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SR Jungle Resortes Private Limited (Erstwhile SR Jungle Resort) was incorporated in 2017 by Mr. Santhosh and Mrs. S. Motchapriya as a partnership firm. It was later converted into a private limited company in 2023. The company is in the business of managing resorts, with experienced promoters in the hospitality industry. The promoters are well-qualified in the management sector and have been experienced in the field of resorts and various other types of businesses for the past decade. Acuité believes that SRJRPL will continue to benefit from its experienced management and established track record of operations.
- Significant improvement in operating revenue and location advantage
The company witnessed a significant improvement in its operating revenue, marked by a year-on-year growth of 31.68 percent in FY 2024, which stood at Rs. 52.96 Cr. in FY 2024 as against Rs. 40.22 Cr. in FY 2023. This significant improvement in revenues is due to the addition of rooms, an year-on-year increase in ARR, and additional revenue from food and beverages, as well as activities like rides, games for kids, and adventure games. Furthermore, the company achieved revenues of Rs. 54.05 Cr. in 11MFY2025. The operating profit margin stood in the range of 30.66 to 46.66 percent in the last two years ending FY 2024. The company enjoys a competitive advantage over other hotels due to its location on the outskirts of the city, making it an ideal destination for holidays, corporate meetings, and conferences. Spread over 8 acres of terrain in the Western Ghats, the resort is situated approximately 40 km from the airport and 28 km from the Coimbatore Railway Station. Acuité believes that going forward, the operating income and profitability of the company will improve in the near term due to healthy bookings with strategic location and other related activities.??????
- Moderate financial risk profile
The financial risk profile of the company is moderate, marked by moderate net worth, debt protection metrics, and low gearing. The net worth of the company stood at Rs.62.44 Cr. and Rs.45.96 Cr. as on March 31, 2024, and 2023 respectively. The improvement in the net worth is on account of accretion of reserves and equity infusion of Rs. 4.04 Cr. in FY2024. The gearing of the company improved and stood at 0.75 times as on March 31, 2024, against 1.21 times as on March 31, 2023. The improvement in the gearing is on account of the reduction in debt-levels. Debt protection metrics – Interest coverage ratio and debt service coverage ratio stood at 3.45 times and 4.10 times as on March 31, 2024, respectively as against 1.32 times and 1.40 times as on March 31, 2023, respectively. TOL/TNW (Total outside liabilities/Total net worth) stood at 0.77 times and 1.31 times as on March 31, 2024, and 2023 respectively. The debt to EBITDA of the company stood at 2.90 times as on March 31, 2024, as against 2.99 times as on March 31, 2023. Acuite believes that the financial risk position of SRJPL will improve over the medium term.
- Moderate working capital management
SRJRPL’s working capital operations are moderately efficient, as reflected in its gross current assets (GCA) of 66 days in FY2024, compared to 40 days in FY2023. The deterioration in GCA days is due to an increase in debtor days in FY2024 which stood at 58 days in FY2024, compared to 4 days in FY2023. During February and March, there was a high volume of bookings from corporates, which translated to higher receivables towards the year end. Furthermore, the reliance on bank limit utilization stood at approximately 88 percent for the fund-based limits for the past ten months ending in February 2025. Acuité believes that the working capital operations of the company will remain at similar levels over the medium term due to the nature of the industry.
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- Concentration risk associated with operating a single-location property
The company’s entire revenue stream is dependent on the performance and attractiveness of this one location and one property. This reliance is exposed to substantial financial risk due to various factors that could negatively impact the area. Additionally, increased competition or shifts in tourism trends could lead to a decline in customer visits. This concentration risk not only affects financial stability but also limits the ability to diversify income sources. To mitigate this risk, it is crucial to explore opportunities for geographic diversification, such as expanding to additional locations or developing partnerships with other properties in different regions.
- Highly competitive industry
The Indian subcontinent with vast opportunities and potential for high growth has become the focus area of major international chains. Several of these chains have been established and others have their plans to establish hotels to take advantage of these opportunities. These entrants are expected to intensify the competitive environment. Acuité believes the success of the company will be dependent upon its ability to compete in areas such as room rates, quality of accommodation, service level and convenience of location and also the quality and scope of other amenities, including food and beverage facilities.
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