SYMPHONY - A Comfort to hold for Long term?

(Rudra Chowdhury) #201

As per BSE notice, Symphony Ltd has informed BSE regarding Conference Call on August 13, 2015.

(kailasp4u) #202

Why Symphony is on fire despite subdued results? Acquisition MKE also needs to be turned around, which may take 2-3 years. Any news which is not publicly available? Or AGM details?

(c.t.sreenath) #203

MK has a focus on the industrial coolers segment. It has products for

  • Rubber , plastic,automobiles ,textiles industrial workplaces.
  • climate control systems for optimum growth and the development of poultry production, pig production, dairy production and greenhouse cultivation.

It doesn’t look like MK had a great success.Similar to symphony it is also in process of “educating” the industry people about advantages of its cooling systems . But its products patents, innovations may consolidate symphony’s industrial coolers segment. Will the industrial cooler segmemt grow big in the future? If it grows big symphony is all set capitalise on it .

Was hoping to add some today on expectation of a steep correction :smile: The MD interview and acquisition news turned it the other way. It still may correct once people realise MK acquisition is not going to create a impact immediately.


It is due to the Company Presentation where they have explained how the business is moving away from a single big quarter sales , brand and future prospects due to climate changes. China foray it opens up a huge market as they have past record of turning around Symphony drastically.

(mukul aggarwal) #205

Dear All,

Happy independence day to all.

Has anyone got the con call transcripts or AGM notes. It is really surprising to see the price run-up even after such bad results. I was actually waiting to invest after the price correction. Still looks pretty expensive.

Looks like the co. has tried to do everything (by releasing the report explaining the reasons) to prevent a steep price fall.


(Ankit Gupta) #206

Hi Mukul,

Symphony used to follow July 1 - June 30 financial year till FY15 (they have now changed it to April 1 - March 31 from FY16 onwards). The AGM date will be announced soon as they have just now declared the full year results. The concall voice transcript has already been uploaded on Resarchbytes. You can go through that for more details.

(mukul aggarwal) #207

Thank u so much for replying. Actually before posting here, I created an account on research bytes to listen to the con call but wasn’t able to start the audio. Looked again now and found the “play” button.



Warning - long post

This post is about IC (industrial cooling) opportunity. I have recently finalized IC for my apparel shop at the cost of about Rs. 20 lakh.

I initially approached for BLUE STAR for Central Air conditioing and they have given me installation budget of Rs. 50 lakh + 75 thousand / month electricity expenses.

IC cost about 20 lakh in installation and 18 / month electricity expenses.

Thus it gives tremendous advantage over AC and for any business, there is huge cost saving out of this.

This system is useful for low humidity area or dry area. Thus coastal region or where there is heavy monsoon, it is not much effective.

Applications - Shops, Malls, Marriage Halls, Restaurants, Factories ( TATA / BAJAJ and many more from Pune MIDC region has opted for this). Thus IC has a very big market.

While choosing system for my shop, I have spoken with various vendors and this is what I have learnt.

IC is further divided into 2 parts - machine and installation.

A machine is typically comprised of outer body, cooling pads, motor and a blower.

There are many machine providers such as Symphony, Breeze Air, DRI and local manufacturer.

SYmphony has attempted IC about 5 years back but they have been not very successful. Their initial machine were not up to mark and company failed to provide necessary support to dealers. Symphony does not produce electric motor (main component), they use 3rd party motors, either from CG or others.
So many dealers were reluctant to sell Symphony machine, even when they have Symphony dealership.

Symphony has now improved their machines and they have done many projects in Gujrat.

However in Maharashtra, they have not been able to crack the market. They have negligible presence and their dealer network needs a lot of fine tuning.

In such project, installation guy recommendation matters a lot. This is because he will be coming to your shop and going to do all the work. He will be doing maintenance, year after year. My installation guy, despite being Symphony dealer for 5 years, have asked to look for another company.

Conclusion - IC market opportunity are infinite. It’s true no one has yet cracked market and Symphony can easily ride this wave if they provide proper market support. But currently, they are lagging in this field.

