SYMPHONY - A Comfort to hold for Long term?

(Utkarsh Patel) #141

Hi Ashwini & Krishna & others,

I agree with your assesments. As I have just started following this stock, I have a few questions.

Do u guys think there can be any additional kicker due to subsidiary contribution in Year end results as Mexico plant was operating at only 40% utilisation in FY13?

Company targeting 1000 cr sales by FY16, a bit too ambitious? If this materialises taking NP to 200 cr make it a steal at current price and make it more than a 20% story?

(JatinK) #142

Anyone has concall numbers???

(Ilyas) #143

Concall scheduled for 29/04/2014 @ 12 noon (IST) can be accessed by calling


(Krishna kumar) #144


subsidiary is doing good as per concall held, and the management expects the margin to improve. Subsidiary adds 60-70 crores to the total. Not expecting anything significant in the short term.

The management targets 100-130 crores in the next 5 years from IC which is <10 crores now. Also exports is a huge oppurtunity and targets 25-30% of the revenue from exports in the next few years.

The modern retail contributes 12% of the total stand alone revenue. Last year it was 38-40 crores and this year they are expecting 50% growth. If they can maintain the similar growth the revenue from modern retail alone can cross 125-140 in the next 2-3 years.

FY 16 target of 1000 crores may look aggressive, but a decent 25-30% CAGR for the next 2-3 years looks very much possible.

latest concall details updated in researchbytes:

(Utkarsh Patel) #145

Thanks Krishna, just went through the same.

For me the key takeaway was management analogy to the unorganised market of AC which was having market share of 70% earlier and is now NIL.Such distinction may not be possible here. But I think organised can capture upto 40% market share a decade down the line. With the growing market and market share expansion with a possible favorable tailwind of GST, opportunity looks interesting. In reply to your query, management reply of sales through modern retail at 12-14% of total domestic cooler looks interesting. I think inquiries here can be a good source of scuttlebutt.

Another interesting comment was “In short term window coolers, medium terms exports and long term centralised air cooler would be the driver.” Looks like they have a longer term vision.

The subsidiary being capital intensive & vertically integrated shouldn’t be much read into unless Symphony starts guzzling cash into it.

(Nikhil gupta) #146

Had a bit of a scuttlebutt opportunity in Mumbai; A colleague was trying to buy cooler here (not a traditional cooler market) and here were his findings:

)- Retailers rate Symphony and Usha to have higher make quality than Bajaj. Between Usha and Symphony, Symphony is less expensive and has a better product range.

)- However, inventory level with dealers was the main issue. He checked for Symphony coolers at four online retail stores (ezone, homeshop18, reliance digital, snapdeal) andthree big mall retailers (ezone, reliance digital, bigbazaar), and found that only snapdeal had the cooler in stock; rest were kept the coolers but were all ‘out of stock’.

As highlighted in teh conc call, Mumbai, despite being a non-traditional market, is still30% the size of the major market of delhi.

They mentioned in the call that they started off April with good dealer inventory levels and growth in organized retail shouldmirror growth in unorganized retail, but I think this fact needs to be checked a little further with a few more onground reviews for this quarter.

(Piyush) #147

Symphony Ltd on Tuesday launched Indiaâs first branded âwindow rangeâ of air coolers to strengthen its product range in the residential segment.

The new range of coolers is suitable for places experiencing long and harsh summer months. Those with plastic body are rust and shock proof and have all-weather composite plastic material made of specially engineered corrosion, heat and UV-resistant polymers which can withstand harsh weather conditions.Similarly, the corrosion-free metal body coolers are made of automotive steel with 4-stage powder coating rendering long life.

Air cooler market in India is estimated to be around Rs. 2,500-3,000 crore and growing at 15-20 per cent per annum.

Disc: Invested.

(Utkarsh Patel) #148

Just an observation:

While signing up for the hostel, various coolers were available for the students convenience.

The price range, after some discount,

  • local coolers were 3400-3900 with 1 year warranty,
  • Khaitan air coolers were priced at 9600 and
  • Portable Symphony Air coolers were priced at 11500.

The price differential between local brands and Symphony is huge to say the least, and Symphony even commanded 20% premium to Khaitan.

