Symphony Ltd - Q1FY21 First Cut - ICICI Securities

(CMP: Rs. 845; MCap: Rs. 5911 crore)

Symphony's Q1FY21 performance was hit by almost 40 days of revenue loss due to lockdown in India. Lower operating leverage (in the absence of volume growth) resulted losses at EBITDA level during Q1FY21. However, company believe, the channel inventory would be normalise in the near future which would lead to improvement in collections.

Q1FY21 Earnings Summary (Consolidated)

- Consolidated revenue decreased by ~47% YoY at Rs. 154 crore during Q1FY20 led by ~77% fall in the revenue of domestic business. However, revenue fall in the overseas business was limited to only 16% due to less impact of pandemic in economic activities

- Company reported losses at EBITDA at Rs. 5 crore (Vs Rs. 38 crore in Q1FY20 and Rs. 43 crore in Q4FY20) mainly due to higher fixed costs

- Company reported PAT of Rs. 2 crore supported by reversal of tax benefits during Q1FY21

First two months of Q1FY21 were impacted by lockdown situation in various states in India. However, company is confident of normalisation of inventory at dealer level by Q2FY21. On the international front, the business condition at Mexico and Australia less impacted from pandemic, but lockdown situation on these countries also impacted the sales. With earnings in the short term expected to be negatively impacted, Symphony through its robust balance sheet and strong brand is expected to recovery sooner than competition. We would be revisiting our estimates and target price post the conference call.

Shares of Symphony Limited was last trading in BSE at Rs.841.55 as compared to the previous close of Rs. 848.15. The total number of shares traded during the day was 6694 in over 1025 trades.

The stock hit an intraday high of Rs. 855 and intraday low of 831. The net turnover during the day was Rs. 5644670.

Source : Equity Bulls

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