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Symphony Ltd. yet again reported stellar set of numbers for Q1FY15 (June ended company). Revenues grew by 45% YoY while EBITDA and PAT catapulted to INR 31 cr and INR 21 cr, respectively. Symphony has done exceedingly well in the lag quarter on the sales front due to delayed monsoon, with volumes recording a 38% YoY increase. For Symphony, Q3 and Q4 are strong quarters due to change in weather conditions. The company currently commands a leadership position in the domestic air cooler industry and sees a huge growth potential - both in the domestic as well as international air-cooling markets. Going forward, the company plans to increase its presence in the international air-cooling markets and the domestic industrial cooling segment. We are bullish on Symphony’s long-term growth story.
Revenues grow 45%, EBITDA and PAT soar 73% and 46%, respectively
Symphony has reported a strong set of numbers for Q1FY15. Revenues grew by 45% YoY to INR 110 cr, primarily on the back of a robust domestic market. EBITDA and PAT catapulted to INR 31 cr and INR 21 cr, respectively, growing YoY at 73% and 46%, respectively. This quarter witnessed an increase in sales volume by 38% YoY. Symphony undertook a price hike of 2-8% varying across various models.
Domestic sales grew by 42% at INR 95.6 cr. Delayed monsoons which led to an extended summer contributed to Symphony’s increased sales in the quarter which otherwise is a lag quarter for air cooler industry. Symphony has reported strong demand of new models i.e. Window 41 XL, Siesta 70, Window 70 XL and Ice Cube XL as well as succeeded in breaking seasonality at dealer levels which aided in boosting domestic sales.
Exports recorded 38% growth and stood at INR 7.3 cr. The company received an order for USD1mn other than Impco for plastic-body residential air coolers which aided its volume growth. Going ahead, exports are expected to increase their share of contribution to the company’s revenues.
Strong long-term growth drivers in place
The Indian air cooler industry size by volume is estimated at 0.6 crore units. ~25mn households own air coolers in comparison to 45% households who own have fans and 35% households which do not have any cooling appliances. The organized sector accounts for ~18% of the total industry, which has grown from the ~15% share five years ago. We expect organised sector to record a growth of 20-25% going ahead. We anticipate share of the organized sector to expand further given the growing aspirations besides the impending shift in favor of branded / quality products supported by implementation of GST; positively impacting Symphony’s financials. The company’s air-coolers are low on energy intensity and high on affordability in comparison to air-conditioners (A-Cs). Symphony - with its leadership position is well placed to capture long-term growth potential. The Industrial cooling market is currently at INR 2500 cr and is another segment where Symphony, already a strong brand, could gain 4-5% market share in the next 3-4 years.
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