Initiating Coverage

Symphony Ltd

It’s going to be a ‘HOT’ summer…

27 FEB 2019
 27 FEB 2019 Company Report

BUY
Target Price: Rs 1,680

CMP : Rs. 1230

Potential Upside : 37%

MARKET DATA

No. of Shares : 7 Cr.

Market Cap : Rs. 8,605 Cr.

Symphony Ltd
Avg. daily vol. (6mth) : 14,797
52-w High / Low : Rs. 1992/812
Bloomberg : SYML IN
Promoter holding : 75%
Consumer Durables : N.A.
FII

It’s going to be a ‘HOT’ summer… Price performance

140

90

40
Feb-18 Jun-18 Oct-18 Feb-19
Sensex Symphony

Financial Summary Shareholding pattern

Y/E Net Sales PAT EPS Change P/E RoE RoCE DPS Q-o-Q Chg
Dec.-18
March (Rs Cr) (Rs Cr) (Rs) (%) (x) (%) (%) (Rs) (%)
FY17 765 166 23.8 40.5 - 39.6 58.1 8.0 Promoters 75.00 0.00
FY18 798 193 27.5 15.8 - 34.6 48.7 2.7 FPIs 6.20 0.02
FY19E 920 157 22.4 (18.5) 57.4 21.7 29.3 2.7 MFs / UTI 8.94 0.27
FY20E 1,145 225 32.1 43.2 39.5 25.3 32.6 3.5 Banks / FIs 0.01 (0.29)
FY21E 1,289 261 37.3 16.2 33.9 23.5 31.0 4.0 Others 9.85 0.00
Source: Company, Axis Securities CMP as on Feb 27, 2019

Pankaj Bobade – AGM - Research (Head)|  pankaj.bobade@axissecurities.in |  (+91 22 4267 1736)

 27 FEB 2019 Company Report

Symphony Ltd
Investment Rationale Sector: Consumer Durables

Symphony Ltd, has established itself as the leading player par excellence in the evaporative air-cooling technology to
become world’s largest air-cooler manufacturer. The company offers wide range of air-coolers across residential, industrial
and commercial segment. Symphony Ltd has carved a niche for itself in the air-coolers market by offering various designs
along with innovative features to fit the pockets of variety of consumers and pander to their changing tastes. Having gone
almost bankrupt, Symphony Ltd emerged like a phoenix in the air-coolers market to become a global leader with ‘one
product, many markets’ theme and acquiring companies in Mexico, China and Australia to expand its footprint overseas
and into the industrial and commercial air-cooling market. It currently commands ~50% market share by value and
upwards of 40% by volume in the organized domestic air-coolers market.

Rising per capita income to enable improving demand for consumer durable goods

Symphony
would be Increasing electricity penetration and rise in power availability esp. in rural India
big beneficiary
of rising temperature
across globe due to Under penetration of coolers coupled with hot summers offers untapped opportunity
global warming and
changing
weather Temperature variations is a global phenomenon making cooling solutions a necessity
patterns

Industrial and commercial cooling opens up a big business opportunity

We initiate coverage with BUY rating and a target price of Rs. 1,680 i.e. 37% upside.

3
 27 FEB 2019 Company Report

Symphony Ltd
Investment Rationale Sector: Consumer Durables

Air coolers- middle class Changing weather, global warming Technological innovations, under-
household’s solace in summers necessitates cooling solutions Symphony
penetrationdifferentiates itself
to drive growth
India being a sub-tropical country, the
One of the most immediate and obvious Technological innovations differentiates the
summers witnesses scorching heat. Air
effects of global warming is the increase in products; air coolers with smart looks,
coolers have proved to be one of the
temperatures around the world. The feather-touch digital control panels, remotes,
superior alternatives to Air Conditioners
average global temperature has increased auto swings, alarms and other intelligent
(ACs); air coolers provide Natural or
by about 1.4 degrees Fahrenheit (0.8 features are gaining popularity over the run-
Evaporative Cooling and score over ACs in
degrees Celsius) over the past 100 years, of-the-mill products from unorganized
terms of lower life-cycle cost and enhanced
according to the National Oceanic and segment. The air cooler market in India is
flexibility. Being a low initial cost product
Atmospheric Administration (NOAA). dominated by unorganized segment; current
(about half the price of a 1 Ton window
Rising temperatures, coupled with heavy size of market is estimated to be 80 lakh
AC to cater to a approx. 200sqft room,
urbanization and delayed and/or short units per annum growing at high single digit
with a 10ft ceiling height), the Air Cooler is
monsoons, make summers unbearable to low double digit; 30% of the market is
quite popular in the hot, dry parts of the
calling for effective cooling solutions viz. catered by organized segment, balance by
country. To top it, the running cost is only a
air coolers which are within the reach of unorganized players. Improving power
small fraction of the power-guzzling ACs
the general population. With rising availability, rising prosperity and increasing
and since there is no refrigerant to leak or
mercury, the demand for air coolers rise environmental consciousness is likely to
compressor to burn out, the maintenance
especially in the hot dry parts of the generate attractive air cooler market growth
cost is also very low. The lower cost of
country during the months of April, May over the foreseeable future; organized
ownership and constrained power supply
and June before the rainy season arrives. segment is expected to grow faster than the
situation in India, air coolers are in high
unorganized segment.
demand in India.

4
 27 FEB 2019 Company Report

Symphony Ltd
Investment Rationale Sector: Consumer Durables

Focused player, asset light business Centralized Air cooling- offers Beating seasonality Rising
in the exports
business
model backed by strong brand enormous prospects opportunity
by diversifying across borders
With acquisition of Climate Technologies
Having learnt hard lessons from rampant In order to tackle seasonality in the
Pte., Australia, Symphony has widened its
diversification of product basket way back in business, the company is now focusing on
international footprint sticking to its ‘one
2004, Symphony management has now industrial/ commercial segment by offering
product, many markets’ moto. The
directed all its focus on single product viz., cooling solutions. With acquisition of
Australian acquisition not only provides
air coolers. Today, Symphony is the largest IMPCO, Mexico in 2009, Symphony got
Symphony Ltd. access to new geographies
air cooler company in India with ~50% foothold in the industrial cooling systems
viz., Australia and USA (one of the largest
market share of organized market in value and entry into lucrative USA and Latin
air cooling market is the world) but also an
terms and upwards of 40% in volume terms. American market. Acquisition of M Keruilai
opportunity of moderating its business risks
‘Symphony’ ranks amongst top trusted brands Air Treatment Equipments (Guangdong),
because of complimentary weather
in air cooling segment and has become a China (now known as GSK, China) was
conditions prevailing in India and Australia
generic name for air coolers. It outsources another step in the same direction. Both the
along with the presence of Climate
100% of its production to around 9 OEMs, companies are pioneers in evaporative
Technologies in both cooling as well as
thus following an asset light business model. cooling systems and boast of a strong R&D
heating segment. Climate Technologies
The outsourcing model enables the team. The usage of cooling improves
gets immediate access to Symphony’s
management to focus on innovation, design productivity at work place; the
international distribution network across 60
& development, marketing along with brand development of commercial real estate in
countries. Going forward, we expect the
building. No wonder the company enjoys cities and rise in industrialization has
synergies to drive the top line and bottom
excellent capital efficiency, the return on offered an enormous opportunity for
line growth for the consolidated entity.
capital employed (RoCE) has been 45% plus centralized cooling/ industrial cooling.
for last 10 years.