(PP) #209

Deleted - as per mod request


I am not invested in Symphony.

The more I thought about this business model, the more it difficult it seems to scale up.

Let me elaborate.

Take example of website designing and Web hosting.

If you look at market potential, it is infinite.

But how many websites design firms were able to scale on a national level, but Web hosting companies were able to scale easily (godaddy. Com)

This is because, website development involves lots of customization and thus scale become difficult. ( i know there are many websites design templates available but they always need fine tuning and any large firm or serious customer won’t opt for readymade template / design).

I am comparing role of website developers with role of IC installation firm. Installation guy will be the one who will be coming to your shop / office, do all the installation and take care of maintenance. So his role become far more important than the machine I am using.

Now in case of Symphony, they are opting for asset light model.
The most critical part of machine, electrical motor as well as blower is being outsourced. Cooling pads are also being outsourced (as per my knowledge).
So only thing that remains is external body and assembly.
This can easily done by any fabrication unit or local assemblers.

In fact, one local manufacturer (from Amravati & nagpur region has more than 500 firms doing this ) has given me quotation of just 6 lakh for same project.

So unless, they position themselves differently, they always will be mercy of the installation guy ( person whose recommendation matters the most).

Just imagine, when you want to create a website, how much importance you will give to brand of webhosting firm as compared overall website design and user interface.

So, thus even when market is such huge, I don’t think any one player will be able to dominate it.

I have worked in a website design firm, so I have given example for that.

(Raj Panda) #211

That’s a very good input Nikhil. Makes us rethink the whole thesis on industrial cooling opportunity.

However, I was also thinking from this angle.
Assume if a potential customer is a player of some scale having stores in multiple cities/states etc…
Like common examples one can think of are say retail chains, banks etc…where they also want’s to give customers the same level of comfort and experience across stores.
In such cases the option of going to local vendor in each city/state is hardly a good option given the hassle involved. So probably those still remain a good potential customer base ?



IC requires good ventilation, door and Windows must be open in order to desired effect.

In case of banks, security will be a major concern. So like shop or factory, their won’t be much open area.

Also, I have seen most of bank use air conditioning. This is probably because option of adjustment for room temperature is not available (this is major drawback of IC).

Aa far as local vendors is considered, bank use local vendors either to build relationships / get faster service / too much paperwork if ordered from central office.

Eg. Last year, SBI manager visited our shop and gave us order of approximately Rs 70k for bank window curtain and office boy uniform.
At the same time, he casually mentioned that we should open a bank account with them. He also bought a account opening form with him.

Eg. Local BOI office purchased all furniture for their new branch from my cousin shop. This is because they wanted a certain preference in term of color, which won’t be available if they ordered it from central office.

Coming back to topic, in most of cases local vendors are preferred because ducting and machine installation, usually takes 3 weeks or more. So it is difficult for a vendor from Mumbai to go to hyderabad and do installation. ( in this case, his entire team has to stay in hyderabad, there will be eating and language problem). Also, from service point of view, closest vendor will always give faster service.

(Ishank) #213

Air coolers and industrial cooling is not advisable where computers are used, as humidity of coolers is not good for computers. These are therefore more suited for large halls, temples, prayer halls, open air areas, shop floors that do not use computer-assisted machines (nowaday most machines are like that). I don’t know whether a computer used for billing in shops can withstand constant humidity.

(vinay ambekar) #214

Looks like Symphony’s PR division is in over drive. One is to put out the information in all channels / newspapers / websites etc. and the other is to compile all of them and post to the stock exchanges. Looks like an whole-hog effort to advertise their acquisition (which co-incidentally was timed with their poor Q4 results announcement) and maybe defend the share price?

Had I not been a long term shareholder (> 3 years now) I would have been extremely extremely skeptical of such moves by the management. But considering their past track record of performance (both management and financial) and of transparency, I am willing to cut them some slack and see all this as part of their transparency enhancement efforts. Although they have definitely gone overboard this time.

I did like their Q4 presentation and looking forward to the annual report. The FY14 annual report was a classic and a must read.

