Key Rating Drivers- Strengths

• Extensive experience of promoters: The promoters, the Motiani family — have experience of more than 30 years in the IT components trading business. The management entered the business of renting out IT equipment in 2007 and has developed a strong position in the industry, catering to over 350 clients across India. This is reflected in SRSL’s growing scale of operations with revenue rising to Rs 102 crore in fiscal 2025 from Rs 14 crore in fiscal 2021. Furthermore, the company has commenced trading in hardware and software IT equipment, yielding incremental revenue. SRSL’s business profile will remain supported by the promoters’ industry experience.

• Healthy operating profitability: While the operating margin moderated in fiscals 2024 and 2025 due to trading sales, it continues to remain healthy at 45% in fiscal 2025. While the revenue contribution of the trading business is expected to increase going forward, the operating margin should continue to range at healthy levels of 40-45% over the medium term, as the higher-margin rental business will continue to account for 60-65% of the total sales.
• Comfortable financial risk profile: The capital structure has been healthy due to limited reliance on external funds. Networth rose to Rs 101 crore as on March 31, 2025, from Rs 63 crore a year ago due to accretion to reserve and preferential allotment. The gearing and total outside liabilities to adjusted networth ratio stood at 0.05 time and 0.15 time as on March 31, 2025 (0.09 and 0.22 time, respectively, a year ago). Debt protection metrics have also been robust, as indicated by interest coverage and net cash accrual to total debt ratio of 66 times and 8.2 times, respectively, for fiscal 2025. Furthermore, the company has prepaid its term debt. In the absence of any large debt-funded capital expenditure (capex) plan, the financial risk profile should remain healthy over the medium term backed by steady accretion to reserve.

Key Financial Indicators

Annexure - Details of Instrument(s)

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