Symphony: Ultra Cool Numbers

Symphony caters to the domestic and industrial segments for a wide range of water coolers. It has manufacturing facilities in India and Mexico and has a presence in around 60 countries. Over the last five years, it has witnessed a CAGR of 49.40% in its consolidated operating income. It has also aced at maintaining margins and improving efficiency. CAGR of the operating profit and net profit over the last five years is 78% and 89% respectively.

The growth momentum has not halted when results of Q3FY13 are analysed. The company saw strong volumes in the quarter. The total units sold in Q3FY13 were 155679 as compared to 112060 in Q3FY12, marking a growth of 38.93%. Although the overall sales volumes have been robust, it saw a massive decline in international sales. In Q3FY13, volumes came down to 6728 from 29330 in Q3FY12. But this has been largely offset, in fact reversed, due to a growth of 80% in domestic volumes thus resulting in impressive financials. Revenues in the same period grew by 56% to Rs 87.67 crore. The net profit of Symphony rose by 48% to Rs 16.73 crore.

Symphony’s performance has been boosted by new product launches. Lately, it launched six new models that included various technologies such as water tank alarm, memory storage and remote control. Looking at the future, it plans to increase the dealer network from 14000 to 20000 by June 2013. At the same time, it is looking at exploring new countries to boost exports. It launched its industrial cooling products in Africa and Columbia recently and is now looking at Russia for prospective sales. On the domestic front, it has tied up with large corporates and HVAC consultants to boost sales.

Going forward, we expect the next two quarters to be strong as sales volumes for air coolers are directly linked to the summer season. Moreover, expansion in the product range, distribution channel and geographic presence is expected to further drive growth. We are, thus, bullish on the stock.