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Last Updated : Apr 16, 2018 10:34 AM IST | Source:

Buy Symphony, target Rs 2300: Akash Jain

"We expect the stock to double in next 4-5 years and have a target of Rs. 2300 for investors with a horizon of 9-12 months," says Akash Jain, Vice-president, Equity Research at Ajcon Global Services.

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Akash Jain

Symphony has always been our top pick and we had recommended this company as our top Diwali pick. The company has rallied by more than 30 percent during last 6 months. We are structurally bullish on it.

The company has a strong backing of promoters and it is promoted by Achal Anil Bakeri of Bakeri Group, which is one of the oldest realty players in Gujarat. In line with its strategy, it diversified to other countries and started exporting. In addition, it has also made a handsome acquisition of IMPCO in North America in 2009 and Munters Kerulai in China, 2015.


Despite diversifying, the company remains to be a strong player in India. India accounts for 80 percent of total topline and 90 percent of total EBIT. 60 percent of its revenues from North India and West India while the balance of 40 percent is from South and East India.

Ahmedabad based Symphony, today is a market leader in the air coolers segment and has a share of 42 percent in volume terms and 50 percent in value terms in Indis’s organized air cooler market and overall market share is 14 percent when we include the unorganized segment.

Post the implementation of GST demand is shifting from unorganized players in Tier II cities to organized segment which will augur well for Company’s topline growth. Q3FY18 results were also above our expectations.

To drive sales, one needs strong distribution network and Symphony boasts of 30,000 dealers which it targets to increase and touch 40,000 dealers.

The Company is continuously innovating new products for different markets and has done really well in different geographies.

Historically, the financial performance of Symphony has been really impressive. Mind you, the Company was in a financial distress and post 2005 the company focussed on a ‘one product, many markets strategy which has really worked well for it.

The company witnessed topline CAGR of 35 percent and PAT CAGR of 54 percent during last 10 years. With increasing financing schemes offered by NBFCs and increasing disposable income, we expect PAT CAGR to be around 30 percent albeit higher base. Moreover, the company has huge opportunity to be tapped in rest of world markets.The most wonderful thing about the company is the efficiency on the capital employed in its business.

The company has a fantastic ROCE of more than 100 percent owing to the business strategy of outsourcing manufacturing and higher EBITDA margins (25 percent) due to the premium pricing on its quality innovative products. The word for this kind of performance is simply “Wow”.

We expect the stock to double in next 4-5 years and have a target of Rs. 2300 for investors with a horizon of 9-12 months.

Disclaimer: The author is Vice-president, Equity Research at Ajcon Global Services. The views and investment tips expressed by investment experts on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.
First Published on Apr 16, 2018 10:34 am