5
 15 Feb 2019 Company Report

Symphony Ltd
Industry wide demand drivers Sector: Consumer Durables

Increasing middle class population Increasing per capita income

4,000
80
69 3,000
70
2,000
60
52
1,000

1,482

1,486

1,610

1,639

1,749

1,976

2,016

2,188

2,380

2,585

2,803

3,040
50
0
40

FY16
FY12

FY13

FY14

FY15

FY17

FY18

FY19E

FY20E

FY21E

FY22E

FY23E
2012 2020

Middle ClassPopulation (%) India Per Capita Income USD

Air coolers Penetration vs. Other Consumer Durables  It is estimated that affluent middle class will constitute 69% of the
total population by 2020 and 64% will be living in urban clusters.
100%
85% 89%  India’s per capita income was $1482 in FY2012 which has
crossed $2000 in FY18 and is expected to increase to almost
80% 70%
60% $3000 by FY23. Increasing per capita income will lead to higher
60% spends on aspirational goods including consumer durables.
 Air-coolers penetration, being a seasonal product, is very low
40% 30% compared to other consumer durable goods. But the sweltering
25%
20% 17%
20% 10% heat witnessed in hot summer necessitates the need for cooling,
4% making air-cooler an essential consumer good.
0%  Low initial investment and variable cost makes air-coolers a better
Room AC Refrigerator Washing FPD TV Air Cooler alternative to other cooling appliance viz., air-conditioning units
Machine  Government’s push of electricity for all is expected to provide an
impetus for increasing demand for consumer durables in rural and
India Global
semi-urban areas

Source: Company, IMF, Axis Securities, Amber Enterprises RHP

6
 27 FEB 2019 Company Report

Symphony Ltd
Industry wide demand drivers (cont.d) Sector: Consumer Durables

Increased electrification:
Rising per capita income:
Power has reached every
The per capita income,
village & household in the
which is the crude indicator
country. Densely populated
of prosperity of a country
states viz., Bihar, UP, MP
has been reported at USD
etc have been beneficiaries
1964 and is expected to
of the electrification. Rising
cross $2000 in 2018.
purchasing power coupled
Study has shown that the
with electrification is
discretionary spends rise
expected to drive the
sharply as the per capita
demand for consumer
income crosses $2000.
durable goods like coolers.
Untapped opportunities:
Rising temperature
Rising temperature has necessitates cooling
Export opportunity:
made coolers a necessity in solutions:
summer; nearly 55% of the High temperatures in
India has been witnessing
population lives in hot and summer is not restricted to
rise in summer temperature
dry climatic conditions. Not India, it has been a global
making application of
more than 15% of the phenomenon. The
cooling solution a must.
households own cooler thus developed, developing &
Cost effective cooling
making it an enviable under-developed nations
solutions viz., air coolers
growth opportunity. demand low cost (both
becomes the first choice for
Moreover, a large part of investment and variable)
consumers given the
market (~70%) is still solutions to beat the heat.
seasonal need in 3 months
dominated by unorganized
of summers
segment.

Residential cooling dominates (FY18)  Having established ‘Symphony’ as a synonym to cooling, Symphony Ltd has now targeted the
business opportunities outside the residential space into commercial and industrial cooling.
Residential  Prior to acquisitions of Mexico, China and Australia, Symphony Ltd was exclusively a cooling
Air product company focused on domestic sales and exports of coolers. With these acquisitions, the
Cooler, company has progressively evolved into cooling technology company with product agnostic
92% approach.
 Currently, the residential air-coolers segment account for lion’s share in the revenues; going
Industrial
forward, the share of commercial and industrial cooling segment is expected to increase
& Ducted,
 Low investment cost (40% of the cost required for centralized air-conditioning) and maintenance cost
8% along with low power consumption (almost 1/10th compared to A/Cs) by Industrial air coolers
makes them most sought after cooling solutions for commercial applications, thus offering immense
business opportunity
 As per management, the industrial and commercial air-cooling business opportunity is likely to be
Residential Air Cooler Industrial & Ducted more or less at par with the residential cooling segment as far as margins is concerned, though the
Source: Axis Securities, Company opportunity is huge and more essentially, untapped.

7

Air cooling Industry
The brand ‘Symphony’ has an
excellent brand recall, thus creating
a entry barrier for a new entrant.
Efficient after sales service ensures
the stickiness of the clients.
Bargaining Power of Suppliers (Low)
 Air cooler is a technologically sound product
designed keeping in mind aesthetics, comfort
and performance; vendors supplying parts that
goes into making of an air cooler have low
bargaining power as suppliers are fragmented,
lack wherewithal to design, market the product.
‘Symphony’ brand has become
synonymous to air coolers, thus
helping the company capitalize on the
increasing temperature every
summer; products across price points
makes Symphony a top choice to a
marginal customer.
Bargaining Power of Buyers (High)
 There are multiple brands across different
price points, thus giving the consumer a wide
variety of choice.
 Low switching cost makes it easier for the
consumer to compare products on price,
features and post sales service.
 Increasing competition empowers the
consumer with substantial bargaining power
Industry Rivalry (Moderate)
 Intense competition among air cooler
manufacturers
 Low entry barrier, technology adoption,
designs, distribution network and after sales
services differentiates the product amongst the
crowd of air cooler producer
Symphony products have
various features which enables the
appliance serve more than just the
air cooling function thereby
commanding an edge over the
competition
Threat of substitute products (Low)
 Air cooler, being a low priced appliance
compared to ACs, has great potential given
the under penetration in Indian market
 Though seasonal in nature, the need for
cooling cannot be done away with in summer
27 FEB 2019 Company Report
Symphony Ltd
Sector: Consumer Durables
Symphony offers products
across price points & various features,
offering the consumer a wide choice;
efficient after sales service ensures
minimum downtime thus
differentiating itself from the
competition as well as unorganized
segment
Threat of New Entrants (High)
 Seasonality of the product, low capital investment
leads to dominance of local players in the overall
market
 Unorganized players still control around 70% of
the market share
Symphony controls around 50%
of the organized market (crowded by
more than 70 odd brands) despite
premium pricing in all the price
brackets. Extensive distribution
network & high brand recall
differentiates it from both local &
organized players
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 27 FEB 2019 Company Report

