Buy Symphony; target of Rs 1710: KRChoksey

KRChoksey's research report on Symphony

Symphony Ltd posted its Q4FY18 results which were below our estimates. Net revenue for the quarter stood at INR 1.5 Bn (-14% YoY). The un-seasonal rainfall in some parts of India impacted the volume sales resulting de-growth during the quarter. For FY18, Consolidated revenue stood at INR 7.9 Bn (+4.4% YoY). EBIDTA for Q4FY18 stood at INR 495 Mn with margins of 31.9% (+445 bps YoY).

Outlook

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 40.7x for FY20E EPS, we assign a P/E multiple of 48.5x and recommend “BUY” rating on the stock with a target price of INR 1,710 representing an upside of 19.1%.