This stock has surged 43,000% in the past 10 years

Cooling is hot business for this company. A change of business philosophy coupled with growing demand for its products have generated a fortune for the shareholders of this company over the last 10 years. A quick analysis of companies in the BSE 500 group in the last 10 years shows that shares of Symphony have surged a massive 43,000% – from Rs 3.64 on November 20, 2007 to around Rs 1,567 levels now, according to ACE Equity data. 

Avanti Feeds, Caplin Point Laboratories, Ajanta Pharma, Vakrangee, Relaxo Footwears, Eicher Motors and Somany Ceramics are some of the other BSE 500 stocks that have rallied 5000% – 30,000%, ACE Equity data show. By comparison, the S&P BSE Sensex has gained 73% to 33,359 levels during this period.

Established with a portfolio comprising one air cooler model, Symphony was able to match large multi-product competitors such as Crompton Greaves, Usha and Polar in the air-cooler category by the 1990s. It then decided to diversify into air conditioners (ACs), washing machines and other durables, which failed to attract consumers. 

By 2001, investors lost faith in the company, its net worth eroded and Symphony ended up as a penny stock at the bourses. It was then referred to the Board for Industrial and Financial Reconstruction (BIFR) with debt of over Rs 50 crore, reports suggest. 

Post-2005, Symphony restructured its philosophy into 'One Product–Many Markets’ and scaled up its international presence. In 2009, it acquired IMPCO (North America) and had begun offering central air cooling solutions in India by 2011.

“Symphony operates in a niche segment. Product innovation, ability to grow and a change in business philosophy has augured well for the company over the past 10 years. This, in turn, has not only generated wealth for the promoters but for the shareholders as well,” says A K Prabhakar, head of research at IDBI Capital.

The domestic air cooler market, analysts say is largely fragmented with unorganised players accounting for about 70% of volume and 63% value share. The branded air cooler industry is highly concentrated with the top 5 players accounting for over 90% market share with Symphony being the leading player in the space (50% share by value). 

“Of the 246.4 million households in India, mere ~28 million own air coolers, implying paltry 11% penetration. This entails humungous growth potential. We envisage penetration to increase to 25% by 2026 due to warmer temperatures, increase in the middle class and formalisation of the economy. Moreover, of all the consumer durable sectors, air coolers have one of the highest growth potential due to higher proportion of the unorganised segment,” says Amit Mahawar of Edelweiss Research in a recent co-authored report on the company with Darshika Khemka and Ashutosh Mehta. 

Company Name	Price (Rs)	Change (%)
Symphony Ltd.	1566.95	43,007
Avanti Feeds Ltd.	2547.60	29,837
Caplin Point Laboratories Ltd.	669.25	25,640
Ajanta Pharma Ltd.	1336.20	10,399
Vakrangee Ltd.	691.20	8,622
Relaxo Footwears Ltd.	576.30	8,222
Eicher Motors Ltd.	30650.25	6,446
Somany Ceramics Ltd.	843.45	5,955
Hatsun Agro Products Ltd.	863.85	5,796
La Opala RG Ltd.	523.15	5,687
KRBL Ltd.	625.45	5,680
Kajaria Ceramics Ltd.	712.70	5,636
Astral Poly Technik Ltd.	786.50	5,437
Bajaj Finance Ltd.	1805.70	5,424
Kitex Garments Ltd.	308.25	5,397
Page Industries Ltd.	23082.45	5,349
Price as on Nov 20, 2017; Source: ACE Equity

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