Symphony Ltd
Warmer summers ahead… Sector: Consumer Durables

 Indian subcontinent climate is classified under ‘Tropical climate’; Expected increase in global temperature anomaly
though the tropical climate is marked by 12 month mean temperature
of 18 degree Celsius, the extremes can be as high as 50.2 degree
Celsius reported in Nawabshah, a city in southern Pakistan’s Sindh
province on April 30, 2018.
 Global warming, a phenomenon caused by excessive emissions of
greenhouse gases, is responsible for extreme weather be it hot, torrid
summers or chilling winters or even excessive rains and melting of
glaciers in Arctic zones.
 The UN Intergovernmental Panel on Climate Change (IPCC) published
a report saying temperatures are likely to rise by 1.5 degrees Celsius
between 2030 and 2052 if global warming continues at its current
pace. The same was also confirmed by Berkely Earth, California, a
US based non-profit organization.

Global Average Temperature 1850-2017  US-based NASA (National Aeronautics and Space Administration) has
said that Earth’s global surface temperature in 2017 ranked as the
second warmest since 1880 when global estimates became feasible.
 But the real concern lies ahead as NASA’s analysis also emphasizes
that the decades-long warming trend continues—17 of the 18 warmest
years have now occurred since 2001.
 As per the analysis, Earth’s average surface temperature has risen
about 2 degrees Fahrenheit (a little more than 1 degree Celsius) during
the last century (1900-2000) due to increased carbon dioxide and other
human-made emissions into the atmosphere.
 Conclusion: The extremity in climatic conditions is going to persist in
coming future; the variations in temperature is going to be wider, thus
summers are expected to be more warmer while the winters would get
chilling and frosty.
Source : Berkely Earth, Axis Securities

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 27 FEB 2019 Company Report

Symphony Ltd
Air cooling- a pressing need of the time Sector: Consumer Durables

 Cooling has become a necessity; especially in the 3 months of Climate zones of India
summer (in tropical parts of northern hemisphere) starting April to
May of every calendar year it is no more a luxury. The fans (which
has reached 65% of the households) just circulates the air; when Srinagar
this circulated air touches the sweat on the skin, it makes us feel
cool. Thus, fans fail to cool the surroundings necessitating an
additional but cost effective appliance which could cool the
surrounding to beat the hot summer.
 Air coolers which work on evaporation of water technology are
New Delhi
very effective in areas which witness hot and dry climate. Air
coolers become relatively ineffective in areas with high humidity.
 Thus air coolers would be effective in the states of UP, Bihar, Jodhpur
Chhattisgarh, MP, Jharkhand, Maharashtra, Gujarat, Rajasthan,
Punjab, Delhi, Northern Karnataka and western Telengana.
 Evaporative cooling (the principle on which air coolers work) is
Kolkata
effective in low humidity. As relative humidity increases, the
difference between the air temperature (LHS) and the achievable
temperature (yellow & green boxes) keeps decreasing.

Temperature decrease chart for Air coolers

Air Temperature (deg. F)

Hot & Dry

Bangalore Hot & Humid
Composite
Cold
Moderate
Source: Axis Securities

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 27 FEB 2019 Company Report

Symphony Ltd
Air coolers- highly underpenetrated, light on pocket Sector: Consumer durables

 Summer is restricted to 3 months viz., April, May and June for majority of the hot & dry parts of India. Hence, Indian consumer looks for
cooling solution that is within his reach both on initial capital investment and operating cost. Fan- either ceiling or table fan, happens to be
the first choice given the low price, power consumption and lifetime maintenance cost.
 An air cooler happens to be the first cooling solution that people purchase as and when they graduate from a fan; centralized air cooling is
used in the homes of ultra-rich, even in homes and hotels/ commercial complexes that are centrally air-cooled.
 Unlike air conditioners, air coolers are light on the pocket both at the time of purchase and the power consumed in running the appliance; it
is environment friendly, portable and doesn’t overcool. Rising disposable incomes, hot summers and improved availability of electricity are
likely to support the burgeoning demand for sophisticated cooling solutions, coolers being the first choice.
 Symphony will benefit from the likely shift in demand to the branded category after GST implementation. The long-term prospects of
Symphony are quite positive with the company having multiple growth and earnings drivers

~14.3 Cr HHs (~58% total HHs) reside in Air coolers score over air-conditioning units for both capital and variable costs
hot & dry climate areas Fans Air cooler AC
Initial Investment (Rs.) 500-3,000 4,000-20,000 25,000-50,000
Power cost per hour of usage
Rs 0.38@ 75W Rs 0.5@ 100W Rs 10.5@ 2100W
(Rs/hour) (assuming Rs 5/unit)

Refrigerants No Water Air polluting refrigerants

AC: 0.9 Cr
Decrease in temperature No Yes Yes
Air Coolers: Re-circulates same dry,
Circulates same air, Fresh filtered clean, cool
stale air; needs regular
2.7 Cr HHs Indoor Air quality & air inefficient & not very air with powerful air
cleaning, unclean filters
circulation effective in hot summers delivery of 1500 to 2000
may cause respiratory
esp. in spacious rooms cu.mtr/hr
problems
No Fans: 8.3 Cr HHs
Environmentally harmful
Emission No No
greenhouse gases

Complicated and
Maintenance Smple & Cost effective Smple & Cost effective
expensive
Fans: 16.4 Cr HHs Portability/ Ease of installation No Yes No
Usage Indoor & Outdoor Indoor & Outdoor Only indoor
Source: Industry, Company, Axis Securities

