Symphony Limited (SYMPHONY) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q3 FY26 Earnings Conference Call of Symphony Limited, hosted by Smith's Institutional Equity. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation comes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Shraddha Kapadia from Smith Institutional Equities. Thank you and over to you, ma'am.

Thank you, Mishra. Good morning, everyone, and a warm welcome to Q3 FY26 Earning Confidence Call of Symphony Limited. We have with us today the Senior Management Team of Symphony Limited, represented by Mr. Achar Bakery, Chairline and Managing Director, Mr. Nrupesh Shah, Managing Director, Corporate Affairs, Mr. Amit Kumar, Executive Director and Group CFO, and Mr. Rajesh Mishrash, CEO, International Business. I would now like to hand over the call to management. Thank you and over to you.

Good morning, everybody, and welcome to this symphony's quarterly conference call. As we do each time, we will have a short presentation, followed by Q&A, and so we will all be here for the Q&A. The presentation will be done by Nupesh Shah, the managing director of corporate affairs. Thank you very much, Nupesh Bhai. Over to you.

Thank you, and welcome to Q3 conference call of Symphony Limited. So, there is a customary disclaimer statement to start with. So, this is about the symphony stand-alone performance, symphony limited. So, for the quaker, YOY, it has been flattish, that is 182 crore of top line versus 182, previously of December 24. At EBITDA level, it is 31 crore versus 34 crore, mainly on account of elevated advertisement and sales promotion expenses of water heater. At pack level, it stands at 34 crore versus negative 4 crore. Just to remind you, in December 24, we had to take the write-off of pathway and hence it had turned negative considering that exceptional item. In current quarter, we have recovered additional 4 crore from pathway Thank you. Total recovery of 8.5 crores in 70 years, 9 months, vis-a-vis write-off of 50.2 crores, and for residual recovery, necessary strong legal actions. As I shared earlier, now in Symfony India, there are broadly two categories. One is household household, and second is the products, selling around the year, and or counter seasonal products. So, in nine months, ending on 31st December, 25th, Selling round the year have contributed almost 26% of the top line. At this point of time, that is as on 31st December, trade inventory seems to have normalized as it is normally supposed to be at this point of time, mainly on account of revenue contradiction and lower lifting by the trade in September 25 quarter. The board has announced third interim dividend of Rs.2 per share amounting to about 14 crore and total interim dividend during the year about 28 crore. So, coming to stand-alone financials of 9 months, the top line is 566 crore versus 814 crore. Gross profit margin percentage stands at 48.3%. EBDDA at about 81 crore versus 188 crore of previous year for 9 months. And at a PAC level, which is higher than EBITDA, one, on account of Treasury income, secondly, exceptional income, after providing graduate additional provision as per Revised Wages Act, as well as there has been Profit in Forex fluctuation. So, all put together at PBT, it is 123 crore, leading to PAT of 99 crore versus 132 crore of December 24, nine months. So for symphony stand-alone, capital employed in trailing 12 months, days on monthly average stood at 49 crore, translating into ROCE that is PBIT percentage on poor capital employed about 371 percentage. And return on net worth percentage of 19 vs. 24% while Treasury is 460 vs. 488 crore after robust payout last year. And this excludes loans and investments to subsidiaries all in all amounting to 2 million crore. This is 233 crore versus 242 crore. Gross profit margin percentage stands at 48%. YOY down by about 2%. EBDITA, which is a business EBDITA, is 24 crore versus 35 crore. While PAT is 20 crore versus negative 10 crore due to reasons explained earlier. Consul Financials for 9 months. The top line is about 793 crore, that is down by 27% versus 1088 for corresponding period. EBDETA stands at 76 crore, while PAT is at a console level 81 crore versus 134 crore. Employed on a console basis for trailing 12 months is 343 crores, that is all-inclusive symphony stand-alone and subsidiaries, including capital employed in climate technology, translating into ROCE percentage of 54 and return on net worth of 21 percentage. So, yesterday in the board meeting, the IB transaction has been reviewed, and it has been decided to roll back the proposed IB transaction to divest the stake in IMCO Mexico and climate technology. So, as it was updated from time to time, two investment bankers were appointed. There was a global outreach. More than 10 non-disclosure agreements were signed with some of the global consumer durable companies, some of the financial investors. However, on account of evolving geopolitical situation as well as the reasons which we are bound as per NDA, But in nutshell, the valuation offer didn't meet with our valuation expectation as well as broader strategic consideration. And hence, it has been found appropriate to roll back and Symfony will like to nurture the business. And the silver lining is considering The tariff situation, there seems to be a great potential in Mexico as well as United States, and we are already witnessing decent traction. Part 2 regarding this IB transaction. Whatever our financial investments in various forms, whether it is in terms of equity investments, intangible assets, etc., etc., as on 31st March 26, by accounting year, as auditors will advise and guide, appropriate accounting treatment Will be taken, which is quite different from whatever business transformation may happen later on. And that accounting treatment is normally done based on the past actual financial performance. So just as a guidance. Repeatedly, in various forums, we are being asked as to what is Symfony's market standing vis-a-vis some of the published reports. So, we thought it appropriate to take you through very specifics. So, at our primary level, the market size is about 5000 crore. Market comprises of. Different segments or different kinds of the players. Symphony being by far the market leader. There are national players. As per published report, which many of you are aware, and as per the published report, there are eight players having sales in excess of 100 crore. And that too, sales in excess of 100 crore is at. Customer level, not at a company level. In addition to that, the players whose consumer level sales is less than 100 crores, but they call themselves, or many of us understand them as national players, that is third category. Fourth is a regional players. They may have a strong presence in some states or part of the state and then completely fragmented and unorganized market. Organized market share in terms of the value percentage is about 35 percentage. In published report, in research reports, to which we as well as many of you have accepted It accounts for only some of the segments, the segments which it doesn't account for, but that very much forms part of our sales, and that too, that part of the sales constitutes almost 40 to 50 percentage of symphony sales to dealers and distributors, and those segments are rural and semi-urban, e-commerce, Quick Commerce, D2C, Institution Sales. We are clearly excluding large space ventilated cooling from this because that we treat it as product selling around the year or counter-seasonal product. Also to draw your attention, none of other national players at the company level All segments put together have turnover. The second most company's turnover is around 250 crore. These two-four players put together combine household domestic air cooler sales less than symphony sales. And we clearly believe that for us, this is a structured growth story for medium to long term on account of variety of reasons as known and shared from time to time. Some of the data and details is validated by external agencies. So, in terms of the Google rating and review, out of more than 34,000 rating and review, Symfony score is 4.8, by far higher than most others. In terms of the share of voice on TV, because that is authentic data, otherwise we know, all put together, our brand reach far, far higher than number two and number three player. Again, everywhere we have cited the source. Even in terms of the Google search, out of millions and millions of customers who are looking for and searching air cooler, As per Google Analytics from July 24 to June 25, two out of three customers look for Symfony while looking for an air cooler. Again, on our right-hand side, in terms of the market leadership, grant preference, channel partner endorsement, as well as pricing premium, Again, as per each of these reliable external sources, you can see that symphony scores far, far higher than here. Yeah, thank you. So, with this, we can take question and answer.

