ICICI Direct recommended hold rating on Symphony with a target price of Rs 1295 in its research report dated August August 02, 2019.
ICICI Direct's research report on Symphony
Symphony’s strong consolidated performance in Q1FY20 came on the back of a low base, a demand revival in the domestic business and consolidation of Climate Technology, Australia. On the standalone front, fresh demand from dealers on account of strong summer vis-à-vis low base had translated to strong volume growth at ~100% for Symphony. However, gross margin remained under pressure (down 377 bps YoY on standalone basis) due to a change in mix and higher advertisement expenses restricting EBITDA margin expansion to 15% (vs. standalone annual average of 30%). The company reiterated strong volume growth and margin recovery in FY20E-21E led by leveraging dealer networks along with rationalisation of cost in the overseas and domestic markets.
Hence, we maintain HOLD rating on the stock with a revised target price of Rs 1295 (valuing at 38x FY21E).
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