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Buy Symphony Ltd For Target Rs.1,519 By Geojit Financial Services Ltd
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Strong Q2 performance, Rating Upgraded
Symphony Ltd. and its subsidiaries manufacture and trade in residential, commercial and industrial air coolers in the domestic and international markets. The company operates through the air coolers and corporate funds segments and offers residential, packaged and central air coolers.
* Symphony’s consolidated revenue rose 14.5% YoY in Q2FY25 to Rs. 315cr, supported by strong domestic sales.
* Symphony’s revenue in India rose 24.5% YoY, reaching Rs. 239cr, while international revenue declined 8.4% YoY to Rs. 76cr. This growth in the domestic market highlights Symphony’s strong presence in India despite challenges in global markets.
* The air cooling and other appliances segment saw a 16.3% YoY increase in revenue to Rs. 321cr, on the back of strong brand value, a diverse product portfolio and robust market presence. Symphony’s corporate funds segment grew 40.0% YoY, reaching Rs. 14cr, driven by the addition of a product to its portfolio.
* The company’s EBITDA surged 56.1% YoY in Q2FY25 to Rs. 64cr, primarily driven by a robust revenue base and an optimised cost structure, with fixed costs remaining stable. As a result EBITDA margin expanded 540bps YoY to 20.3% on account of better realisation at the subsidiary level.
Valuation
Symphony delivered a strong Q2FY25 financial results, driven by its robust domestic sales growth, solid brand value, and diversified product portfolio. Symphony’s recent launch of 17 air cooler models and expansion into the water heater market are expected to boost demand and sales performance, while its focus on environmentally conscious solutions and innovative products should drive long-term growth. Management expressed confidence in future growth, projecting a double-digit CAGR in India, fueled by market expansion and advancements in product innovation. Despite recent share buybacks and elevated valuation, we believe the stock offers value at current levels. Hence, we upgrade our rating on the stock from REDUCE to ACCUMULATE with a revised target price of Rs. 1,519, based on 37x FY26E adjusted EPS.
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SEBI Registration Number: INH200000345
