ICICI Direct's research report on Symphony
Symphony’s standalone and overseas business has seen a gradual recovery on a QoQ basis, however YoY recovery was still ~74% of previous year. According to company, the trade sentiments in the domestic markets were positive and company has witnessed stock out situation in some of the geographies. The inventory level is normalised with channel partners and the company expects good volume offtake from Q4FY21 onwards. On the subsidiaries front, Climate Technologies Australia performance remained impacted due to supply issues & lower operating leverage. The management expects a turnaround of Australian subsidiary from Q4FY21 supported by various initiatives (such as changing sourcing destination from China to India) taken by the management. The other two subsidiaries, GSK China and Impco Mexico performance in terms of topline remain impacted due to pandemic, however company has taken various cost optimisation measures in the subsidiaries. This would help company to improve profitability, going forward. We slightly tweaked our earnings estimates upward by ~2%, 6% for FY22E, FY23E respectively
We rollover our valuation on FY23E and change our rating from BUY to HOLD, with revised target price of Rs 1090 (valuing 27x FY23E EPS).
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