells brand), cinema exhibition (multiplexes under SRS Cinema brand), retail value chains (under SRS Value Bazaar and SRS Fashion Wear brands) and food and beverages (under SRS 7 Dayz, Asian Amigo, Punjabi Haandi, and Desi Cafe brands). SRS has been listed on the Bombay Stock Exchange and National Stock Exchange since September 2011 and is managed by Dr. Anil Jindal, a first-generation entrepreneur.

SRS reported a net profit and net sales of Rs. 0.33 billion and Rs. 28.88 billion, respectively, for 2012-13 (refers to financial year, April 1 to March 31), vis-Ã'''' - vis a net profit of Rs. 0.44 billion on net sales of Rs. 22.67 billion for 2011-12. For the nine months ended December 31, 2013, SRS reported a net profit of Rs. 0.21 billion on net sales of Rs. 24.12 billion, against a net profit of Rs. 0.27 billion on net sales of Rs.17.61 billion for the corresponding period of the previous year.

For more information visit www.SRSparivar.com.

Annexure 1 - Details of various bank facilities 

                Current facilities                                    Previous facilities
                       Amount                                               Amount
       Facility     (Rs.Million)   Rating                     Facility   (Rs.Million)  Rating

      Cash Credit       3500     CRISIL BBB/Stable               --           0          --
      Letter of Credit* 4750     CRISIL BBB/Stable               --           0          --
      Total             8250           --                      Total          0          --

* Contains Sub-limit of Cash credit of Rs. 4750 Million. 

Primary Media Contact: Manoj Sharma, Corporate Communications Manager, Clout Communications, 098-111-35420, [email protected]

Secondary Media Contact: Jyoti Parmar, Communications and Brand Management, CRISIL Limited, +91-22-3342-1835, [email protected]