Symphony stock sees biggest intraday jump in over 3 years, rises 19% on stellar Q1 earnings

Shares of Symphony, engaged in the manufacturing and trading of residential, commercial, and industrial air coolers, ended today's session with a gain of 19%, reaching ₹1,465 apiece—the biggest intraday jump since March 2021. 

Investor optimism surged after the company released its June quarter numbers during market hours today, reporting strong growth in both the top line and bottom line driven by robust sales of cooling products amid an intensified heatwave.

The company's revenue from operations during the June quarter jumped to ₹531 crore, a growth of 76%, while the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) improved to ₹112 crore, marking a 300% increase compared to ₹28 crore in the same period last year. On the bottom line, Symphony reported a consolidated profit after tax of ₹88 crore, an increase of 270% from ₹24 crore in the corresponding period of the previous year.

Additionally, Symphony's board of directors approved for a buyback of up to 2,85,600 fully paid-up equity shares with a face value of ₹2 each. This buyback represents up to 0.41% of the total number of equity shares of the company, at a price of ₹2,500 per equity share payable in cash, for a total consideration not exceeding ₹71.4 crore.

This buyback offer price represents a 69% premium over today's market price. Additionally, the company has declared the first interim dividend of Re 1.00 (50%) per equity share with a face value of ₹2 for the financial year 2024–25.

With higher disposable incomes and aspiring consumers, air coolers have emerged as a cost-effective alternative to air conditioners, allowing Symphony to capture a notable market share in this category.

India's promising air cooler market

According to the IMARC Group, India's air cooler market is projected to grow at a CAGR of 7.4% from 2022 to 2027. This growth is driven by increased disposable incomes and a rising share of organised distribution channels. Air coolers offer benefits such as improved air quality and energy efficiency, making them ideal cooling solutions in dry environments.

Moreover, air coolers remain essential household appliances in regions with limited power supply, further solidifying their relevance. With the impending implementation of energy efficiency norms for air coolers by the Bureau of Energy Efficiency (BEE), the market is expected to shift rapidly from unorganised to organised players in the near future.

Looking at the company's annual performance, the company's consolidated revenue from operations stood at ₹1,156 crore in FY 2023–24, compared to ₹1,188 crore in FY 2022–23. The consolidated EBITDA was ₹170 crore in FY 2023–24, up from ₹138 crore in the previous year.

The company registered a consolidated PAT of ₹148 crore in FY 2023–24, compared to ₹116 crore in FY 2022–23. Symphony aims to enhance its market share and reach through its key product ranges: premium and value.

The value range will facilitate penetration into markets currently dominated by regional players, while the premium product range will strengthen the company's presence in urban, tier-2, and tier-3 markets.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.