See selling & distribution cost going up in Q3: Symphony

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26 Aug, 2025 12:21

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Nrupesh Shah, ED, Symphony said the topline growth was a bit soft because the company had not taken any price increases I the current fiscal but the brand attracts a pricing power which gets reflected in higher operating and PAT margins.Improvement in margins and operating efficiency was also aided by lower commodity prices and if the prices continue to remain soft then the company is confident of maintaining margins at current levels, said Shah in an interview to CNBC-TV18.Symphony reported a net profit of Rs 47.7 crore in the second quarter ended December, 2015 versus Rs 36 crore for the same quarter last fiscal but the topline was a bit shy of estimates at around Rs 162 crore. Total income came in at Rs 162.5 crore versus Rs 135.5 crore year-on-year (Y-o-Y). EBITDA came in at Rs 60 crore versus Rs 48 crore Y-o-Y and EBITDA margins at 37.2 percent versus 35.5 percent Y-o-Y.The selling an distribution cost for the current quarter stood at Rs 300 crore and it is expected to go up in the third quarter (March), said Shah.The company is into manufacturing domestic air coolers, industrial air coolers, and water heaters.Below is the verbatim transcript of Nrupesh Shah’s interview with Sumaira Abidi & Nigel D'Souza on CNBC-TV18.Sumaira: Top-line has been just a little bit shy of what the street wanted to see. Can you first take us through what the volume growth has been this quarter?A: Year-on-Year (Y-o-Y) the volume growth for the quarter and first half has been closed to 19 percent. However, in the current year by and large we have not taken and there was no need to take price increase, so on account of that there may not be a top-line growth. However, considering a brand and considering the substance of the product we do have a pricing power which is reflected in substantial higher operating margin and also in profit after tax (PAT) margin. Nigel: Going ahead do you believe that you can increase prices and what about your margins? Do you believe that you can hold it steady at around this 37.2 percent because that really is the posted, the margin performance?A: Operating margin has gone up in excess of 300 basis point and PAT margin has gone up in excess of 200 basis points which has happened one on account of reduction in commodity price, secondly, improvement in operational efficiency and thirdly also on account of value engineering. If current cycle of commodity prices continue like this we should be in a position to maintain this margin.

Sumaira: What is your market share looking like?

A: In first two quarters that is in September quarter and December quarter our market share would have been easily in excess of 90 percentage because none of the organised players has really succeed in selling anything during these two quarters. Nigel: There was lot of talk that exports sales they are going to be the next kicker etc. There are no signs of that has yet, that was supposed to be the next leg-up for the company, any plans on that front? A: Our most of the exports take place in Northern hemisphere and hence substantial exports get registered in March quarter and June quarter. We do expect that in medium to long-term export should really grow substantially. Not only that on account of acquisition of Chinese company, again it is having a good presence internationally that should also help. However, in first six months even though export is almost flattish and even though in many countries currency has depreciated substantially vis-à-vis dollar we have succeeded in improving our profit before interest and tax (PBIT) percentage on exports. Not only that in absolute amount it has moved in excess of 30 percent.

Sumaira: What has been your selling and distribution cost this quarter? A: Selling and distribution cost in this quarter has been closed to Rs 300 lakhs and in first six months it has been closed to Rs 700 lakhs. In March quarter and June quarter we will have substantial higher selling and distribution cost during which period asset substantial retail sales takes place. Nigel: What are your targeted volumes going ahead? What is your growth strategy; could you give us some kind of guidance going ahead? A: We don’t give quarterly or yearly guidance but as we have conveyed in the past in medium to long term we expect compound annual growth rate (CAGR) growth of 20-25 percent and we maintain that.