Complete Details from the June 2024 Conference Call
The sources provide a transcript of Symphony Limited’s Q1 FY25 Earnings Conference Call, held on 6 August 2024. Here is a detailed summary of the key information discussed:
Financial Performance:
- Record-breaking quarter: Symphony achieved its highest ever quarterly revenue, EBITDA, and PAT in Q1 FY25.
- Consolidated Revenue: ₹ 531 crores, representing a 76% year-on-year growth compared to Q1 FY24.
- Consolidated EBITDA: ₹ 112 crores, nearly doubling compared to the previous year and achieving a 21% margin.
- Consolidated PAT: ₹ 88 crores, a significant increase from ₹ 24 crores in Q1 FY24, representing a 16.6% profit margin.
- Symphony India Revenue: ₹ 373 crores, demonstrating a remarkable 116% year-on-year growth.
- Symphony India EBITDA: ₹ 82 crores, a substantial improvement from ₹ 7 crores in the previous year.
- Symphony India PAT: ₹ 69 crores, marking a 375% surge compared to Q1 FY24 and translating to an 18.4% profit margin.
- Subsidiaries (excluding exports from Symphony India):
- Revenue: ₹ 158 crores, a 22% increase.
- EBITDA: ₹ 29 crores, up 41%.
- PAT: ₹ 20 crores, more than double the previous year’s figure.
Key Drivers of Performance:
- Strong Summer and Heat Wave: The intense summer and heat wave in India played a significant role in driving air cooler demand.
- Successful Execution of Strategies: The “Symphony Transformation Phase 3” initiatives contributed to the strong performance.
- Product Penetration and Perseverance: Expansion into semi-urban and rural markets, along with a well-suited product portfolio, played a crucial role.
- D2C Growth: The direct-to-consumer (D2C) segment experienced significant growth and achieved profitability, with EBITDA margins now in line with traditional trade.
- Entry into Adjacent Product Categories: The introduction of new products like tower fans and storage water heaters received a positive response.
- Improved EBITDA and PAT Margins: The expansion in gross margin, operating leverage due to top-line growth, and successful cost control measures contributed to improved margins.
- Strong Subsidiary Performance: IMPCO Mexico and GSK China performed exceptionally well, contributing to the overall positive results.
Brand Performance Highlights:
- Dominant Google Search Share: Symphony held over 60% of the Google search share for the air cooler category, indicating strong brand awareness and consumer preference.
- Impressive YouTube and OTT Search Performance: Over 540 million impressions and 130 million views were registered on YouTube and OTT platforms, showcasing the effectiveness of Symphony’s digital marketing campaigns.
- Strong D2C Website Traffic: Symphony’s D2C website attracted over 4 million visitors in the past 12 months, reflecting increasing consumer interest in purchasing directly from the brand.
- Innovative Sales Channels: Initiatives like partnering with Blinkit for quick deliveries demonstrated Symphony’s focus on enhancing customer experience and convenience.
Overseas Subsidiaries:
- IMPCO Mexico:
- Revenue grew by 46% year-on-year, exceeding ₹ 100 crores for the first time in any quarter.
- PAT grew by 77%, showcasing robust profitability.
- Climate Technologies (Australia):
- Faced demand headwinds and macroeconomic challenges, leading to a decline in revenue.
- Successfully implemented Part 1 of a business transformation plan, helping to contain EBITDA and PAT despite lower revenue.
- Management expressed optimism about exceeding last year’s sales figures for the remainder of the fiscal year, citing order backlogs due to logistical delays.
- GSK China:
- Achieved strong top-line and bottom-line growth, driven by cost reductions and operational improvements.
- Repaid approximately ₹ 7 crores of its outstanding loan from Symphony India, with expectations of further repayments in the current year.
- Serving as a manufacturing source for IMPCO Mexico and Climate Technologies Australia, leveraging its cost advantages to benefit other subsidiaries.
- Symphony Brazil:
- Experienced minimal sales due to the off-season (winter in Brazil).
Shareholder Payout:
- Buyback: ₹ 71.40 crores buyback approved, representing 10% of the company’s net worth at ₹ 2,500 per share.
- Interim Dividend: 50% interim dividend declared, amounting to ₹ 1 per share with a face value of ₹ 2.
- Total Payout: Approximately ₹ 97 crores, including buyback, dividend, and associated expenses.
New Product Launches:
- Air Coolers: 17 new air cooler models were launched across 6 ranges, including innovative features like quiet operation, high airflow, and advanced air filtration.
- Storage Water Heaters: Symphony re-entered the storage water heater category with the launch of three ranges (SPA, SOUL, and SAUNA) featuring unique selling propositions like 9-layer water filtration technology (PUROPOD) and AI-enabled smart controllers.
Outlook:
- Positive Outlook: Management expressed optimism about the future, citing factors like climate change, below-normal trade inventory, innovative products, and expansion into new markets.
- Sustainable Growth: Symphony aims to achieve a compounded annual growth rate (CAGR) in line with its historical performance.
- Category Growth Potential: Management believes that the air cooler category has significant growth potential, driven by factors like rising temperatures, energy efficiency concerns, and increasing affordability.
- Industrial Cooling: While the industrial cooling segment saw growth, it’s yet to reach an inflection point. Symphony remains committed to this segment and anticipates future growth opportunities.
Key Takeaways:
- Symphony delivered exceptional performance in Q1 FY25, driven by a combination of favourable market conditions, strategic initiatives, and operational excellence.
- The company is leveraging its strong brand, innovative products, and expanding distribution network to capitalize on the growing demand for air coolers in India and globally.
- Symphony’s entry into adjacent product categories like storage water heaters reflects its strategic diversification efforts and aim to build a more year-round business.
- The strong performance of overseas subsidiaries, particularly IMPCO Mexico and GSK China, demonstrates Symphony’s successful international expansion strategy and ability to navigate diverse market conditions.
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