11

What differentiates Symphony from its peers
 After Sales service is crucial for
customer retention. Timely and
resourceful after sales service makes
Symphony a formidable player in the
air cooler segment.
 Being a crucial appliance to beat the
hot summers, the management has to
ensure as little downtime as possible
at customer’s end.
 An efficient and timely service helps
the company create goodwill and
gives word of mouth publicity, thus
not only retaining its customers but
helping enhance the customer base.
 Company has 1,000 plus service
centers to serve 19,000 pin-codes
 Symphony enjoys around 50% of the
organized air cooler market; the
management outsources
manufacturing thus concentrating on
the R&D, designing and marketing.
 Sticking to its core DNA of producing
coolers, the company focuses on
producing innovative products
keeping competition at bay
Innovation in products, high brand recall coupled with wide distribution network and efficient after sales service makes
Symphony a formidable player in growing air coolers market
27 FEB 2019 Company Report
Symphony Ltd
Sector: Consumer Durables
 Symphony products feature extensive
Leader in customer Leader in terms usage of technology and innovation to
centric issues of innovation keep the products ahead of the
competitors. At the same time, the
company ensured low per unit cost
and improved efficiency to protecting
its margins
 The products provide more value for
money invested vis-à-vis competition,
thus ensuring satisfied customer .
 The company sells any of its SKU for
around 2-3 seasons after which it is
upgraded; company generally derives
20-30% of revenues every year from
the newly launched products.
 Symphony has highest brand recall
amongst its peers, thus helping them
position its products differently than its
competitors.
 Rich brand recall coupled with wide
network of ~30,000 dealers covering
Leader Leader in brand and 5,000 plus towns helps the company
in management category status reach the nook and corner of the
country
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 27 FEB 2019 Company Report

Symphony Ltd
One product- many functions Sector: Consumer Durables

 Symphony has distinguished its product basket from the competitors

using technology and adding more punch, value to the product than
run-of-the-mill cooling function, thus making it more of a consumer
lifestyle or digital product.
 The company has been successful in positioning the cooler which
used to be considered as peripheral cooling product into a
‘neighbours’ envy, owner’s pride’ by marrying technology,
aesthetics and utility into their product

 Symphony has been pioneer in developing never heard of premium

range of cooling products (> Rs 10,000 per unit) and selling like hot
cakes, thus raising bar for the competition

 Quality innovations helped the company position air coolers as

perennial product; various novel features are integrated into the
latest range of Symphony Air coolers. It includes:
 Digital touch screen
 Voice Assist
 Ultrasonic Mosquito Repellent
 i-Pure Technology- multistage air purification
 Electronic humidity control
 Wall mounted Air cooler resembling an air conditioner
 Magic fill- automatic water filling
 Removable tank
 Cool flow dispenser
 Power saver technology

 Despite creating a differentiated product, Symphony Ltd has ensured

that their products are priced low enough to trigger an upgrade from
fans to coolers and attractive enough with air-conditioner like
features to generate value addition.
Source: Company, Axis Securities

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 27 FEB 2019 Company Report

Symphony Ltd
Centralized Air-cooling – a BIG opportunity Sector: Consumer Durables

 The ideal temperature at workplace, according to a research study, should be

between 24-30°C. The average ambient temperature has been rising steadily over
last couple of decades. Although the difference is only a few degrees, it can
change the work environment drastically. Countries across the globe have
mandated temperatures for workers. E.g. South Korea has mandated a
temperature of 24°C for its workers, New Zealand laws recommend a
temperature band of 18-24°C while US recommends a range of 20-24°C.
 These days shop floor workers wear more protective gear— helmets, masks or
other apparatuses because of heightened attention to employee safety. As a result,
high workplace temperatures make the same task more onerous and sometimes
more exhausting. Even a reduction of 3-4°C in shop floor temperature can
enhance productivity by 25-30%.

Central air cooling solutions- a long runway

Opportunity and Size
Factories Universities
Warehouses Lecture halls
Shops and Showrooms Service Stations
Religious Institutions Offices
Central Air cooling Solution
Club House Poultry and dairy farms
Residence Departmental Stores
Lounges Diesel Generator Rooms
Canteens Laundry
Guest Houses Kitchens
Banquet Halls Malls
Range of Packaged Air Coolers Windows Air Cooler range
Source: Company, Axis Securities

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 27 FEB 2019 Company Report

Symphony Ltd
Centralized Air-cooling – a BIG opportunity (cont.d) Sector: Consumer Durables

Packaged / Central Air Cooling Solutions Central air cooling solutions- facts and figures
Effective Temp © 24 27 29 32 35 38 41

Loss of work
3% 8% 18% 29% 45% 62% 79%
Output

Loss of Accuracy 0% 5% 40% 300% 700% >700%

Source: Study of NASA. “Comfort conditioning the Plant with Evaporative Cooling” Plants
Engineering July 8, 1976

 Excessive heat in a manufacturing or warehouse environment has negative effects on workers, the production levels and even the quality of
goods produced or stored goods. An increasingly hot working environment can result in severe slowdown in production, the impact can be
either tangible or intangible. E.g. Employee sickness/absenteeism are tangible results while low productivity or defective job work due to
uncomfortable working conditions are the intangible outcomes.
 Heat can affect the health of employees and also impact the health of the equipment. According to Arrhenius Equation, an electronic device
can operate for 32 years at 45°C but will last just four years at 80°C. Frequent replacement of equipment could lead to higher capex and
operating costs, thereby hurting company’s bottom line.
 Machinery too produces extra heat and poor ventilation or cooling mechanisms can exacerbate the issue. Excessive heat can hurt production
levels by causing equipment to operate less efficiently or break down frequently. When equipments fail due to excessive heat, it becomes
difficult to identify the cause as the damage is often internal and prima facie, the damaged components appear to function correctly. It takes
detailed testing and analysis to locate the damage leading to more downtime and lost productivity, thereby adding to the cost.
 Evaporative cooling systems have the potential to reduce temperatures by 10-15°C, thus making it an ideal, cost effective way to address the
rising temperature issue on shop floors. Only caveat these coolers work effectively in dry climates, humidity should be below 60% for these
types of coolers to work best. In order to benefit from this increased productivity, companies are bound to spend on air cooling solutions for
their factories, thereby opening up a multi-million units market for Symphony Ltd which happens to be the only branded player in the organized
space. As per the company, the opportunity size of centralized air-conditioning market in India is estimated to be worth approx. Rs 4,000 cr.;
the value of centralized air-cooling market is undefined (potentially higher than Rs 4,000 cr.).

