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Last Updated : Sep 18, 2018 03:42 PM IST | Source: Moneycontrol.com

Buy Symphony; target of Rs 1795: ICICI Direct

ICICI Direct is bullish on Symphony has recommended buy rating on the stock with a target price of Rs 1795 in its research report dated June 26, 2018.

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ICICI Direct's research report on Symphony


Symphony Ltd has signed an agreement to purchase ~95% equity stake in Australia based Climate Technologies Pty Ltd (CTPL) for an enterprise value of Rs 201-221 crore (based on FY18 EBITDA). The company plans to finance the acquisition through a mix of debt (Rs 121 crore) and internal cash accruals (Rs 76 crore). Started in 1979, CTPL manufactures and sells evaporative air coolers (topline contribution of ~54%), ducted gas heaters (topline contribution of ~40%) and other cooling products (like air conditioners) in Australia and US. With the strong brand of ‘Bonaire’ and ‘Celair’, CTPL commands 30% and 25% market share of the domestic Australian evaporative air coolers and ducted gas heaters market, respectively. Geographically, Australia contributes ~88% to the topline while ~12% revenue comes from US markets. The company plans to increase its presence in the US markets (addressable size of Rs 1700-2000 crore) by leveraging its strong relation with one of the largest retail chains Home Depot (2200 stores in the US, Canada and Mexico).


Outlook


We incorporate CTPL’s performance in the consolidated business of Symphony. We model sales, earnings CAGR of 38%, 24%, respectively, in FY18-20E, led by strong domestic performance (wake of higher disposable income & GST) and acquisition of CTPL.


For all recommendations report, click here


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First Published on Jun 26, 2018 01:50 pm
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