Thank you very much, sir. We will now begin with the question and answer session. Anyone who wishes to ask questions may press star and 1 on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handsets while asking our questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press star and 1 to ask questions. The first question is from the line of Bala Subramanian from Arihant Capital. Please go ahead.

Good morning, sir. Thank you so much for the opportunities. Sir, on the premium side, 95 to 120 liter categories, I think the market we have seen in input cost, deflation, as well as the market is also clattered. I just want to understand how our competitors are doing in this segment, whether they are doing aggressive discounting to gain market share, and how is our volume growth in this segment, and are we seeing any compression in this premium in recent quarters? These are my first questions, guys.

So, broadly in terms of the premiums that we are talking about, the... See, the market is going into what we call a K-shaped kind of movement, where the lower end of the segment, which is migrating particularly from metal coolers to plastic coolers, that continues to be at a lower price point, and the good news there is that at least the migration from metal to plastic, and in some sense from completely unorganized to regional and some branded segment. So, over time, this is a segment which at this point in time is not at the premium, but we expect The other end is the... The prices have broadly been stable.

Okay, sir. And, sir, like, organized as well as unorganized market are growing at the same rate, or is there any diversion is happening? And how is our growth is coming? It's primarily from market expansion or premier initiations or share gain from organized or unorganized players. What is the split, sir?

A bigger chunk of... From the unorganized to the organized segment. And as I said, the entire metal cooler market is mostly unorganized. So while there is some organic growth even in the traditional and organize to organize MOOC.

So, my last question, like, what percentage of sales is coming from modern trade and e-commerce versus traditional dealers in Q3, and how are margin structures are evolving across these channels, and what investments are being made in direct-to-consumer capabilities to mitigate long-term channel dependency risk?

