3rd Quarter Analysis Report: Symphony Ltd. (SELL; Estimated Price: Rs. 1853)

3^rd Quarter Analysis Report: Symphony Ltd. (SELL; Estimated Price: Rs. 1853)

In March 2015 quarter, volume growth has been about 13% with 213,000 coolers sold which is lower than the sales in March 2014 on account of unseasonal rains and hailstorms. In the next quarter as well, it is projected that sales will be hampered as sales are closely knit with the weather. Looking at the segment revenue, home appliances have not shown much of an increase and have gone up to Rs. 138.90 crores from Rs. 113.64 crores whereas corporate funds have grown tremendously to Rs. 7.39 crores from Rs. 1.91 crores. Gross revenue including treasury income stood at Rs. 146 crores in March 2015 quarter versus Rs. 116 crores in March 2014, registering a growth of about 27%.  Bulk of the business of Symphony, in fact more than 90%, is from residential air coolers and rest is centralized air cooling. Symphony has taken initiatives to grow the centralized air cooling segment but it is still relatively small. The company has succeeded to sign in the rate contracts with HDFC Bank and ICICI Bank for their rural and semi-rural low cost branches. Even all Decathlon stores will have symphony air coolers to cool their showrooms.

Looking at the international business, during the quarter the operations have been restarted. The company has tapped a new market in Vietnam, Cambodia. But in some of the Middle East countries like Egypt and Syria because of political unrest the exports have been partially affected during the quarter and the first nine months supplies to IMPCO have steadied. However, in order to tap the export market Symphony is planning an acquisition but things are in the primitive stage right now so no disclosure has been made.

PAT stood at 36.5 crores versus 27 crores that is an increase of 35% while PAT percentage to gross revenue jumped from 23.4% to 25%. Looking at EBITDA numbers, EBITDA stood at 51 crores versus 36 crores in March quarter showing growth of 43% in absolute number while EBITDA percentage to sales stood at 37% versus 32% last time.

Overall, the growth of Symphony has suffered. However, the reasons for this sufferance are of less significance as weather conditions can never be controlled. Our estimated price of Symphony is around Rs. 1853 per share whereas the current market price is Rs. 1894.90 per share.

 

Standalone Quarterly Statement of Previous 5 quarters

(Rs in crores)	Mar-15	Dec-14	Sep-14	Jun-14	Mar-14
Income from Operations
Net Sales from operations (Net of excise duty)	137.51	151.41	102.71	150.63	113.29
Operating & other income	8.78	4.13	7.69	2.09	2.26
Total income from operations (net)	146.29	155.54	110.40	152.72	115.55
Expenses
Cost of materials consumed	9.52	7.21	3.10	6.71	9.81
Purchase of stock-in-trade	48.01	60.29	47.82	46.68	43.87
Changes in inventories of finished goods, work-in-progress and stock-in-trade	-1.61	-0.67	-3.62	5.41	-4.17
Employee benefit expenses	8.48	6.78	7.88	6.17	5.97
Selling and Distribution Expenses	25.91	25.16	17.51	38.99	19.09
Other expenses	4.83	4.58	6.24	2.77	5.21
Operating Expenses	95.14	103.35	78.93	106.73	79.78
EBIDTA	51.15	52.19	31.47	45.99	35.77
Depreciation & amortization expenses	0.42	0.38	0.62	0.29	0.28
Profit before interest and taxes (PBIT)	50.73	51.81	30.85	45.70	35.49
Finance Costs	0.00	0.19	0.36	0.00	0.01
Profit before tax (PBT)	50.73	51.62	30.49	45.70	35.48
Tax expenses
Current tax	13.82	15.32	8.70	12.97	8.65
Deferred tax	0.40	0.28	0.16	-0.03	-0.20
Provision of earlier years	0.00	0.00	0.00	0.03	0.00
Net profit (PBT)	36.51	36.02	21.63	32.73	27.03

Primary Segment wise Revenue & Results

(Rs in crores)	Mar-15	Dec-14	Sep-14	Jun-14	Mar-14
Segment Revenue
Home Appliances	138.90	152.72	106.06	150.99	113.64
Corporate Funds	7.39	2.82	4.34	1.73	1.91
Segment Total	146.29	155.54	110.40	152.72	115.55
Segment Profit Before Interest & Tax
Home Appliances	43.35	49.01	26.53	43.99	33.64
Corporate Funds	7.38	2.80	4.32	1.71	1.85
Segment Total	50.73	51.81	30.85	45.70	35.49
Less: Finance Costs	0.00	0.19	0.36	0.00	0.01
Less: Taxes	14.22	15.60	8.86	12.97	8.45
Total Profit After Tax	36.51	36.02	21.63	32.73	27.03

Secondary Segment wise Revenue & Results

(Rs in crores)	Mar-15	Dec-14	Sep-14	Jun-14	Mar-14
Segment Revenue
India	111.74	140.11	95.64	131.04	91.68
Rest of world	25.77	11.30	7.07	19.59	21.61
Net Sales from operations	137.51	151.41	102.71	150.63	113.29
Segment Profit before Interest & Tax
India	40.02	48.66	29.03	37.29	27.36
Rest of world	10.71	3.15	1.82	8.41	8.13
Segment Total	50.73	51.81	30.85	45.70	35.49
Less: Finance Costs	0.00	0.19	0.36	0.00	0.01
Less: Taxes	14.22	15.60	8.86	12.97	8.45
Total Profit After Tax	36.51	36.02	21.63	32.73	27.03

Price Performance

About the Author

This report has been prepared by Mridul and Sanyam Mittal. Both are pursuing MBA from Institute of Management, Nirma University located in Ahmedabad, India.

Disclaimer

This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment.

The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidelines only.

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