KRChoksey is bullish on Symphony has recommended buy rating on the stock with a target price of Rs 1710 in its research report dated July 27, 2018.
KRChoksey's research report on Symphony
Symphony Ltd posted its Q1FY19 results which were below our estimates. Net revenue for the quarter stood at INR 1.46 Bn (-23% YoY). The un-seasonal rainfall in some parts of India impacted the volume sales resulting de-growth during the quarter. EBIDTA for Q1FY19 stood at INR 170 Mn (-39% YoY), with OPM at 11.6% (-309 bps YoY). The EBITDA was affected due to higher levels of inventory and higher advertisement spends. PAT for Q1FY19 stood at INR 200 Mn (-48.7% YoY), with NPM at 13.7% (-683 bps YoY).
We anticipate revenue to grow at CAGR of 8-10% and PAT to grow at CAGR of 13-14% between FY17 and FY20E. Currently the stock is trading at a P/E of 32.3x for FY20E EPS, we assign a P/E multiple of 48.5x and maintain our “BUY” rating on the stock with a target price of INR 1,710 representing an upside of 50%.
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