SYMPHONY - A Comfort to hold for Long term?

Hitesh Bhai…What in your opinion should be the most important thing to track for Symphony :

a. Sales, b. Margin, C. Subsidiary Performance

All three in the particular order listed by you… :slight_smile:

[quote="hitesh2710, post:100, topic:913550966"] > I dont know where you got your data from. > > but the all important npm is at around 19-20% since past 4 years. [/quote]

Hitesh,

I am sorry! Indeed that was fishy data, I got the data from Screener.in. Looks like some thing went wrong there (Excel Attached)! Now got the data from Moneycontrol and crosschecked with ICICIdirect


Operating Profit Margin(%)
Jun 13
25.08
Jun 12
25.50
Jun 11
27.61
Jun 10
28.40
Jun 09
29.90
Return On Capital Employed(%) 49.57 44.47 54.20 64.90 74.71

Net Profit Margin(%) 19.28 19.47 18.92 19.07 34.11

You are right to mention that NPM has been constant! Even with the new figures both OPM and ROCE have been shrinking. Any particular reason/pointers here?

Thanks! Vamsi

Symphony.xlsx (28.6 KB)

Thanks Nikhil for the no-so-good side of industrial water cooling.

http://waterlinecooling.com/default.htmlis a link of an industrial cooling company based out of south east Asia. The initial read makes me feel that the Industrial air coolers are custom and complicated solutions. They also seem to be mainly used for Industries (as against consumer stores like Big Bazaar). Given the kind of sophistication involved in the industrial coolers, it is easy to think that a poorly built system may not cut it - is that the problem with Big Bazaar implementation ?

The client list of Watercooling seems to be who’s who of corporate world: -http://www.waterlinecooling.com/2EvaporativeAirCoolerIntro.html

Water consumption does seem to be a challenge in a water scarce country like India - so, we may not be able to compare India with Singpore/Malaysia where the water availability could be plenty. A close one told it takes 40L water to cool their average sized bedroom for about 5-6 hours in Hyderabad. i.e. when running coolers the way they are meant to be run - keep the windows/doors open for cross ventilation & in a place with less RH.

If someone has friends in Singapore or Malaysia, can they do some scuttlebutt ? Or can post their first hand knowledge/feedback about Industrial coolers in India ?

Disc: Invested and may be looking for confirming evidence rather than contradicting evidence.

Another key thing is water cooling could be the only option for open-to-air factory spaces. So, it’s not a question of A/C versus Water cooling but a question of whether cooling is required or not. As the standard of life in India improves, is it a big stretch to think that our factories will offer a better environment to people ?

Automotive assembly line space from Watercooling: "Our customers in this segment to date includes Toyota, Honda, Ford & Mazda, Mercedes Benz for their assembly plants and Bridgestone, Good Year, Michelin, Bendix, Fukoku, Kulthon , Aisin and many others in the automotive parts segment.

Client list from Symphony: “Symphonyâs products have been endorsed by a number of corporate giants; namely, General Electric, Wal-Mart Stores, Lear Corporation, Jamarat Complex and more than 100 supermarkets in Mexico.Symphony has executed industrial air-cooling projects for the stores of retail majors like Wal-Mart, Sears and Home Depot in the Americas. In India, Symphony has done air-cooling projects for industrial units of Maruti, Nestle, Hero Group, Asahi Glass and many others.”

We are talking only factories…Think Wedding Halls, Conference Halls in Dry Climate Cities ??

Hi,

I may be naive in asking this question so apologies in advance.

As mentioned by Ashwini Air conditioning market is more than 2.5 times of air cooler market what makes market opportunity for Symphony big?

In big cities we see that many people opt for AC’s instead of coolers at home, offices and even at wedding halls and auditoriums. Not sure of small cities and villages.

Where do we see marker size and demand increasing for coolers?

Regards,

Sunil

See…Its not Big/Small Cities…Its Dry COnditions vs Humid Conditions which decides Cooler vs. AC.

For eg. in parts of UP and Rajasthan, there is not humidity and hence AC is not suitable, and hence cooler is required.Similarly in a humid city like Kolkata or Mumbai - Cooler is not fit (it may even cause medical problems).

So the opportunity is in Dry Weather locations.

