Symphony Limited (SYMPHONY) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Symphony Limited Q4FI 26 Earnings Conference Call, hosted by ICICI Security. As a reminder, all participant lines will be in the listening-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on it at stone 4. Please note that this conference has been recorded. I now hand the conference over to Mr. Manan Goel from ICICI Securities. Thank you and over to you, sir.

Thank you. On behalf of ICICI Security, we welcome you all to Q4 and FY26 Result Conference Call of Symphony Ltd. Today, we have with us Senior Management, represented by Mr. Achal Bakiri, Chairman and Managing Director, Mr. Nirupesh Shah, Managing Director, Corporate Affairs, Mr. Rajesh Mishra, Chief Growth Officer. Now, I hand over the call to the management for their initial comments on the quarterly performance and a small presentation. Then, we will open the floor for Q&A session. Thank you and over to you, sir.

Thank you very much. Good morning, everybody. This is Achal Bakery, Chairman and Managing Director of Symphony. I welcome you all to the earnings call of Symphony Limited. And as is our custom, my colleague Nupesh Shah, Managing Director of Corporate Affairs, will be making a brief presentation, following which we'll take your questions. The customary safe harbor rules apply. And I thank ICICI Securities for hosting this call. Over to Nupesh Bhai.

Hello, good morning to everybody. Thanks for joining Symphony's FY26 Investor Call and Earning Presentation coupled with Q426. We will take you through Performance Highlights, Australia Reset, US Business and related IPR Consolidation. So, coming to financial, on a console basis, for the year FY26, top line stood at 1131 Crore, down by 28% YOY, leading to PBT of Rs. 149 Crore, down from 326 Crore. After providing for exceptional one-time impairment provision and net-off sum of the right-back, the pet stands at negative 141 crore. The capital employed in the core business on a console basis stands at 384 crore. Mainly this capital deployed was in Australia and Australia related business. Which is PBIT divided by capital employed based on monthly average capital employed stands at 34%. Symphony India, revenue is 765 crore, down from 1182 crore. At 164 crore, down from 329 crore. After exceptional items stands at 166 crore. About exceptional items, we will deal with it later on. And capital employed on the core business that is in Symfony India was 78 crore. Translating into ROCE percentage of 149. Treasury as on 31st March 26 stands at 287 crore after remitting and investing 165 crore in Australia to repay its long-term and short-term loan which was converted into equity and now impaired. Quarter 4F526, that is March quarter, on a consolidated basis, revenue is 338 crore, down from 488 crore. Gross margin percentage, the noteworthy barometer of the profitability, is intact. It is 46.4% in line with previous year. Of course, EBITDA has taken a toll mainly on account of economies of scale and operating leverage and hence EBITDA percentage stands at 15.5% down from 21.2%. Oh. So now we have short form it as a BISP portfolio or BISP products, which includes large space ventilated air cooling, tower fan, kitchen fan, water heater, exports from India, and sales in the rest of the world. That is the product portfolio not dependent on Indian summer. That constituted 558 crore of sale out of about 1100 crore plus that is 49% of FY26 revenue. You love me. Partly product diversification and geographical diversification, de-risking the business. IMCO Mexico registered flattish revenue with overhang of channel inventory. GSK China is doing well registering decent top line as well as profitability growth. But another important feature is during the year, GSK China, out of its internal accruals and realization from its assets, Repay 26 crore of loan to Symfony India and hence as on March 26, net loan repayable to Symfony India is just 4 crore from peak of 60 crore plus and this 4 crore of loan repayment is expected in next 6 months whereby GSK China in line with INCO Mexico U.S.A. business has registered strong momentum despite geopolitical and tariff issues and the profitability on a quarterly and annual basis is intact as it was in pre-tariff, pre-geopolitical turmoil. As far as Climate Technology Australia is concerned, I will come to it later on. And Board of Directors has declared final dividend of Rs.5 on a face value of Rs.2 amounting to total annual payout of Rs.62 crore, almost 60% of annual consolidated PAT. In line with our stated payout policy, this payout is despite taking an impairment. From Funny India, Q426. The revenue stands at 199 crore, down from 368 crore. March 25 was, of course, high base, but March 25, top line was also on account of huge unbilled advances as on 31st December. Remember, so high base and to an extent, extended be linked to. Next quarter. There was until 31st March channel caution because of inventory overhang and bad summer of 25. There has been decent performance in the month of April so far. It's quite nice. Channel inventory is to a major extent already rationalized. However, in April as well as until now, there has been some weather disturbances, but it is expected that starting current week, we may witness decent summer, and in the past also it has happened that especially in this past, summer sightseeing. From second or third week of May. Registered at 192 crore. 