Symphony stock has risen over 10,000% delivering huge returns for its shareholders in the last 10 years. If you had invested Rs 1 lakh into the stock 10 years ago, investment would be worth Rs 1.04 crore today. On November 20, 2009, the Symphony share closed at Rs 11.41 compared to yesterday's close of Rs 1196.25 translating into 10,384% gain on BSE.
In comparison, benchmark Sensex saw 138% rise during the period.
Symphony share has managed to outshine its peers in last ten years. Blue Star, another key player in the air cooler market, could return 134.37% during the period. While Voltas share gained 294.98%, Symphony's another close competitor Bajaj Electricals clocked 100.25% returns during the same period.
For the quarter ended September 2019, Symphony reported a 87.1% rise in consolidated net profit at Rs 58 crore compared to net profit of Rs 31 crore in the corresponding quarter of previous fiscal. Total income rose 22% to Rs 283 crore in Q2 against Rs 232 crore income in the corresponding period of previous fiscal. Earnings per share gained 86.33% to Rs 8.18 in last quarter against Rs 4.39 in the second quarter of last fiscal.
During the last ten years, financial performance of the firm has pushed the stock higher. Revenue rose 355% to Rs 882.52 crore for fiscal ended March 2019 from Rs 193.58 crore for fiscal ended June 2010. Net profit rose 147.43% to Rs 91.55 crore in last fiscal compared to Rs 37 crore for fiscal ended June 2010.
However, financial performance lost some shine in last fiscal with total expenses taking a toll on the firm's bottom line. Total expenses rose to Rs 728.31 crore for fiscal ended March 2019 compared to Rs 587.59 crore for fiscal ended March 2018 which led to a 52.45% fall in net profit between two fiscals. Net profit stood at Rs 192.55 crore for fiscal ended March 2018.
Price to earnings ratio of Symphony stock stands at 63.42 compared to the industry PE of 72.74. This indicates the stock is undervalued compared to the industry. On November 13, 2019, HDFC Securities set a target price of Rs 1,812, implying 47.67% upside from the share price of Rs 1,227 on that day.
In a note, the firm said, "Symphony's constant focus on product innovation and superior franchise with distributors will make the company competitive. With trade inventory now at low levels, Symphony will enjoy off-season stocking, opportunity to launch tech-rich coolers and benefit from a favourable base.
Besides, its international performance will improve given the various initiatives undertaken. We remain bullish on Symphony given its sharp recovery in domestic business and scope to tap new opportunities (industrial and commercial cooling, portable coolers in Australia and US). We believe the stock will re-rate owing to consistent outperformance compared with appliance firms. We maintain BUY with target price of Rs 1,812."
By Aseem Thapliyal