If I remember right, either in the Annual Report of 2010 or 2011, Symphony has clearly given a map, stating their potential markets (based on weather conditions)

IC opportunity for Warehousing segment.

http://www.thehindubusinessline.com/industry-and-economy/warehousing-emerges-potential-market-for-air-cooling-biz/article5601753.ece

Logistics market including the warehousing segment is valued at around Rs 5.6 lakh crore (or Rs 5.6 trillion) in 2010. As per a report by PricewaterhouseCoopers the logistics industry is expected to grow at compounded annualised growth rate (CAGR) of over 8% over the next five years.

Achal Bakeri, CMD of Symphony Ltd said, "Excessive heat in a warehouse has negative effects on quality of stored goods and people working in the premises. Average ambient temperatures in the warm seasons are generally higher than have been experienced in the past. Places like warehouses are almost not possible to air-condition due to its high running cost. Hence, air cooling is the only viable solution for logistics industry".

Symphony)- Board to consider Interim Dividend

http://www.moneycontrol.com/stocks/stock_market/corp_notices.php?autono=757852

Seems, the company is doing all the right things now. With W.Cap/sales with meagre 13% and Reserves at 215 crores and with Zero debt, it is always better to increase the dividends thank piling the cash in the Balance sheet, unless there is any big ticket acquisition in the immediate future. I believe symphony has plans to go for inorganic growth too.

Symphony Limited has informed the Exchange regarding a Press Release titled “Symphony eyes to tap logistics and warehouse industry”.

http://www.moneycontrol.com/stocks/reports/symphony-limited-759109.html

Excellent results from symphony for q2 fy 14.

period sales NP

q2 fy 14 119 24

q2 fy 13 92 16

Half yearly eps at 11.18 per share and interim dividend of Rs 2 per share declared.

Half yearly statement shows non current investments of 93 cr Plus current investments of 90 cr plus cash and equivalents at 17 crores.

Full year eps figures should surpass 25 per share.

Excellent results by the company!!

I think non-current investment of 93 crore most probably relate to investment in long term debt funds only. Any one attending the con call please clarify the same.

Regards,

Ankit

Last two years quarterly revenue breakup of the company :

2011-12
Q1 Q2 Q3 Q4 Total
Units 58851 112060 157393 147469 475773
% of Total 12.3 23.5 33 31
Value(cr.) 26.82 53.12 77.33 85.89 243.16
% of Total 11 21.8 31.8 35.3
2012-13
Units 51145 155679 140599 169350 516773
% of Total 9.9 30.1 27.2 32.8
Value (cr.) 23.69 85.97 85.22 111.17 306.05
% of Total 7.7 28.1 27.8 36.3

In 2011-12, Co has done 32.8% of turnover in value terms in its first half compared to 35.8% in 2012-13.

Great set of results from Symphony!!!.

So, the dependence on seasonality is coming down through the years which gets reflected in the results, which is a very good sign. Earlier they were getting 10-15% of sales from H1 and the rest in H2. However the actual sales will happen in this H2 ( from dealers to consumers) and if all things fall in place including the IMPCO sales, exports, new segment(IC & Window coolers), better things are to come in the future.

http://www.moneycontrol.com/news/business/rupee-fall-new-models-pushed-net-profit-margin-symphony_1047559.html

http://www.moneycontrol.com/news/recommendations/buy-symphony-targetrs-650-motilal-oswal_1047568.html

Symphony eyes 50% revenue from exports over next five years

http://articles.economictimes.indiatimes.com/2014-02-23/news/47603713_1_70-per-cent-cent-rise-next-five-years

"stating that Symphony has been growing at a compound annual growth rate of 56 per cent in the last five years, Bakeri said, "We are confident of keeping the growth momentum and may clock 30 per cent CAGR after factoring in a one-two years of ups and downs in the market."

Motilal Oswal has initiated Coverage on Symphony on 21st Feb, 2014 with a price target of 650.

They have arrived at the value by assigning a PE of 15 to FY16E EPS.

May be that caused the run up in the shares today

here the motilal-oswal reco

Symphony hopes to expand margin by 2 per cent.

http://articles.economictimes.indiatimes.com/2014-02-25/news/47671006_1_export-sales-premium-products-ad-expenditure

The company plans to maintain volume growth of 30 per cent CAGR for the next five years, and with improving conditions in Mexico, export sales are expected to gradually pick up. Currently, its export sales contribute 16 per cent of sales, of which 30-35 per cent comes from Mexico. The Mexico plant is currently operating at 40 per cent capacity utilisation.