Symphony says no signs of slowdown in sales in India
Air cooler maker Symphony says there continues to be a good demand for its products in India. But growth in US and Mexico has been modest and there has been some correction in sales.
Nachiket Kelkar
moneycontrol.com
There may have been some slowdown in discretionary spends in the country amid the overall economic downturn, air coolers continue to see good demand in the market, according to a top company official at Symphony Ltd."Air cooler is relatively a low ticket item. Hence, whether its inflation, or slight slowdown of economy, or consumer sentiment slightly being down, doesn't affect much. When we announced our Q3 and 9-months results in April, we had surpassed sales of last year, value wise in the domestic business...So overall we are doing well, on expected lines," Nrupesh Shah, ED - Corporate Affairs, told moneycontrol.com in an interaction.Symphony, which makes residential and industrial coolers, apart from water heaters, reported a third quarter standalone net profit of Rs 18 crore, up 20 percent year-on-year. Its net sales in Jan-March were up 9 percent from a year ago to Rs 85 crore. For the nine-months ended March 31, its net profit rose 19 percent to Rs 37 crore, while net sales were at Rs 197 crore, up 21 percent. While the company may be doing well in India, its operations in North America seem to have taken some hit. The company makes residential and industrial air coolers through its arm Impco in Mexico for sales across North America. It has also launched its coolers in some Latin American countries and Africa.Symphony divides its international operations in two parts -- Mexico and US business under Impco and the rest of the world.Shah says in the rest of the world, volumes have grown over 30 percent year-on-year in the first nine months of the fiscal, while value sales are up over 50 percent. Bulk of the business here comes from Latin America, Middle East, North Africa and South East Asia. However, he does admit there has been some "correction" in sales over at Impco."As such our subsidiary company was sitting on substantial stock of Symphony residential coolers as on June 30th 2012. Current year as a one time and strategic step, we have decided not to export, so on that part, current year there is a correction," Shah said.The company had made ambitious business plans in US and Mexico in 2011-12 and so had exported huge stock of coolers. However, growth there has only been "modest", he added.Russia, Sri Lanka, Bangladesh, Indonesia, Afghanistan, Sudan and some Latin American countries are among the markets the company has entered in recent past. Symphony aims to expand into more markets in South East Asia, Africa and Latin America to grow its overseas business. It will also tap European countries, where it currently has negligible presence.Symphony doesn't have huge capex plans since most of its manufacturing in India is done by third parties. However, it is consolidating its various offices into one building, and the construction of the new building will require some capex. Symphony shares closed at Rs 333.45 on NSE, down 0.4 percent. The stock has gained 57 percent in the last one year. "The current quarter is the key sales period. With the onset of summer across the country we expect the company to report strong numbers. We continue to remain positive on the future growth prospects and the space in which the company operates," IDBI Capital analyst Arun Baid said in a report earlier this month. IDBI Capital has a "hold" rating on Symphony, with a target price of Rs 365 on the stock.Also Read: Larsen & Toubro Q4: Net down 7%, bonus issue fails to cheernachiket.kelkar@network18online.com Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