765 crore that is slightly above 25 percentage. Of course, this segment as a whole is already profitability-wise accretive, including immediate level. Mainly on account of ongoing Middle East geopolitical headwinds. U.S. business and on account of that, IPR consolidation at a level of Symphony India. So, more of directors and company have decided to take a balance sheet reset, including impairment in relation to Australia business. So, entire equity investment made in Australia. Worth of 350 crore cumulatively including about 299 crore in the current year has been impaired. In other words, now there is nothing more to impair in terms of the equity investment from Symfony India. We have Zinc France, US business, by making it a direct subsidiary of Symfony India and Bonnet's equity has been bought over by Symfony India at a valuation of Rs. 29 crore. In addition to that, some of the IPRs, especially Bonaire brand of Australia, This is valuable particularly for U.S. business and other markets and hence those IPRs have been also bought over by Symfony India for about 23 crore. It fully recognizes investors' concern about the performance of Australia, its capital efficiency, year after year, the losses it has caused, and investors always like to have disciplined capital allocation. And we must accept that our original Translated into the financial outcome due to external situation and despite making all-around Australia business in 2018, the strategic rationale was in building broader international business, the acquisition provided entry into developed market such as Australia and USA and added established brand portfolio. Australia business encountered a materially different operating environment with a series of external thoughts just within 15 to 16 months post acquisition, we witnessed COVID related world's longest lockdown for almost 21 months and hence we didn't get the time to really We have to integrate and symphonize the business. On top of it, due to changes in local regulation, we had to exit certain products, especially gas-based products, but promptly, we replaced them by new set of products more befitting to local market coupled with Also, integrated manufacturing facility converted into outsource business model. Also, tried best to enhance and expand marketing network. But in nutshell, despite all that, in last two years, Australia businesses registered losses of In FY26, this is after accounting for decent performance and profitability of U.S.A. business. Hence, to further reduce the financial overhang and carrying risk, Symphony infused 165 crore in March in Australia business. The long-term loan as well as working capital loan availed by the subsidiary by which was by the comfort of and guaranteed by Symfony India, so to that extent, loan has been required. On our standalone basis in Symfony, India, we have taken an impairment of 298 crore in addition to 50 crore taken last year. It means entire equity investments totaling 348 crore has been impaired. And at the cost of reputation, nothing more to impair or in other words, nothing more to lose. And at a console level, where technically accounting assets are different. So all put together, the impairment is 259 crores, including goodwill, some of the intangible assets, and deferred tax. So to that extent, post-PBT, Pat is impacted for the quarter and year. The board of directors and company has also decided and very importantly and categorically that no further capital investment or allocation will be made to Australia business. So whatever we were to invest, whatever we were to commit, we have done enough. Along with this, Acquired the shareholding of USA business directly in Symfony India amounting to 29 crore and IPRs worth of 23 crore, totally 52 crore. And this 52 crore will be remitted again out of Treasury of India

in current week or next week.

And from remaining balance outstanding working capital loan, which is guaranteed by Symfony India,

these proceeds will be used

to repay the working capital loan. And then after, these are the financial statements. More for your reference. Standalone as well as consolidated on quarterly and annual basis. We can help you in this.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star then once on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. By coincidence, you are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue is released.

A reminder to all, you may press star and 1 to ask a question.

We have the first question from the line of Ankur Kumar from Alpha Capital. Please go ahead.

Hello, sir. Thank you for taking my question. Sir, you said South, West, and Central India have seen decent performance in April, but North has been weak. So, can you comment overall company level, how are things, and what percentage of our business comes from the North part?

