HDFC Securities' research report on Symphony
While Symphony's domestic revenue (c.70% of consolidated revenue) was in line, sustained weakness in its RoW portfolio led to an overall miss. Domestic revenue grew 23% YoY to INR 2.1bn (highest-ever quarterly revenue). However, the delayed onset of summer has led to high channel inventory. Domestic EBIT was up by 48% YoY (HSIE: 31%) while margin at 23% was up 400bps YoY. The RoW business (30% of consolidated revenue) was impacted by weak traction in CT, Australia (down 38% in FY23). Weak traction both in Australia and the US is leading to subpar performance. The RoW delivered an EBIT loss of INR 230mn (largely attributed to weak CT performance). With the risk of a curtailed summer season looming on its domestic business and the execution of its RoW portfolio unconvincing, we believe risk-reward has turned unfavourable.
Outlook
We cut our FY24/FY25 EPS by 15/9%, value the stock at 30x P/E (earlier 35x) on Mar’25E EPS and derive a TP of INR 950. Downgrade to REDUCE.
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