Symphony Q1 Results Review - Air-Cooling Business To Register Growth Despite Weak Quarter: Yes Securities

Yes Securities Report

Symphony Ltd. reported mixed set of performance with revenue largely coming in line with the expectations, while margin missing the estimates.

Domestic business has seen decline on back of erratic weather resulted in demand slowdown. Gross margins have seen expansion on back of price hikes, value engineering and softening of commodity prices, however higher gross margin has not translated into Ebitda as certain costs like rental and travelling costs have seen increased and there is forex loss of Rs 30 million.

Symphony is seeing strong off-season collection and is expecting growth in domestic as well as international geographies in FY24 despite subdued Q1.

The company has gained ~300 basis points market share in the domestic business taking its share to 53%. Entry into adjacent product categories of tower fans will give further fillip to the revenue growth.

Management has strategy in place to turnaround its international subsidiaries and improve its performance in next few years.

We currently maintain our 'ADD' rating on the stock with revised target price of Rs 1,029 considering improved performance of subsidiaries and likely growth in domestic market despite weak Q1.

We continue to value the company at 40 times on FY25 earnings.

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