Discl - invested long term, may add more on dips.

(c.t.sreenath) #215

The MKE deal size - Rs 1.5 crore INR is puzzling.

Who sells a company with 80 intellectual property rights(including 51 patents) , a debt free status, 50+ cr turnover a year, a innovation pipeline ALL for small change ??

Some houses and cars are more expensive than that. What would be the reason for such a bizzare valuation? Why MKE couldn’t find a better price ?

(Akbar Khan) #216

@Lynchfan There is around 35 Cr of debt repayment as well.

(c.t.sreenath) #217

Thanks . Got it now

Debt repayment - 35 cr
Immediate Cash infusion needed - 15cr

Total - 50cr + 1.5cr


@MKE deal @Lynchfan

company with 80 intellectual property rights(including 51 patents) , a debt free status, 50+ cr turnover a year, a innovation pipeline ALL for small change ??

This is just PR and nothing else.

MKE machine are just copy Chinese copy of Breeze air machines. There’s no innovative pipeline. They are just another Chinese copycat like many more in market.

Symphony by acquiring MKE will get all existing customers of MKE.
According to my IC vendor who’s both Symphony and MKE official dealer, Symphony will treat MKE as a subsidiary, will replace existing dealer network and directly approach market.

This is market leader and main supplier to Indian companies. They also sell via Their machines on cost around Rs 60k while Indian companies sell same (doing rebranding) for around 100 - 120k.

He said anyone can start a company by importing machine from them and putting their logo on them.

According to him, there are at least 20 companies in Maharashtra who import cooler from JHCOOL under their own brand name.

So he said he won’t give much attention to MKE acquisition.

(c.t.sreenath) #219

I agree. The PR overkill has been appalling.
In good times too Symphony has played to the crowd with interviews on 40% growth , but trying to shore up the stock price in a bad quarter shows it in poor light.

Thanks for sharing your inputs on IC at the ground level. I was unaware of the intense competion present in the segment. Its often portrayed as a sunrise industry with very few players in the mix.

Its good to see that symphony is sticking to its asset light model even in the IC segment . But how it would gain market share on the ground level remains to be seen.

Hope their IC sales team is as “innovative” as the PR team.


IC is no doubt sunrise industry. It has tremendous potential. Please check attached file, it shows advantage of IC over traditional AC.

My vendor was telling me that even premium automobile showroom like Land Rover are considering using IC as it has tremendous cost savings.

He said there are least 10 big agency in his town and all have work full for next year. So there’s no shortage of work.

Areas where IC are used prominently - textile park, automobile showroom, factory of almost of types (he has personally installed in pharma, wine, electronic & auto factory), marriage halls, hospitals, theater (PVR, E-square), shopping malls (Phoenix malls, big Bazaar, D-mart),

So, potential opportunities are unlimited.

Now, coming back to Symphony and it’s asset light model.
This is where the problem begin.

As I said, most important part of machine is the motor that drives it. And Symphony like every other players (other than Breeze Air) are using 3rd party motor (Siemens / CG / ABB / others).

Now when you buy Toyota or BMW or any premium car, you know that motor inside that car has been designed and tested by manufacturer. Toyota or even bajaj, May outsource other activities but they will never outsource core of the system, ie motor in the vehicle.

Now, if I (customer) knows that motor and blowers are easily available in market and they are not made by Symphony, then why I should pay premium for Symphony brand?

I can easily assemble a machine by purchasing motor, blowers and cooling pads myself and subcontractoring it to any good fabricators for outer body and assembly.
In this case, I don’t need to pay any VAT(most vendor accept cash, so need of invoice) , so I also make cost savings.

This is exactly what local players are doing. A local vendors from Amravati is doing very good business (more than 500+ projects done) solely on this premises. In his presentation, he always asks why pay premium for brand name when you are getting exact same configuration at almost half the cost.

This is almost similar to what XIAOMI or ONE Plus ONE are doing.
They are offering similar configuration of flagship devices at half the price.

So unless, Symphony address this issue, they won’t be able to capture more market share.