So, it's not like every year North contributes the most or East contributes the most. It varies year after year depending upon the season. However, despite huge inventory, until pre-season,

in April there has been a

decent uptick in the fresh business in the month of April. And coming to North India, as I said, most of the inventory overhand is done so far, despite turbulent season. However, it seems that starting from current week, there may be a decent summer as it was witnessed in some of the past years. If so, I think still we may have a fairly good summer company as a whole.

Sir, when you say fairly good, can you expect a double-digit type growth, 15-20% growth, how should we look at it?

No, if you can give me for next 2-3 weeks what's going to be the precise weather, then I can make some analysis and give that forecast.

Got it.

Sure, sir.

And sir, our company has been quite a pioneer in doing buybacks. And now a lot of companies have announced buybacks, but we haven't announced any such plans. Our last buyback was in 2024. So any plans on that front?

Yeah, so no share buyback as of now, but in a way, we bought back Australia company, we bought back Australian loans, and we bought back USA companies, isn't it?

But given our stock price is quite low compared to 1-2 years ago, so any thoughts on share buyback or shareholders?

At the right time, the board will consider. As always, it was done. And irrespective of anything, there has been a decent payout. But of course, at the right time, it can and will happen, again with change in regulation.

Sure, sir. Thank you on all the way.

Thank you. We will take the next question from the line of Vinay Nadkami from Hathaway Investments Private Limited. Please follow that.

Thank you for the opportunity. I just wanted to know what is the size of your U.S. business in terms of sales and EBITDA and PACT, if you can share that, and what is the loan outstanding?

So, size of U.S. business in last five years have varied from, if I say in INR, ranging from 30 crore to 140 crore. In other words, the potential is at least 140 crore, that is the kind of the sales we achieved. In FY26, U.S. business sales was about 60 crore. And I don't have the EBITDA margin handy right now, but by and large, it is in line with our domestic business. Of course, that margin gets distributed among two or three companies, but ultimately, that is the level of EBITDA margin from U.S.A. business.

And what sells most in USA? What are the products that you sell there? Is it the same thing that you do in India, or is there something additional there?

Yeah, it is regular, mainly regular.

Okay. So, some products are exported, some of the products which are sold in the USA, most of the products in terms of value are exported from India, and the balance comes from our plant in Mexico. But they are all air coolers, essentially.

Okay, and this tariff, because of your Mexico, tariff will not be an issue going forward. Of course, now there is no tariff, but still.

Yes, fortunately, by the time our products reached the shores of America, even this year, the tariff had come down to whatever percent or so. So even from India, it wasn't really material. But yes, and of course, from Mexico, there is no tariff. So all in all, it's become a non-issue at the moment.

Okay. I don't remember seeing your slide on the performance of each of your subsidiaries, GSK China and Mexico. Can you just give us the sales and EBITDA numbers of these two companies, the subsidiaries?

Okay. So, about Income Mexico. For FY26, the top line stood at 182 crore and EBDITA 21 crore. For GSK China, top line was 96 crore and EBDITA of 8 crore. And for Climate Technology Australia, top line was 182 crore. And including profit of USF business, the That figure I have is negative 27 crore because there we had a substantial interest outflow also.

Okay, so now the city of Australia, so finally it is done. Now are you closing it down or are you still looking for sale of that, though it is completely marked out of our books? Are you looking at monetizing some part of it or what exactly is the plan for city of Australia going forward?

So, there we are, to begin with, again, you know, changing the business model to where we will have distributors across the country who will distribute products. At the moment, the subsidiary itself sort of has warehouses and distributes products to various dealers across the country. Instead of that, we will have, you know, distributors in key geographies who will, you know, invest, buy the products that go anywhere from India or China and warehouse them and then sell to the local dealers. So that is the plan. As far as your specific question about winding it up, that is something which we are not at the moment considering. At the moment, we are only looking at making the distribution more effective and efficient so that we sort of continue to build on what we have already done without draining resources anymore.

Yeah, because you mentioned that the board has decided not a single penny more to be given to City of Australia. I just was wondering, how can a loss-making company survive without any funding?

Exactly, exactly. So, you know, essentially the company there will just have the team which will manage the affairs, whereas the commercial transactions would be entirely, you know, between the distributors and our company in China or India, which have been traditionally selling products to the Australians.

So what is the fixed cost of Australian substituted now in a stripped-down version for a monthly fixed cost?

