Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Symphony Ltd (BOM:517385, Financial) announced a second interim dividend of rupees 2 per share, resulting in a total shareholder payout of 77% of the console profit for the first six months.
- The company has maintained a strong focus on capital efficiency, with a negative capital employed of 171 crore as of September 2024, indicating effective capital management despite challenges.
- Symphony's overseas subsidiaries, particularly in Mexico and China, have shown strong performance, with Mexico's top line up by 14% and China's turnover more than doubling.
- The company is actively working on product innovation, introducing new models such as the 'Silent Zoo' air cooler, which is expected to capture market share with its unique features.
- Symphony Ltd (BOM:517385) is strategically diversifying its product portfolio and geographical presence, which positions it well to capitalize on climate change trends and global market opportunities.
Negative Points
- The company is facing challenges with delayed payments from a major distributor, leading to legal actions and impacting domestic receivables.
- Despite a strong summer in 2024, Symphony's growth over the past five years has been modest, with a CAGR of only 6%, largely due to dependency on summer temperatures.
- The Australian subsidiary continues to struggle, with external factors such as the economic impact of COVID-19 affecting sales, particularly in the builder segment.
- There is increased competitive intensity in the air cooler market, with numerous semi-organized sector companies entering the space.
- Symphony's business remains heavily dependent on summer sales, making it vulnerable to seasonal fluctuations and temperature variations.
Q & A Highlights
Q: Can you provide insights on the industry performance this season and Symphony's market share?
A: The second quarter typically sees minimal sales post-June. However, the first quarter (April to June) was strong due to a scorching summer, with Symphony maintaining its market share. Growth was consistent across all geographies. - Achal Bakeri, Managing Director
Q: What are Symphony's plans to revive its Australian subsidiary and improve revenue growth?
A: The Australian market has been affected by external factors like the economic downturn post-COVID. To counter this, Symphony is introducing new products such as portable air conditioners and heaters, which are gaining traction. The brand and distribution network in Australia are strong, and it's a matter of time before these new products contribute significantly to revenue. - Achal Bakeri, Managing Director
Q: Could you elaborate on the delayed payments issue and the steps being taken for recovery?
A: The delayed payments are from a large distributor, with an overdue amount of approximately 44 crore. Legal actions have been initiated, including proceedings under Section 138. The distributor had a strong payment history, making this delay unexpected. - Achal Bakeri, Managing Director
Q: What strategies are in place for the new product launches to capture market share?
A: Symphony is introducing innovative products like the Silent Zoo, the quietest air cooler in the market, and a range of commercial coolers targeting the unorganized sector. These strategies aim to enhance market penetration and capture a larger share. - Achal Bakeri, Managing Director
Q: How is Symphony addressing the competitive intensity in the air cooler market?
A: While there are many players, especially in the semi-organized sector, the organized market remains concentrated among a few companies. Symphony focuses on innovation, distribution, and brand building to maintain its competitive edge. - Achal Bakeri, Managing Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
