Symphony Dominates Air Cooler Market

If you can't afford an air conditioner, buy an air cooler at much cheaper rates to beat the heat

Symphony dominates air cooler market

Air Cooler
Air Cooler | Source

Symphony - stock market position

� Quantity Traded
Deliverable Quantity (gross across client level)
% of Deliverable Quantity to Traded Quantity
10019
2644
26.39
 
 
 
Symphony - stock market position

Symphony - Latest results

(in Cr.)
Dec-11
Sep-11
FY10-11
Revenue
56.18
28.78
232.66
Net Profit
11.3
4.41
44.93
EPS
16.15
6.3
64.23
Cash EPS
16.81
7.02
66.64
OPM %
28.12
24.15
29.4
NPM %
20.11
15.32
19.31
 
 
 
 

Strong brand image


Excellent Q3 Results

Recently Symphony has denied reports regarding acquisition of stake in the company by some famous investors. The company has produced excellent Q3 results for the quarter ended 31.12.11. Revenue has doubled and net profit has nearly tripled over the previous quarter. The shares of Symphony are traded in the Indian stock exchanges at Rs.273.90 (BSE 29.02.12). The shares of Symphony are available in both BSE and NSE. The face value of the company’s shares is Rs.2. The company is operating in consumer electronics field.

Strong Brand Image

Symphony has a strong brand image. The company has also some overseas acquisitions to its credit. It is a Gujarat-based company and operates in industrial coolers and home coolers segment. It has been operating for nearly twenty years. Symphony is able to derive 85% of its business from the home coolers segment and the remaining 15% comes from industrial coolers. Symphony tried its luck in other related sectors in the consumer electronic field like washing machines, air conditioners and water purifiers. But for some reason, the company could not make use of its brand advantage and properly market these items to the public. As a result, the company badly burnt its fingers and hands and had to exit from these ventures and was back to square one.

Outsourcing Production In China

Air cooler industry is a Rs.900 crore industry in India. There are organized and unorganized players both operating in the field. Every year, two million units of air coolers are sold in India. The industry is growing at a CAGR of around 30%. In volume terms, Symphony enjoys a market share of 70% but in value terms it works out to around 45%. The brand value of Symphony is so strong that it does not offer any credit to its products and insists on cash payment. Most of the production of the air coolers for the company is made in China. As regards overseas acquisition, Symphony acquired IMPCO, the Mexican cooler company, which has a strong presence in Mexico and USA.

Sympony introduced plastic air coolers which are portable

Air cooler
Air cooler | Source

Symphony - share price movement

Symphony - share price movement
Symphony - share price movement | Source

Symphony - share price movement

 
 
 
Weekly H/L
280.95
251
Monthly H/L
1,250.00
244
52 Weeks H/L
1,250.00
190
 
( 15 Feb 12 )
( 8 Aug 11 )
52 Weeks H/L (Unadj)
1,672.00
251
 
( 13 Apr 11 )
( 27 Feb 12 )
Delivery / Var+ELM %
52.45
30.98
Symphony - share price movement

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Proximity To Seashore Affects Air Coolers


Bagging A Huge Contract From Walmart

The highest and the lowest share price recorded by the company in the last one year are Rs.1250 and Rs.190 respectively. But this is a misleading figure. The share price of Rs.1250 was before the company split its shares into five sub divisions and therefore investors should divide this figure by 5 to get the correct picture. Some times back, the shares of Symphony rose in the Indian stock markets because of the rumour that Symphony had bagged a huge order for air coolers from the US retail giant Wal-Mart. The share price rose inspite of the company’s earnings declining by 42% in Q1 of the current year. Symphony confirmed the orders but did not reveal the size of the order. But it should be a huge one.

Proximity To Seashore Affects Air Coolers

Symphony has the first mover advantage that enabled it to establish its dominance in the organized air cooler market. Many lower middle class people are opting for air coolers as it is much cheaper than air conditioners and is easier to maintain. In air coolers, one needs to pour one or two buckets full of water and the fan will supply a cool air in the room. Even poor people buy air coolers and use them in their small dwellings for comfort and relief from the scorching heat. But there is one disadvantage in using air coolers. People living near the sea shores find the air coolers not giving best performance and breaking down soon. But for people living in the interior where humidity is low, air coolers are a boon to get cool air at much cheaper rates.

Good Investment For Medium And Long Term

Symphony was the first company to introduce noiseless air coolers in the market. Symphony was the first to introduce the modular design. Symphony was the first company to switch over from a heavy metal body to a lightweight plastic body. In 2009, Symphony notched up a turnover of Rs.124 crore and a profit of Rs.39 crore. But in 2010, the figures increased to Rs.193 crore and Rs.55 crore respectively. At the current market price of Rs.273.90, investors can buy the company’s shares and accumulate them at every decline for medium and long term holding to get decent gains.

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