So, about D2 sales to answer first. It has already turned not only EBITDA, but at a packed level profitable since last year, and at EBITDA level, its profit margin is in line with our GT sales. Coming to specific breakup between traditional channel versus large format stores on account of competitive reasons, we are not sharing the data. And again, coming back to D2C, the kind of investments, whatever investment was to be made, we have already rotated through P&L, and that has been already written off. So, we believe for all such kind of initiatives, including the water heater, which we have launched last year, All such kind of expenditure we prefer to root through P&L, even though the variety of benefits may be a medium term to long term.

Got it, sir. Thank you.

Thank you. The next question is from the line of Shraddha Kapadia from Smith's Institutional Equities. Please go ahead. Hello. Hello.

Yes. Yes. So, I would just like to understand that the India growth which we have, is it majorly because of the cold, air coolers, counter-seasonal products, channel normalization, or are we gaining market share?

In the current quarter, Shazhar, as you know, as someone who knows this sector and tracks it, the current quarter is less about the market share, more about the placement in the channel. So, the October to December is where we place the products in the market, but there is no market share per se that we talk about for this quarter. Also, regarding the channel and the counter-seasonal products, that's something we are focusing on, and as Rupeshwai said, at this point in time, the overall share of that in the business is slightly upwards of a quarter of our business. It has steadily increased over the years, and that is where we are right now.

Sure, sure. I would give a bit of details in terms of the inventory. So, we have mentioned that the channel inventory is normalized. So, that would be the, if you can give more update on that.

So, on that, Shadha, this is the estimates we have of the inventories available with our partners at the distributor and dealer level. At this point in time, the inventory in the market is almost similar to what we had around the same point in time last year. So, some of the lower primary sales that we did this year in the September quarter and kind of same sales as last year, next impact is, at present, the inventory in the market is similar to last year, and hence we are saying it's kind of normalized.

Sure, sir. Thank you so much. I'll fall back in the queue for the questions.

Thank you. The next question is from the line of Kesha, Vijay Ratan Lahoti from HTFC Securities. Please go ahead.

Hello. Hi. Thank you for the opportunity. This time, you haven't mentioned, you know, specifically financial in presentation. Can you give some sense how has been your performance for this quarter, and how are you looking for the next quarter? What sort of growth and marketing we should expect?

Now, so, of course, we have the data and details, but to keep the presentation crisp, we are not sharing, but to share with you, subsidiary-wise, for Climate Technology Australia, nine months as a whole, the top line has been 128 crore versus 123 crore at At IBJITA level, it is minus 8 versus minus 14. And at a PAC level, it is minus 18 versus minus 22 crore. And in terms of the cash loss, it is negative 15 crore versus negative 25 crore in terms of the cash loss. Coming to Imco, Mexico, for 9 months it is 101 crore. Versus 135 crore. At EBDETA level, it is 4 crore versus 17 crore. And at a PAT level, it's minus 1 versus 10. But at a cash profit level, it is positive 9 crore versus 12 crore. Just to remind you. After three bumper years in climate in IMCO Mexico, until March 24, it more than doubled its top line and almost tripled its profitability from 21 to 24. The summer of 25 was subdued and that has led to this performance, but otherwise structurally and in terms of the overall performance, Mexico is very well poised. About GSK China, 9 months top line is 80 crore versus 75 crore. At EBITDA level, it is 8 crore versus 14 crore. And profit after tax. So, including exceptional gain on account of sale of IPR, it is 49 crore versus 10 crore, but we need to exclude that, and hence it's almost at a pack level about 7 crore versus 10 crore. So, in nutshell, for 9 months each of the subsidiary has delivered like this, about Symfony Brazil in totality, not being material, not sharing, of course we do have the details and data.

Understood. Got it. Just a sense, you know, we have just taken a decision to set it off. Now we are holding it back. So, the sort of valuation gap was there because earlier call you were very, you know, sort of positive. This might happen by this year and possibly early next year. And we had a strong interest as you highlighted from, you know, more than 10 parties. So, why was the valuation so pulsed apart and nothing so much has changed geopolitical, you know, we take a decision, we want to roll it back. Can you give some more colors on it? What was the thought process? Sure.

So, as we conveyed, there was strong interest by several multinational consumer durable companies from Europe, from China, from North America, apart from. Also, financial investors as well as PE investors. However, When it came to the valuation, vis-a-vis our expectation, as well as the way in which we wanted to treat it strategically, in terms of further sourcing of product by us for those markets, from us, we didn't find it favorable. About the gap of the valuation, you will appreciate that. With each of the prospective buyer, we have entered into NDA. So, legally, we can't disclose as we have also announced on the stock exchange as well as in our earning presentation as to precisely what kind of the valuation was offered or what was the gap. But we believe that this is the heist to mention that there was a gap and obviously gap was not insignificant. Had it been insignificant, we would have gone ahead. Having said that, the silver line is, considering this evolving geopolitical situation, now in Mexico, despite they have imposed tariff of 50%, as far as air cooler is concerned, there is no tariff, and even between Mexico and United States, as far as air cooler is concerned, there is no tariff. And there seems to be a very strong traction, especially from both the markets. And considering our position as well as our presence in multiple geographies, this may work beneficial if we treat it as a silver line.