As of now, it is how much? It's about, as of now, the CODV is about 500? 526,000. 526,000. 500 to 600,000 K per month, which includes significant warehousing, you know, rental costs and all, which would also further reduce. So we would essentially just have, you know, the team and some office space, which will manage the affairs over there. And that's a similar arrangement that we have, say, in Brazil. Thank you. So we are basically going to replicate that kind of a model. To continue with the previous question, this 500 or 600 K per month would further go down once the warehousing costs have been...

Before we take the next question, a reminder to all, you may press star and 1 to ask a question. We will take the next question from the line of Manan Goyal from ICAC Securities. Please go ahead.

Hi. Thank you, sir, for the opportunity. So, I have one question. Like, with multiple new entrants aggressively pricing the air coolers, so what's the company's strategy to defend their market share? And are you seeing any average selling price pressure at the trade level? Yeah. What's the last part you said? What kind of pressure at the trade level?

Price pressure.

Yeah, pricing pressure at the trade level.

So, Symfony has always been considered a sort of a premium brand, a mass premium brand, whereas all our other competitors have positioned themselves lower to Symfony for equivalent products. However, you know, we have the widest range of products in the industry, and our products, you know, will be sort of, you know, positioned as various price points so that we are able to aggressively defend our market share and maybe even grow the market share. You know, so the advantage that we have of our product portfolio is that we are able to sort of have products at, you know, at the value, for the value segment as well as for the premium segment. Got it.

Sir, another question is, like, the water heater category was launched in FY26. So, what are the revenue numbers in this category so far, and how do you expect the EBITDA margin will become accretive in this category?

So, it was a launch year, so the revenue wasn't, you know, anything to write home about, but in the coming year, we are sort of going to, you know, it's a long haul, it's going to be a long process, and in the years to come, we will sort of work our way up the revenue chain. Yes, and last year, until last year, it was launched in very limited markets. So, the market, the geographical spread will also be wider this year. So, you know, the revenue will grow up. The products were very well received, you know, both from customers and channel partners, wherever they were sold. So, you know, so we have a unique product proposition in terms of the hair fall control geaser, which is something which no other competitor in the industry has. So, in terms of technology, our product is the most advanced. But at the same time, we have launched, you know, value products, product ranges as well. So, we have a whole suite of products from From the SPA, which is our flagship product, to products at value. Thank you.

Understood, sir. Thank you so much.

Thank you. We will take the next question from the line of Heather Kacchawala from Yes Securities. Please go ahead.

Good morning, sir. Am I already? Yeah, you are. Sir, thank you for the opportunity. Could you also provide the PAT numbers for the subsidies?

PAT number for the subsidies?

Yes, subsidies.

So, for Climate Technology Australia, at PAT level, it was negative 27 crore. Before exceptional item, for IMCO Mexico, it is positive 6 crore. For GSK China before exceptional item it is positive 6 crore and post exceptional item it is 49 crore.

And what do you expect the growth like looking forward in these subsidiaries? What would you guide for? How should we look at them?

No, so very clearly with this Australia reset, balance sheet reset. Subsidiaries will incrementally contribute to the profitability. And as you know, in Mexico, in China, and in Brazil, we don't have any capital deployment. In fact, in Mexico and China, put together, our equity investment is less than 5 crore. There is no symphony outstanding loan to income Mexico since years and years. And in GSK, which was in excess of 60 crore, to be precise 67 crore, now loan outstanding is just 4 crore, even that should be repaid. It means not only in terms of the top line and profitability, but even in terms of the overall profitability matrix, it has to be and will be. Quite capital affinitive. In fact, it was Australia which was a huge and consistent drag and had distorted the picture.

Thank you for that. That's it for myself.

Thank you. We will take the next follow-up question from the line of Binen Adhkarni from Hathaway Investments Private Limited. Please go ahead.

Yeah, thanks. Thanks for the opportunity again. This is two questions on the Indian business. When you said overall business was around 1100 crores and 558 crores coming from BISP, the balance 542, I presume, would be from the Indian operations alone. But when I look at... How is the EBITDA level playing in these two geographies, I mean these two segments?

