Symphony Ltd. share price target

The standalone revenue (~65% of total sales) witnessed a slow recovery (only 56% of pre-Covid level) as channel inventory remained higher in Q2FY21 (channel inventory at 40% of pre-Covid volume). We continue to expect a strong H2FY21 for domestic markets amid low base and refilling of channel inventory. On the international front, the revenue growth at 4% was led by Climate Technologies (Australia). We model, revenue CAGR of 11% in FY20-23E supported by ~12% and 10% revenue CAGR in the overseas...

Less impact of pandemic on overseas business Sharp fall in domestic revenue by 77% YoY was partly arrested by relative lower fall in oversees revenue by ~17% YoY. Hence, consolidated revenue fell ~47% YoY. While dealers managed to liquidate their inventory holding by ~60% in Q1FY21, management reiterated a demand recovery post lockdown relaxation. While we continue to expect H1FY21 to be challenging, recovery may start from H2FY21 onwards with lockdown restrictions easing. On domestic front, revenues may grow at 16% FY19-22E, driving overall...

We expects sales to recover from Q2FY21 onwards supported by new models of commercial and industrial coolers, once lockdown is lifted. We reiterate our ACCUMULATE rating on the stock with a target price of Rs. 1,006 based on 33x FY22E adj. EPS. Nation-wide lockdown slows down pace of topline growth In Q4FY20, Symphony reported revenue of Rs. 249cr, a rise of 6.0%YoY with its new product launches (6 commercial coolers, 2 industrial coolers, and 8 household coolers) during 2019 and product mix. On annual basis, the revenue grew to Rs. 1,103cr...

Symphony's Q4FY20 revenues were in line with estimates. During the quarter Jan-Feb witnessed strong sales in anticipation of strong summer season; however the sales were impacted in second half of March due to lockdown.

Low base, inventory push drives domestic performance Despite revenue loss in March 2020, standalone revenue grew 12% YoY to | 154 crore due to low base and dealer stocking before the summer. While the management reiterated a strong summer demand for air coolers in May 2020 (post relaxation from lockdown), dealers managed to liquidate their inventory holding by ~40%. The company also launched a digital campaign to help liquidate channel inventory as well as company level inventory before the end of summer. We believe the H1FY21 would be very...

January & February witnessed reasonable growth due to inventory build-up at the dealer's level. In March, the company is expected to be impacted negatively by the lockdown situation across states. Standalone sales for the last 10 days fell 10% YoY due to shutdown...

Innovative new launches of higher margin products to drive top-line growth; low dependence on supplies from China and already procured components for upcoming season & available alternative sources, co will not be impacted by any potential supply chain disruption from China.

Q3FY20 consol. Revenues grew 21% Y-o-Y at Rs 290 cr Vs Rs 240 cr in Q3FY19 led by higher volumes across segments. The Gross margins stood at 47.9% during the quarter (vs. 46.3% in Q3FY19) on higher sales growth, aided by better product mix.

We expect earnings to grow at a healthy 25.9% CAGR over FY20-22, supported by launch of new models, improved product mix and continued focus on innovation. We upgrade our rating to ACCUMULATE on the stock, with our target price of Rs. 1,480 based on 35x FY22E EPS. Topline grows with new products Symphony reported revenue of Rs. 290cr in Q3FY20, a rise of 20.8% YoY, primarily driven by launch of new models (6 commercial coolers, 2 industrial coolers, and 8 household coolers), and improved product mix. Domestic revenue rose 27.1% YoY...

We believe standalone volume growth in Q3 and 9MFY20 was on a low base and inventory build-up at dealer's level. According to the management, the company witnesses strong demand traction of residential coolers across channel partners in India. The management also reiterated that domestic demand is likely to remain robust with the start of summer in the coming months. Hence, FY20 is likely to close on a strong note. However, on the international subsidiaries, GSK China reported a revenue decline for Q3FY20 and 9MFY20 to 27% and 21% YoY to | 8 crore and | 37 crore, respectively....