And the U.S. company, as you will know, is a subsidiary of the Australian company. So the prospects that we see in the U.S. company are bound to benefit the holding company, which is the Australian company as well.

Understood. Got it.

Got it.

That is helpful. And when should we expect this climate, Australia, to hit the profitability cost? Should we expect it should be back to profitability on part as well as cash level from next year onwards?

Well, we are working towards that. We are working towards that. But we can't really, you know, sort of confirm anything yet. Time will tell. Time will tell.

I understood. But will it be a fair assumption? At least things will be on improving path from here onwards.

You could say that.

Yes, you could say that. Got it. One last question from my side. How has been the non-core category growth this quarter and how much it was as a percentage of mix?

So, as it was shared earlier in the presentation, In Symfony India, it contributes more than 25% in last nine months, and it is growing steadily, which comprises of large space ventilated air cooling, water heaters, table top and kitchen cooling appliances, and exports from India. So, they are not dependent upon. Indian weather or Indian summer. And if we consider at a console level, then at a console level, it is like 50-50 percentage. Because overseas subsidiaries, in a way, air cooler and other product sale is counter-seasonal or coming from other geographies. Of course, from subsidiaries as a whole, Still, they are not contributing big chunk to profitability. However, we have to bear in mind IMCO Mexico and GSK China have not only turned around but they have contributed significantly.

What was your growth, non-core, for this quarter and as a nine month as a whole?

I think it's more meaningful to share for nine months rather than quarter to quarter due to variety of results. So, we don't really do the business or plan or strategize quarter to quarter even though we do have a budget. But on nine months, the pie has grown. And it is continuously growing.

It's possible to give a number for nine months and three months, both because at least we can get some sense of how the cooler is doing.

Yeah, right. Now, we don't have really available, but one-to-one, separately, it will be given. By the way, until September quarter, we have given the figures and data.

Right, right. Okay. Thank you. That's it. Thank you.

Thank you. A reminder to all the participants that you may please stress star and want to ask questions. The next question is from the line of Aditya Bharatiya from Investec. Please go ahead.

Hi, good morning, sir. Hi, morning, Aditya. The first one is on the difference between standalone and console revenues. If you just consider continuing operations, the revenues in the console entity are slightly lower than standalone. So, is it a case that we had sold certain units to, let's say, IMCO or Climate Tech, which have remained unsold? How should we kind of think about it? And what proportion of our standalone revenues would be sales to new companies at this stage?

Yeah, this is mainly the decrease in the consult turnover in continued businesses, mainly due to the stock. So whatever we have sold to the subsidiary and these are lying at stock at subsidiary level, it has been removed from the console turnover as per the accounting standards to show the continuing business. So it automatically goes to the discontinuing operation. So we should look at the continue plus discontinue put together for this purpose.

Sure, sure. Understood, sir. And is it possible to kind of give an indication of what proportion of our revenues would be sales to group companies at the standalone level, both for third quarter as well as nine months?

So, for the quarter, it is around 20 crore. So, you can, yeah, 20 crore out of that 182 is to export to subsidiaries.

But keep in mind, Mr. Bhatia, respective company records the turnover, but when it is a console turnover as reported, inter-company sales or exports get completely knock-off. So, there is no way, double counting or duplication, if at all there is any question about it, and hence, console is a net-net phase.

Sure, sure, absolutely, sir. And so my second question is, if you could give us some indication on how the water heater business is faring, which oil states are we currently present in, how large the business could have become, and what are your plans regarding the product category from a two-three-year perspective? Thank you.

So, as you know, water heaters is a fairly mature category, and we have introduced a product frame which is pretty innovative in its offering. So, we have gone into the market with a safe plan. Last year, we had introduced the product in the Karnataka, AP, and Telangana market. This year, we have expanded this portfolio to select markets in the north, overall covering about 8 trades at this point in time. Also, last year, we had launched it into organized retail, and this year, we have expanded this into the general trade also in the markets that we mentioned. In addition, we are selling on our D2C and Ecom channel. So, over the next two years, I expect that we would roll this out in more markets and stabilize the business from where we are to a higher trajectory.

