Name: Latest research reports of Symphony Ltd. authored by HDFC Securities and published by - Trendlyne research reports.
Item: Symphony Ltd.
Rating: 5
Author: HDFC Securities

Symphony (3QFY20): Good times continue Maintain BUY

Buy: Symphony Ltd.

Target

HDFC Securities

Summer 2019 confirms our thesis that Symphony will deliver strong performance if summer is hot. Organised air cooler market (27/35% volume/value mix) will deliver 15% CAGR despite rising affluence towards RAC. Symphony's constant focus on product innovation and superior franchise with distributors will make the company competitive. With low trade inventory, record and buoyed with new launches, Symphony will enjoy stocking in earnest if the summer is strong as expected. Besides, its international performance will improve given the various initiatives undertaken. Symphony posted strong 27/29% domestic rev/EBIT growth at a time when most consumer companies are facing issue is maintaining trade inventory amidst liquidity issue. Co has delivered 48/68% domestic rev/EBIT growth in 9MFY20. Strong franchise with trade, high brand recall, record new launches and favourable base are driving the domestic growth. We remain bullish on Symphony given its sharp recovery in domestic biz and scope to tap new opportunities (industrial and commercial cooling, portable coolers in Aus and US). We value Symphony at 45x Dec-21 EPS. We believe the stock will re-rate owing to consistent outperformance vs. other appliance cos. We maintain BUY with TP of Rs 1,786.