15
 27 FEB 2019 Company Report

Symphony Ltd
Marquee customers- Centralized air-cooling Sector: Consumer Durables

Source: Company, Axis Securities

16
 27 FEB 2019 Company Report

Symphony Ltd
Milestones Sector: Consumer Durables
Acquired
Climate Technologies Launched world’s Unveiled the world’s Recognition from the Government
Pty Ltd (Australia) 1 st wall mounted air cooler 1st packaged air cooler of India for R&D center

Established foothold in
Acquired Keruilai (China) Started offering central
all formats of modern retail air cooling solutions in India

2018 2017 2016 2015 2013 2012

2011

Acquired IMPCO 2009-

(North America) 2011

2009

1995- Pre- 2002- Post- Scaled up

1988 1994
2000 2005
2000 2005
2007 2005s international presence

Symphony born with Ventured into the manufacture of ACs, Suffered financial
one air cooler model washing machines and other durables stress and restructured

Got listed on Positioning: Strategic Focus:

stock exchanges ‘Many products – One market’ ‘One product –Many markets’

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 27 FEB 2019 Company Report

Symphony Ltd
Global warming – an International Cooling opportunity Sector: Consumer Durables

 Knowing fully well that the Indian market is underpenetrated for air
Comparison of temperatures from 1880 till Oct.2018
coolers, Symphony management did not restrict themselves to
Indian markets; they made overseas foray as the opportunity came
their way, be it exports or acquisitions (at reasonable valuations),
as the temperature variations are not country specific problems.
Today, Symphony has a presence in over 60 countries.
 Extreme and unpredictable heat waves brought on by climate
change is not limited to India. Shift in weather patterns leading to
climate changes is a consequence of man-made global warming.
 The chart besides shows the average global temperatures
throughout the year starting 1880 till Oct.2018; it must be noted
that the blue lines are for the temperatures in early part of 20th
century while the red lines are for last 18 years after year 2000.
The global average temperatures are higher anywhere around 1°C  Temperatures crossing 28°C (82.5°F) (the definition of overheating
in 21st century compared to the same period in 20th century. under modern UK building rules) makes it unbearable for the UK
 According to the World Meteorological Organization's (WMO) population. According to a study, heat-waves in the UK are up to
observations, 2016 was the warmest year on record (indicated by three times more frequent now than at the end of the 19th century,
red line at the top in the chart beside) with a central estimate of the duration of heat-waves has also increased two to threefold. UK
1.15°C above the average calculated since 1850. 2018 is likely is now an important overseas market for Symphony coolers.
to be the fourth warmest on record (indicated by dark red line) with  Middle East, Africa are Symphony Ltd’s core market in addition to
the Earth's average temperature hovering close to 1°C above the India. Air coolers working on evaporative cooling technology can
levels recorded in 1850-1900. UK Met Office has predicted that cool huge open spaces and even outdoors. Symphony’s has
the global average temperature for 2019 will likely be 1.1°C successfully undertaken its biggest cooling project at Mecca — the
higher than the pre-industrial average period from 1850-1900. biggest air cooler project anywhere so far. Symphony has air-
 In 2010, Russia was hit by an unprecedented and deadly heat cooled entire Mecca complex by installing 50,000 units in the
wave, the temperatures in Moscow had crossed 37°C. Soon after, residential section; it also has installed 200 giant coolers on the
Russia has been an important export market for Symphony. Jamarat Bridge, Meena, Saudi Arabia which is crossed every year
by millions of pilgrims.
Source: NOAA, Axis Securities

18
 27 FEB 2019 Company Report

Symphony Ltd
International acquisitions to drive earnings Sector: Consumer Durables

 In 2009, Symphony acquired the Mexican assets of International IMPCo Distribution presence
Metal Products Company (IMPCo), Phoenix, US based company
that has been producing coolers since the 1930s. Its manufacturing
facilities in Mexico have opened up new markets in USA & Latin
America.
 IMPCo was acquired because of the deep knowledge that it
possessed in industrial coolers, a segment where Symphony was
absent. Marrying the knowledge and experience from IMPCo with
the design, style, and aesthetics of Symphony has been a
synergistic fit.
 Further, IMPCo adopted an asset light model of Symphony by
outsourcing operations to third party and focusing on brand
building and marketing. It has successfully made transition to asset
light, outsourced based manufacturing model in FY18 (Project
Renovation started in FY15) and reported profit before tax of 39.6
mn Mexican Pesos.
 IMPCo has wide product basket including commercial / industrial
cooling systems which are suitable for workshops, restaurants,
gyms and indoor stadiums etc. The acquisition helped Symphony
get enlisted with marquee US based large format retail clients viz.
Walmart, Home Depot, Lowes, Costco, Coppel, Soriana, Sears,
etc. The acquisition has helped Symphony to leverage IMPCo's
relationship with these large format stores to market its popular
residential air coolers in US.
 During the year, the Mexican subsidiary developed and launched
a first “All Plastic” window cooler in the Mexico market which
received a very good response. The company has charted out a
new vision which seeks accelerated growth in the next 3 years, Presence
mainly with the incorporation of new product lines.

19
 27 FEB 2019 Company Report

Symphony Ltd
International acquisitions to drive earnings (cont.d) Sector: Consumer Durables

 Symphony acquired China-based Munters Keruilai Air Treatment Share of revenue of overseas operations to increase in future
Equipment (MKE), Guangdong for Rs 1.5 crore ($234,000) in 2016.
MKE produces energy-saving and environment-friendly evaporative air 100%
coolers under brand ‘Keruilai’, a market leading brand in China. 80%
Renamed as Guangdong Symphony Keruilai (GSK) Air coolers Ltd. China,
the acquisition boasts one of the world’s best repositories in industrial 60%
cooler knowledge, patents and product development.
40%
 Post acquisition by Symphony, the Chinese subsidiary has developed and
introduced several new products for industrial, commercial as well as 20%
household applications, and, also developed several new markets - both 0%
domestic as well as international.
FY16 FY17 FY18 FY19E FY20E FY21E
 GSK products have also been successfully introduced to Symphony’s 9 months
already established markets of India and Mexico, and, are very well
received in these markets. The acquisition also helped Symphony increase Domestic Operations Overseas Operations
exports of its air coolers, especially to ASEAN markets via China which
has FTAs in these markets.
 The company MKE, China, which was loss-making at the time of Revenues & profitability of overseas operations expected to improve
acquisition, has already broken even in 9M ending Dec.2018 (9MFY19);
both the top-line and bottom-line is improving and is expected to provide 600 530
485
steady growth in future
364
 Symphony acquired 95% equity stake in Australia based Climate 400
Technologies Pte. Ltd. in 2018. The acquired company is one of
Australia’s most recognized manufacturers of cooling and heating 200 148
127
appliances; it commands 35% and 29% market share of the domestic 79 54
9.2 16 30 41
Australian evaporative air coolers and ducted gas heaters markets, 4.6
respectively. 0
 The acquisition of Climate Technologies Pte. Ltd. would help Symphony -0.5 -5.7
Ltd to moderate its business risks as Australia has complementary weather -200
conditions compared to India i.e. when there is summer in northern FY15 FY16 FY17 FY18 FY19E FY20E FY21E
hemisphere, Australia or Southern hemisphere experiences winter and
9 months
vice-versa. Moreover, Climate Tech. manufactures both heating and
cooling appliances thereby supplying products required round the year to Revenues (Rs cr.) PAT (Rs. cr.)
the target market.