In household residential coolers, it is significantly better. However, in the BISP category also, even though we have built and growing it with substantial advertisement and sales promotion expenses in the last 3-4 years, at EBITDA level, it is in a decent high single digit margin percentage.

Okay. Okay. And you see that going through operating leverage going forward, or how exactly will BISP EBITDA margin cross and come closer to your normal EBITDA margins?

No, so for sure, it has the potential to be in line with As far as our subsidiaries are concerned, particularly IMCO and even US business as well as China, at EBITDA level, if we normalize, they are almost in line with Tiffany India business.

Okay, and what is the EBITDA for the air cooler business in India, out of the 3.42 crores?

We don't have the EBITDA right now, but we have mentioned the gross margin percentage. So, gross margin, that is the operating margin percentage on a consolidated basis was about 46% in line with the year before. Despite there has been major turmoils and some related disturbances, so neither there has been a pricing pressure, and despite cost pressure, we have, due to variety of strategies and initiatives, maintained that. This is at console level. As far as on a standalone level is concerned, gross margin percentage has taken a heat of about 3 percentage, but still it's hovering at about 45 percentage plus. As far as immediate margin percentage is concerned, certainly it's linked with operating leverage and that has taken a hit. On a console level, it is 15.5% and on a standalone level, it is 17%. A year before, about 27%.

I just wanted to check out on, now, the competition in Indian markets. How much of a gap is there between our pricing and lower-end AC pricing in the market, branded AC?

In one way, there is non-comparable product, non-comparable segment. Actually, the cooling capacity of a particular category of AC and air cooler should be compared, but still, depending upon the brand, the capital cost difference will be almost one-fourth. One-third. Air cooler will be costing one-fourth or one-third, and when it comes to the electricity consumption, clearly, the saving is more than 90%. So, in a way, payback period is one to two years from electricity saving.

Okay. So, basically, you're saying if 100 is the AC price or the lower-end branded ACs, your price would be around 75.

Ours will be about 30 to 40.

Oh, okay. Okay. So, lower by 10% of the presentation. Thank you. Thank you very much.

Thank you. We will take the next question from the line of Shraddha Kapadia from Smiths Limited. Please go ahead. Hello, I'm Audible.

You are.

Thank you so much for the opportunity. So, I just wanted to know the round of your 10 plus Q4. You have mentioned it for the full year. If you could just help with the Q4 percentage also.

No, you are not clearly audible. If you are using speakerphone, please use the handset.

Yeah, so is this better?

I need it to round your percentage for

Q4.

No, no, so we don't have the separate figure for that, but as I said earlier, round-the-year product portfolio EBITDA on a standalone level as well as console level is high single-digit percentage. This is despite we are intentionally building with a lot of one-time costs, but they are totally booked to P&L, including trade channel related costs, advertisement sales promotion costs, and variety of other launching costs, but still it is in high single digit percentage and has a great potential to be in line with our air cooler category. And in some of the categories, in fact, it has already reached. Say, for example, last-place ventilator cooling, UBJITA margin percentage now stands even higher than residential air cooler category.

Sure, sure. Thank you so much. Also, the other expenses are significantly higher versus the historical levels. So, any factors which has led to this high increase, and is it like because of the deleverage, or how should we look at it going forward? Plus the PVC, also the PVC increase which has been witnessed recently, if you could throw some light on that also.

No, there has been huge cost increase undoubtedly, but at least in current quarter, that is June quarter, we have the benefit of old inventory, which was at a lower cost. And overall, it seems that there won't be material impact, at least in June quarter, at a gross margin percentage. It may be few points here and there. But as fully new production takes place, and starting 1st July, we will be in a position to pass on entire price increase in one way or other way. Cost increase will be passed on.

Okay, sir. Thank you so much.

Thank you. A reminder to all the participants, you may press star and 1 to ask a question. Thank you very much. Ladies and gentlemen, we will take them as a last question. I now hand the conference to the management for the closing comment. Thank you and over to you, sir.

Okay, thank you very much for your participation this morning, and we look forward to hosting you next quarter. Thank you, and have a great summer. Bye.

Thank you, members of the management. On behalf of ICAC Securities, we conclude the conference call for Symphony Limited. Thank you all for joining us, and you may now disconnect your lines. Thank you.