Some students who bought mostly went with local coolers due to price difference and since Symphony didn’t have window air coolers here, students didn’t want to cramp up the small room more.

Disc: Invested.

(Rohit Kotewale) #149

Thats because you have to stay in hostel for 1-2 yrs for MBA. Will you do the same if you are buying a cooler for your home when ur planning to use it for 5-7 yrs?

Answer will be No. Because you’ll have to spend a lot on maintenance & then the cooler might go off when you dearly need it. Then one will think had I bought a good branded one. This is why Symphony commands a premium over others

(Rupesh Tatiya) #150

I think, answer will depend on the region in which one is planning to use it for 5-7 yrs. Very hot and dry regions like central India - much bigger and powerful coolers are preferred, and they are cheap to buy, almost maintenance free and very effective, are used only during summers and dis-assembled (simple structure made from sheets) for the rest of year. Also, I believe it is this region which has a huge potential for sales, as for every house not using A/C, cooler is indispensable. The cooling effect is more effective with window coolers (helps evaporation of water by sucking in more air) and if used in a room during very hot summers say 43+ increases humidity.

But yes, for Tier 1 cities…I think such coolers don’t exist and I have seen only Symphony type coolers. So cooler size, model, brand are very local in nature.

(Krishna kumar) #151

Glimpse of Industrial cooler opportunity across the world for symphony.

(Video is in spanish)


Liverpool is mid-to-high largest chain of department stores in Mexico, operating 17 shopping malls including Perisur and Galeras Monterrey.



Ethan Allen Global, Inc. is a North American furniture chain with almost 300 stores across the United States, Canada and the United Kingdom.

(Kunal) #152

Monsoon seems to have run into a dry wall, with June this year being one of the driest since 1951, giving farmers and planners sleepless nights.

But while some are worried stiff, there are others who are looking at the bright side of a bad monsoon. There are several companies that are likely to register higher sales if monsoon deviates from its regular path.

Symphony fortunes are largely shaped by the weather.

Historically, the company has recorded higher sales during the scorching summer months. It is a market leader in the air- cooler space and enjoys a market share of nearly 40% in an organised market worth Rs 3,000 crore.

You can see runup in last few days.

Source :economictimes

(T Anil Kumar) #153

Note: I WILL NOT BUY Symphony at current prices.

Please find the link for Symphony file containing interesting extracts from last 7-8 years annual report and last 3 years transcripts, along with my short notesâ

For next 3-5 years, I think growth will be driven by residential coolers [exports could surprise positively]. In my opinion, industrial cooling will remain marginal for next 3-5 years. Secondly, there was some mention of aggressive guidance by management on the thread. After going through transcript of last three years, what I noticed was, post first two calls, management NEVER EVER GAVE GUIDANCE AGAIN. They always mentioned that their aim is to achieve 20-25% growth over medium term.

(Ashwini Damani) #154


In my opinion, companies which give guidance leave little scope for the investors. I would rather wait for results and get positively surprised.

Symphony, I am buying at every dip, it a hold for me for the next few years. The management has been delivering, and has learnt from past mistakes.

(T Anil Kumar) #155


I did not mean not giving guidance is NEGATIVE. Many folks told me company keep giving aggressive guidance and then fail to meet. So my point was regarding that.


Consolidated FY result out(Rs Crores)

Sales 532 vs 377 growth 38%

Net profit 105 vs 60 growth 75%

Dividend Rs11 diclared

Eps 30.22 vs 17.19

At current price of 1122 PE is 37 and forward PE of [email protected] 16 estimated EPS of 45.


Dharmesh patel

Disc. Hold 10% of portfolio

(Kunal) #157

Impressive growth in topline, bottomline. 75% growth in EPS YoY is outstanding.

(harshit) #158

how does symphoney look technically after forming new high and retracing back to 1200 levels?