20
 27 FEB 2019 Company Report

Symphony Ltd
Asset light business model scores over the competition Sector: Consumer Durables

Asset light business model ensures robust return ratios  Symphony operates on asset light business model requiring low capital
80 investments; it outsources almost all its production to nine different OEMs
thus ensuring that it is not dependent on any one vendor.
60  This asset light strategy enables the management to concentrate on
design, development and innovation along with marketing the product
40 thus generating high return on capital employed (RoCE)
 Focusing on single product viz., air-coolers helps them to keep away
20
from the other product related distractions and deliberate their energies
on developing variants of air-coolers with different features to suit the
0
changing needs of the consumer.
FY16 (9 FY17 FY18 FY19E FY20E FY21E
months)  Company boasts of 50 plus models of air-coolers and wide range of
RoE (%) RoCE (%)
industrial and commercial coolers

High Inventory turnover Sales to Fixed assets have been improving consistently
9.0 14
8.5 12
8.0 10
7.5 8
7.0 6
6.5
4
6.0
2
5.5
5.0 0
FY16 FY17 FY18 FY19E FY20E FY21E FY16 FY17 FY18 FY19E FY20E FY21E
9 months 9 months
Inventory Turnover ratio Sales to Gross Fixed Assets Sales to Net Fixed Assets

Source: Company, Axis Securities

21
 27 FEB 2019 Company Report

Symphony Ltd
Stabilizing margins and stable WC cycles to boost profitability Sector: Consumer Durables

Margins are stabilizing… Stable working capital cycle

35% 75

30%
25% 55

20%
35
15%
10%
FY15 FY16 FY17 FY18 FY19E FY20E FY21E 15
9 months FY15 FY16 FY17 FY18 FY19E FY20E FY21E
9 months
EBIDTA margins (%) Net Profit Margins (%) Inventory Days Debtors Days Creditors days Cash Conversion Cycle

Consistent spends on advertisements  Given the brand recall commanded by the company with its customers,
the distributors keep purchasing the air-coolers even in off-season paying
50 6% 100% in advance to take benefit of discounted prices offered by the
40 5% company in the off-season i.e. quarter Q2 and Q3 of every financial
4% year. Company follows the plan of increasing its prices every fortnight
30 as the season approaches.
3%
20  The cash conversion cycle for Symphony Ltd was around 42 days at the
2% end of FY18. The cycle has stabilized post the change in the accounting
10 1% year made in FY16. The company enjoys debtors days of 28 days but
payables are paid in 37 days a testimony of faith reposed by the dealers
0 0% and distributors in their products.
FY16 FY17 FY18 FY19E FY20E FY21E
 The margins are stabilizing post change in accounting year and
9 months
improving profitability of the acquisitions.
Advertisement spends (Rs cr.) (LHS)  Company has policy of consistent advertisement spends esp. in the
Advertisement spends as % of Sales (RHS) season which acts as an investment in long run and helps it protect its
market share.
Source: Company, Axis Securities

22
 27 FEB 2019 Company Report

Symphony Ltd
Turnaround in acquisitions to help improve profitability Sector: Consumer Durables

 Overseas acquisitions would help Symphony Ltd to chart path of growth Steady growth in revenues and earnings of overseas acquisitions
both on topline and bottom-line. The acquisitions has brought industrial/
commercial air cooling technology with them, thus helping Symphony Ltd to 600 530
spread its wings beyond residential air-coolers and bid for the business 485
opportunities in this untapped space in India. Moreover, these companies
also offer Symphony Ltd with an entry into lucrative American market with 400 364
widely diversified product portfolio ranging from residential cooling to
commercial cooling.
200 127 148
 The overseas acquisition done by Symphony Ltd in the past are showing 79
trends of profitability. The Mexican subsidiary is reporting profits from 54 30 41
4.6 9.2 16
FY16 onwards while the Chinese subsidiary has turned around in 9 month 0
ending Dec.’18. The recent acquisition of Australian subsidiary is already a
profit making entity and offers Symphony Ltd an opportunity to cross sell its
FY15 FY16 FY17 FY18 FY19E FY20E FY21E
products in both Australian and American continent. Similarly, it enables 9 months
de-risking of business as Australian weather is complementary to Indian
sub-continent weather. Revenues (Rs cr.) PAT (Rs. cr.)

Debt/Equity ratio (x)  Symphony Ltd has been net-cash (almost debt free) company in FY18.
0.25 0.23 The recent Australian acquisition has led to debt on the books of the
Australian subsidiary which would be serviced using the proceeds from
0.20 0.18 Australian operations; even post acquisition, the company is in net-cash
position.
0.15
0.15  The debt/equity (D/E) has consistently been far below 1x; the interest
coverage ratio is in mid twenties indicating better financial health of the
0.10 company
0.05 0.05
0.05  The cash on the books is deployed into Debt MFs and arbitrage funds
0.01 yielding upwards of G Sec yields for the company.
0.00  The management plans to deploy the cash for any good acquisition
FY16 FY17 FY18 FY19E FY20E FY21E opportunity or distribute it among the shareholders through dividends
9 months and share buyback at appropriate time.

Source: Company, Axis Securities

23
 27 FEB 2019 Company Report

Symphony Ltd
Weak quarter but the core competency remains… Sector: Consumer Durables

