INSUBCONTINENT EXCLUSIVE:
Air-conditioner manufacturers are doing roaring business across India these days
And so are air-coolers producers.
Even though it is more of seasonal demand, which soars during the scorching Indian summers, the
opportunity is so big that discerning equity investors are making money all the through year.
Ahmedabad-based Symphony commands over 50 per
counted, the volume share falls to just about 14 per cent.
That actually suggests a huge opportunity in an economy which has just made a
paradigm shift into an organised market with the introduction of the goods and services tax (GST) last July.
Equity investors were quick to
That is reflected in the 23 per cent jump in Symphony shares in last one year, compared with a 15 per cent rise in the BSE Sensex.
The stock
has a long winning story, having risen some 44,114 per cent in last 10 year
The stock traded at Rs 1,857
on Friday compared with Rs 4.20 on the same day in 2008
This means if anyone would have invested Rs 1 lakh in the stock in 2008, it would have become over Rs 4 crore by now.
What many investors do
not know if the fact that Symphony had almost gone bankrupt just about 13 years back
It has risen from the ashes to become a global leader in air coolers.
Promoted by Achal Anil Bakeri of Bakeri Group, one of the oldest
realty players in Gujarat, Symphony was incorporated in 1988 and listed on the bourses in 1993
leader in air-cooler manufacturing by now and its books are debt-free
They see at least 15 per cent bumpup in the stock this summer.
Symphony will ride the post-GST shift in the market from unorganised to
35 per cent, 49 per cent and 54 per cent, respectively, in last 10 years
Ebidta is
essentially net income with interest, taxes, depreciation and amortization added back to itHDFC Securities just initiated
The positive view on the cooler maker came on the back of rising demand for cooling products driven by growing disposable incomes, cheaper
financing options and increasing up-country penetration of electricity
Consistent product innovation, growing distribution reach (40,000 dealers targeted as compared with 30,000 now) over the next two years and
untapped opportunities in the rest of the world markets will further aid Symphony
The company commands highest return on capital employed (RoCE) in the consumer durables space
summer of 2018 is likely to be harsh (as per IMD)
We model sales and Ebitda growth of 15 per cent and 32 per cent YoY (14/9% in 4QFY17) for our appliances universe
numbers, has projected Symphony to report 25.10 per cent year-on-year rise in revenue for the quarter ended March 31, 2018, while Ebitda and
PAT are projected to grow 35.40 per cent YoY and 19.60 per cent YoY, respectively.
Symphony is among the top picks of the brokerage.
AK
Prabhakar, Head of Research, IDBI Capital Market, is positive on the stock.