(Ankit Gupta) #159

Symphony has come up with its AR for FY14 (July 1 â June30) and as expected it is one of the best ARs I have read this financial year (they have regularly won awards for the best ARs). It starts of with Achal Bakeri, the chairman and MD, recalling the old days when companies was in shambles and as the company states there was ârevenue invisibilityâ for its products. The promoters were even suggested to go back to their more predictable real estate development business (Bakeris is one of the biggest and one of the very few real estate companies of Ahmedabad which has most of its dealings in white). The company has laid out few rules which helped them to come out of bad times:

Trust your vision: When most people were suggesting that cooler is a down-market product, the company was convinced that there is a large market for its products.

Transform your handicap into opportunities: The asset light model that we relate with Symphony now was because of decision that was taken when the company was going through tough times. During that time, it decided to focus on just design and marketing of its product and outsourcing the manufacturing to moulders.

**The only rule is break all rules: **The company over the years did opposite of what the sceptics told them like introduction of wider range of air-coolers, introduction of AC like coolers and entering into central air cooling through acquisition of IMPCO.

I didnât notice it earlier but one of the board members, Satyen Kothari, has worked in the field of strategy and user experience with several companies like Apple, First Data Corp.

The company has also tried to answers some of the apprehensions faced by it like

**Air Coolers vs AC argument: **Better mobility, higher acquisition cost, higher cost of electricity. The company puts an argument that it is targeting 246 mn households using fan or no cooling products. Even rich people need to install air coolers at open spaces like garden and terraces. Symphonyâs air-cooler exports to developed markets has increased by more than 100% in 2013-14.

Capturing the share from unorganised players: The share of organised air coolers in total air cooling market is not more than 20% and going forward the organised sector is expected to capture the market share of unorganised players as seen in air conditioning industry. Organised sector grew by 25% in 2013-14 while the overall cooler market grew by 15%. GST is going to be the game changer for the organised players with unorganised players coming under the tax net. The companyâs promotional activities and brand spending has also helped it in better recall. The company has 23 models currently while the nearest competitor has 16. During 2013-14, the company derived 50% of its revenues from models launched in previous three years. The companyâs sales through modern retail formats has been increasing at a high rate and it now contributes close to 11% of companyâs total sales.

**Industrial Air Cooling: **The company seems to be very bullish on this segment and economic upturn is expected to increase its demand. A mere decline of 3 â 4 degrees centigrade can potentially enhance productivity by 25 â 30%. The productivity payback of industrial air cooling is estimated at a mere nine months. A single turnkey central air cooling products could be equivalent to several thousands of standalone residential air coolers. The company is targeting a sales of 1 billion from this segment over the next few years from 80 â 100 million currently.

IMPCO Acquisition (one of the shareholders had asked them about the rationale of acquiring IMPCO at the AGM; I was there when he asked this question): IMPCO has old relationships with modern retail stores in North and Latin America and through the acquisition the company has gained an entry into the market. IMPCOâs acquisition has helped the company in leveraging its knowledge in central cooling solutions and large residential coolers. The company has rolled out more than 300 installations in central cooling in India post IMPCOâs acquisition. The company is in the process of being enlisted for a DGS&D (need to probe them about this during AGM) rate contract.

Residential air-cooler market

The domestic market for residential-air coolers, both organised and unorganised, is around six million units with aggregate value of about Rs.20 billion. Northern and western India report 60% of overall sales while Southern and Estern India account for 20% each. Unorganised segment accounts for 80% of volume and 70% of value. The company offers intelligent features like dura pump, full-functin remote, feather touch digital control and other features. During 2013-14, the company launched the first branded window cooler in India. The company has tie up with most of the large retail chains. The company enjoyed a market share of around 40% and 50% in organised segment in terms of volume and value, respectively in 2013-14. The company charges a premium of 10-12% for its products. The penetration of air-coolers in India is low at about 9% compared to other consumer durables. The organised sector is expected to grow at >20% in the medium term.

Overall, the management sounded pretty confident about its growth prospects. The key questions that one needs to get an answer for during the AGM is the utilisation of cash of Rs.200 crore (may be they can increase their dividend payout further) and the opportunity for export markets.

(Disclosure: I hold the stock)

(Ashwini Damani) #160


Symphony has already declared few days back that they shall distribute 50% of profitts as dividend. Market may have not noticed that yet.I think its a good positive move.

Disclosure : Invested with almost 10% allocation