Quarterly Performance (Q3FY19)  Symphony Ltd reported a weak set of quarterly results for Q3FY19, which
Quarterly Performance happens to be an off-season. Company reported 9% YoY growth in
consol. Sales, 41% YoY de-growth in EBIDTA and 43% YoY de-growth in
(Rs.Cr.) % Change % Change
Q3FY19 Q3FY18 Q2FY19 profit after tax for Q3FY19 on back of high channel inventory owing to
(YoY) (QoQ)
two back to back weak summers.
Sales 240 219 9 223 8
Other Inc 13.0 13.1 NA 9.0 NA  Cashing on its core competency- the product, brand and product range,
the off season sales over last 6 months has been done on 100% advance
Total Revenue 253 232 9 232 9
and the company has maintained its leadership with 90% plus market
share in off-season sales.
Expenditure
Net Raw Material 85 12 597 55 55  After two consecutive bad summers in 2017 & 2018, the channel
inventory has now normalized in majority of the domestic market except
Purchase of goods 44 87 (50) 60 (27)
few pockets like Karnataka.
Personnel 29 19 55 29 0
Other Exp 39 20 95 36 8  The business for overseas subsidiaries is improving- China has posted
Total Expenditure 197 138 43 180 9 marginal profit for the first time in 9MFY19 thus ensuring that the
company is on path of recovery and steady growth. GSK, China
reported topline of Rs 47 cr, EBIDTA of Rs 2.7 cr and PAT of Rs 0.36 cr.
EBIDTA 56 94 (41) 52 8
for 9MFY19
Non-operating Income 0.0 0.0 NA 0.0 NA
Interest 3.0 0.8 280 1.0 200
 Q3 is an off season for Mexican subsidiary- IMPCo; for 9MFY19, IMPCo
reported revenues of Rs 60 cr, EBIDTA of Rs 4.7 cr (excluding
Depreciation 2.0 1.8 10 3.0 (33)
exceptional income) and PAT of Rs 3.94 cr (excluding exceptional
Exceptional Item 0.0 0.0 NA (4.0) NA
income).
PBT 51 92 (44) 44 16
Tax 14.0 27.3 (49) 13.0 8
 Symphony Ltd had acquired Climate Tech. Pte, Australia on July 1, 2019.
Hence at the end of 6 months ending Dec.’18, CT Australia reported
PAT 37.0 64.6 (43) 31.0 19
revenues of Rs 141 cr, an EBIDTA of Rs 9.23 cr and PAT of Rs 4.13 cr.
Oth. Comprehensive Income
(1.0) (0.8) (4.0)
(net of taxes)  All eyes would now on be the upcoming summer season given that the
Total Comprehensive Income 36.0 63.7 (44) 27.0 33 last two summers were failures as far as the cooling and air-conditioning
EPS (Rs.) 5.3 9.2 (42.7) 4.4 19
sector is concerned.

Source: Company, Axis Securities

24
 27 FEB 2019 Company Report

Symphony Ltd
Valuation Charts Sector: Consumer Durables

One year forward P/E fan chart Valuation

 Symphony Ltd is well positioned in the air-coolers industry owing to
2000
its well established brand with high recall, asset light business
1500 model, substantial market share and growth in demand for the
product on back of improving affordability.
1000
 We estimate the company to grow at a CAGR of 17% and
500
earnings at CAGR of 11% over FY18-FY21E (FY19 is expected to
0 show de-growth). When computed over FY19E-FY21E, we estimate
the company to post robust growth of 18% CAGR in revenues and
Jul-14

Jul-15

Jul-16

Jul-17

Jul-18
Mar-14

Mar-15

Mar-16

Mar-17

Mar-18
Sep-14
Nov-14

Sep-15
Nov-15

Sep-16
Nov-16

Sep-17
Nov-17

Sep-18
Nov-18
Jan-15

Jan-16

Jan-18

Jan-19
May-14

May-15

May-16

Jan-17

May-17

May-18
29% CAGR in earnings.
 We value Symphony Ltd at 45x FY21E to arrive at price target of
Price 20x 30x 40x 50x
Rs 1,680 giving an upside of 37%

12mth forward P/E band Key Risks

90  Single product with seasonality: The business of Symphony Ltd is
highly dependent on single product viz., air-coolers which has
70 seasonal sales i.e. the end-users purchase the air-coolers only in
summer.
50
 Competition from unorganized segment: Air-cooler market is
dominated by unorganized with 70% market share who are local
30
players with contained costs. Entry of more players in organized
segment where Symphony is a leader can create more
10
competition.
Mar-14
May-14

Mar-15
May-15

Mar-16
May-16

Mar-17
May-17

Mar-18
May-18
Jul-14
Sep-14

Jul-15

Jul-17

Jul-18
Nov-14
Jan-15

Sep-15

Jul-16
Nov-15
Jan-16

Sep-16
Nov-16
Jan-17

Sep-17
Nov-17
Jan-18

Sep-18
Nov-18
Jan-19

 Unfavourable forex movement: A big chunk of consolidated

revenues are sourced from overseas market. Unfavourable forex
PE Mean Mean+1Stdev Mean-1Stdev
movement may impact profitability of consolidated entity.

25
 27 FEB 2019 Company Report

Symphony Ltd
Financials Sector: Consumer Durables

Profit & Loss (Rs Cr) Balance Sheet (Rs Cr)

YE March FY17 FY18 FY19E FY20E FY21E YE March FY17 FY18 FY19E FY20E FY21E
Net sales 765 798 920 1,145 1,289
Total assets 497 653 945 1,146 1,380
Other operating income 0 0 0 0 0
Net Block 75.6 77.9 97.9 97.0 95.5
Total income 765 798 920 1,145 1,289

CWIP 0.0 0.0 7.5 5.0 5.0

Cost of goods sold 525 546 691 806 907

Investments 110 177 299 299 299
Contribution (%) 31.4% 31.6% 24.9% 29.6% 29.6%
Wkg. cap. (excl cash) 265 376 405 412 420
Advt/Sales/Distrn O/H 41.2 32.8 33.9 41.6 41.3
Cash / Bank balance 47 23 135 333 560

Operating Profit 199 219 196 298 340

Other income 43 54 39 41 50
Capital employed 497 653 945 1,146 1,380
PBIDT 242 273 234 338 390
Equity capital 14.0 14.0 14.0 14.0 14.0
Depreciation 7 7 10 11 12

Interest & Fin Chg. 0 2 7 13 13 Reserves 451 598 735 936 1,169

E/o income / (Expense) 0 0 (4) 0 0

Minority Interests 0.0 0.0 4.0 4.0 4.0
Pre-tax profit 235 265 213 315 366
Borrowings 26 33 175 175 175
Tax provision 69 72 56 90 104

Profit after Tax 166 193 157 225 261 Def tax Liabilities 5.3 8.9 16.4 17.4 18.4

Source: Company, Axis Securities

26
 27 FEB 2019 Company Report

Symphony Ltd
Financials Sector: Consumer Durables

Cash Flow (Rs Cr) Ratio Analysis (%)

