Buy Symphony; target of Rs 2745 : ICICI Direct

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

ICICI Direct's report on Symphony• Adjusted for a change in reporting method, Symphony’s sales volumes, jumped ~19% YoY in Q1FY16, leading to sales growth of ~26% YoY to ~Rs 129 crore. Realisation during the period increased ~7% YoY on the back of launch of new products in the market. Strong volume growth was led by primary sales wherein the company added 80% of its targeted annual dealer enrolment. A sharp expansion in EBITDA margin by 316 bps YoY can be attributed to an expansion in gross margin and saving in employee expenses (as a percent of sales)• According to the management, the recovery in subsidiary Impco is on track while Symphony’s Chinese acquisition is progressing as per schedule with integration process expected to finish in three months Outlook and valuationWe believe the air cooler industry will grow at ~19% CAGR in FY15-25E, due to demand remaining intact in tier-II and tier-III cities. This coupled with sharp growth in modern trade volume would further help in expanding industry as a whole. Currently, the air cooler industry is largely dominated by the unorganised segment (~80% volume market share).We believe a shift from the unbranded to branded category (due to rising aspiration level) provides huge potential for organised players to grow at 25% CAGR in FY15-25E. Symphony being the market leader (current volume market share ~40%) is expected to benefit the most from this structural shift in the long run. We estimate Symphony will record ~24% volume CAGR in FY15-25E.Further, as a policy, Symphony would keep the dividend payout at more than 50%. This would increase its return ratios, going forward. We have used the DCF method to value the company, assuming revenue CAGR of ~26% FY14-25E, terminal growth of 5% and WACC of 11.4% to arrive at target price of Rs 2745/share, says ICICI Direct research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More