Symphony Q1FY18 Concall Summary


Financial Highlights

Symphony Q1FY18 Financial Performance.png
  • Second time in last 20 quarters, Symphony has experienced degrowth in topline
  • Significant reduction in profitability margin
  • Degrowth of 15% in the topline; mainly due to erratic rains in the country
  •  The overall demand of the five new touch series of models was high and these were launched at introductory price, contributing to lower profitability
  •  The company has taken a substantial price hike (15-23%) with effect from 1st July 2017; expecting the contribution margin and EBITDA margin to rise to December’16 level
  • Sales has decreased from Rs.152 crores to Rs.129 crores YoY (15% reduction)
  • Gross revenue down from Rs.158 crores to Rs.142 crores YoY (10% reduction)
  •  EBITDA has decreased from Rs.44 crores to Rs. 32 crores YoY (reduction of 28%); EBITDA margin to gross revenue down by 570 bps to 22.5% YoY
  •  Reduction in PAT from Rs. 31.56 crores to Rs. 24.04 crores YoY (24% reduction); PAT margin reduced from 20% to 16.9% YoY
  • Market share has increased to excess of 50%, from 40%

Impact of GST

  • There was a rate benefit to the company
  • Simplification of business in respect of efficiency in logistics and speed
  • Clear move from the unorganized sector to organized sector in the market and this is expected to accelerate
  • Dramatic improvement in the organized retail; market share of 60-90% in organized retail
  • The tax rate has reduced to 18% post GST, from the overall tax of 21% including the excise duty, VAT and Service tax

 International Business

  • Robust growth in the sales in Europe
  • Opened up new markets in South America and African countries
  • Challenging economic and political environment in Middle East and Saudi Arabia a cause of concern
  • Strengthening of Rupee has also affected the international market
  • Strong profitability and contribution margin of the company helps reducing the impact

Air cooling segment performance

  • Capital Employed increased from Rs. 95 crores to Rs. 171 crores YoY
  • This is due to some inventory build-up at the company level; However, due to the robust booking, the inventory expected to reduce to zero by August
  • Hikes in the advances to the OEMs has also led to increase in the Capital Employed

Geographical performance

Symphony Q1FY18 Geography and Segment wise Results Q1FY18.png
  • Decrease in the revenue in India from Rs. 134 crores to Rs. 110 crores YoY; close to 18% reduction
  • Revenue from rest of the world has increased from Rs. 18 crores to Rs. 20 crores YoY, up by 8.3%