YE March FY17 FY18 FY19E FY20E FY21E YE March FY17 FY18 FY19E FY20E FY21E

Sources 129 100 291 212 245 Sales growth 71.6 4.4 15.3 24.4 12.6
OPM 26.0 27.5 21.2 26.0 26.4
Cash profit 173 201 174 248 286
Oper. profit growth 46.0 10.4 (10.8) 52.2 14.4
(-) Dividends 105 56 19 19 25 COGS / Net sales 68.6 68.4 75.1 70.4 70.4
Overheads/Net sales 5.4 4.1 3.7 3.6 3.2
Retained earnings 68 145 155 229 261
Depreciation / G. block 3.8 5.1 6.1 6.3 6.3
Issue of Equity 7.0 0.0 0.0 0.0 0.0
Effective interest rate 0.2 NA 6.9 7.4 7.5

Change in Oth. Reserves (12.2) (10.6) 4.0 0.0 0.0 Net wkg.cap / Net sales 0.19 0.40 0.42 0.35 0.32
Net sales / Gr block (x) 4.2 6.0 5.6 6.6 7.0
Borrowings 0 0 132 0 0
RoCE 58.1 48.7 29.3 32.6 31.0
Others 66 (34) 0 (17) (16) Debt / equity (x) 0.05 0.05 0.23 0.18 0.15

Applications 129 100 291 212 245 Effective tax rate 29.2 27.3 26.4 28.5 28.6
RoE 39.6 34.6 21.7 25.3 23.5
Capital expenditure (6.3) (47.9) 174.6 7.5 10.0
Payout ratio (Div/NP) 33.5 10.0 12.7 11.3 11.1
Investments (71.0) 67.0 (14.9) 0.0 0.0 EPS (Rs.) 23.8 27.5 22.4 32.1 37.3
EPS Growth 40.5 15.8 (18.5) 43.2 16.2
Net current assets 206.1 105.1 19.3 6.3 8.5
CEPS (Rs.) 25.0 28.1 22.9 32.7 37.9
Change in cash 0.1 (24.4) 112.4 198.2 227.0 DPS (Rs.) 8.0 2.7 2.7 3.5 4.0
Source: Company, Axis Securities

27
 27 FEB 2019 Company Report

Symphony Ltd
Disclaimer Sector: Consumer Durables

Disclosures:

The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).

1. Axis Securities Ltd. (ASL) is a SEBI Registered Research Analyst having registration no. INH000000297. ASL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of
providing Stock broking services, Depository participant services & distribution of various financial products. ASL is a subsidiary company of Axis Bank Ltd. Axis Bank Ltd. is a listed public
company and one of India’s largest private sector bank and has its various subsidiaries engaged in businesses of Asset management, NBFC, Merchant Banking, Trusteeship, Venture Capital,
Stock Broking, the details in respect of which are available on www.axisbank.com.
2. ASL is registered with the Securities & Exchange Board of India (SEBI) for its stock broking & Depository participant business activities and with the Association of Mutual Funds of India (AMFI) for
distribution of financial products and also registered with IRDA as a corporate agent for insurance business activity.
3. ASL has no material adverse disciplinary history as on the date of publication of this report.
4. I/We, Pankaj Bobade– AGM, Research, CFA (ICFAI), author/s and the name/s subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect
my/our views about the subject issuer(s) or securities. I/We also certify that no part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or
view(s) in this report. I/we or my/our relative or ASL does not have any financial interest in the subject company. Also I/we or my/our relative or ASL or its Associates may have beneficial
ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Since associates of ASL are engaged in various
financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject company/companies mentioned in this report. I/we or my/our
relative or ASL or its associates do not have any material conflict of interest. I/we have not served as director, officer or employee in the subject company in the last 12-month period.
Any holding in stock – No
5. ASL or its associates has not received any compensation from the subject company in the past twelve months. ASL or its Research Analysts has not been engaged in market making activity for the
subject company.
6. In the last 12-month period ending on the last day of the month immediately preceding the date of publication of this research report, ASL or any of its associates may have:
i. Received compensation for investment banking, merchant banking or stock broking services or for any other services from the subject company of this research report and / or;
ii. Managed or co-managed public offering of the securities from the subject company of this research report and / or;
iii. Received compensation for products or services other than investment banking, merchant banking or stock broking services from the subject company of this research report;

ASL or any of its associates have not received compensation or other benefits from the subject company of this research report or any other third-party in connection with this report

Term& Conditions:

This report has been prepared by ASL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in
any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of ASL. The report is based on the
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report at the same time. ASL will not treat recipients as customers by virtue of their receiving this report.

Instead of a company visit, we have done a conference call with the company’s management.

28
 27 FEB 2019 Company Report

Symphony Ltd
Disclaimer Sector: Consumer Durables

DEFINITION OF RATINGS
Ratings Expected absolute returns over 12-18 months
BUY More than 10%
HOLD Between 10% and -10%
SELL Less than -10%
NOT RATED We have forward looking estimates for the stock but we refrain from assigning valuation and recommendation
UNDER REVIEW We will revisit our recommendation, valuation and estimates on the stock following recent events
NO STANCE We do not have any forward looking estimates, valuation or recommendation for the stock
Disclaimer:
Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to the recipient’s specific circumstances. The securities and strategies
discussed and opinions expressed, if any, in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific
recipient.
This report may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this report should make such investigations as it deems necessary to arrive at an independent evaluation of
an investment in the securities of companies referred to in this report (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. Certain transactions,
including those involving futures, options and other derivatives as well as non-investment grade securities involve substantial risk and are not suitable for all investors. ASL, its directors, analysts or employees do not take any
responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any action taken on basis of this report, including but not restricted to, fluctuation in the prices of shares and bonds,
changes in the currency rates, diminution in the NAVs, reduction in the dividend or income, etc. Past performance is not necessarily a guide to future performance. Investors are advice necessarily a guide to future performance.
Investors are advised to see Risk Disclosure Document to understand the risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements
are not predictions and may be subject to change without notice.
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ASL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should be aware that ASL may have a potential conflict of
interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. ASL may have issued other reports
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Neither this report nor any copy of it may be taken or transmitted into the United State (to U.S. Persons), Canada, or Japan or distributed, directly or indirectly, in the United States or Canada or distributed or redistributed in
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investors.
The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. The Company reserves the right
to make modifications and alternations to this document as may be required from time to time without any prior notice. The views expressed are those of the analyst(s) and the Company may or may not subscribe to all the views
expressed therein.

Copyright in this document vests with Axis Securities Limited.

Axis Securities Limited, Corporate office: Unit No. 2, Phoenix Market City, 15, LBS Road, Near Kamani Junction, Kurla (west), Mumbai-400070, Tel No. – 022 – 4050 8080 / 022 – 6148 0808, Regd. off.- Axis House, 8th
Floor, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai – 400 025. Compliance Officer: Anand Shaha, Email: compliance.officer@axisdirect.in, Tel No: 022-42671582.

29