Perfect, sir. That's helpful. If you could just give some indication on how large you see the business becoming, in case you can share that, that would be helpful.

That would be, there are targets and aspirations set, but just allow us to perform and then maybe once our numbers reach a meaningful scale, we'll definitely talk about it.

Sure, sir. Thank you. Thank you.

Thank you. The next question is from the line of Harsh Gokal Gandhi from Renaissance Investments. Please go ahead.

Yeah, hi, good morning. Thanks for giving me an opportunity. Sir, I just want to have two questions, mainly revolving around our market share. Firstly, you said that 5,000 crore market

size and we are somewhere

around 35% within the organized. So, if you can just help me bridge the understanding gap, you know, we are at roughly 1,200 crores on our top line. So, if you can just help me understand the market share, that's my first question. And secondly, on a medium-term basis, we want to understand, you know, how has the market share fared for us as a company? Yeah, that's the two questions I have.

Thank you. It's actually the share of organized business in the total addressable market. If you recall, about 10 minutes back, we were talking about a significant... Market leaders with a significant market share, and I mean, the total numbers are more than the top next five players combined. So that's where we stand in terms of the market share.

Okay. Understood.

Sir, any further questions?

I just had the second question as to how has our market share fared in medium term? That was my second question. Has it deteriorated or improved any further from here?

It seems broadly, let's say over the last, if I look at last three or four years, within a percent or two kind of band, it has been fairly stable, I would say. Let's say even FY22, FY23 versus this year, the data on either side are barely about 1.5% against the median that we have been trending.

Understood. So, we think that even for, say, nine months, if I just have to consider, the major weakness would be on account of the weaker summers and not us losing market share.

Absolutely, yes. That's something that is true for us and a lot of products and categories and companies in the cooling product segment.

Understood. That's all for mine. Thanks a lot. Thanks, Josh.

Thank you. Before we take the next question, a reminder to all the participants that you may please press star and want to ask questions at this time. The next question is from the line of Aditya from UK Capital. Please go ahead.

Hi, sir. Thank you for taking the opportunity for asking the questions. Am I audible? You are.

Yes.

So, were there higher advertising and promotion spends in Q3 is a one-off expense, and should we expect this higher level to continue going forward?

So, as explained and shared earlier, we have entered into water heater category just in 24. And obviously, being a new product category, the advertisement and sales promotion expenses are far, far higher vis-a-vis normal advertisement and sales promotion on established category. In fact, more than 90% of the advertisement and sales promotion expenses of 11 crore incurred during December 25 quarter pertains to water heater in addition to whatever we spent earlier. And you will appreciate that in our kind of the product category, it is a necessary expenditure even though the benefits accrue in the medium to long term. And we have to root through P&L.

Sir, just some clarity on the market share thing. The mandatory BSI norms have helped the company to gain the market share from unorganized buyers. How big is the opportunity?

No, certainly such BSI norms are beneficial to organized sector and as it always happens in any industry, market leader gains the most because it really differentiates the product and child versus man are really being differentiated which was just narrative. Now, actually it will be known and felt and seen.

But because of some strict norms, some supply bottlenecks also have been created in other sectors, so how is this spanning in this sector?

That's why our product and category focus plays a role. So whenever there are situations like this, we are well prepared and we have tackled it and we are not going to face any issue in that respect. And if you remember, even in June 24 quarter, which was a bumper summer, most of the players faced massive logistic and supply issue, but in a very short time. We could more than double in just 60 days our production as well as supply. So that's where that agility, market leadership and insight really work.

Sir, is there any additional market share we expect to capture going forward because of this?

Our focus is our top-line and bottom-line growth at our robust risk rather than market share.

Okay, okay. Thank you, sir. Thank you for taking me.

As long as we can increase the T.T. of the profit, some additional market share or some less market share, we are not really bothered.

Thank you, sir.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Ms. Shraddha Kapadia for closing comments. Thank you and over to you, ma'am.

Thank you very much. Hello. Thank you, Michelle. Thank you very much, Atpal, sir, Nupeshji, Amitji, and Rajesh, sir, for giving us the opportunity to host the call. Any closing comments from your side, sir?

Thank you, everybody. Shraddha, thanks to you and thanks to all the participants for sparing your valuable time. That too, on a working day during market hours from 11 to 12 a.m., we really appreciate your input and looking forward to see you in next conference call or maybe in person.

Thank you, sir. Thank you, members of the management. On behalf of Smith Institutional Equities, that concludes this conference. We thank you for joining us, and you may now disconnect your line.