Symphony dips 5% on disappointing Q1 results

The management expects gross margin on domestic sales for FY22 to be back to normal margin of around 50 per cent

Shares of Symphony were down 5 per cent at Rs 1,020.65 on the BSE in intra-day trade on Monday after it reported disappointing June quarter earnings (Q1FY22), with Ebitda (earnings before interest, taxes, depreciation, and amortization) margin down to 8 per cent from 26 per cent in the March quarter (Q4FY21).

The company, engaged in air cooler’s business, reported a 48.7 per cent year-on-year (YoY) growth in its consolidated sales at Rs 229 crore against Rs 154 crore in the year-ago quarter. Its consolidated net profit jumped three-fold to Rs 6 crore from Rs 2 crore in Q1FY21. Consolidated gross margins during the quarter under review, however, were down at 43 per cent from 48 per cent in the previous quarter and 45 per cent in the year-ago quarter.

The performance was substantially lower than the normal quarter due to restrictions imposed by the government on account of the second wave of Covid-19, mainly in India and Australia which again struck in the peak of summer, the management said.

In June 2021, the gross margin was in line with FY21 despite the huge increase in input and freight costs. The management expects the gross margin on domestic sales for FY22 to be back to the normal margin of around 50 per cent.

"The demand and sentiments were quite buoyant until the middle of April 2021. However, the second wave of the Covid-19 has impacted the sales for the quarter. Most of the advertisement and sales expenses were incurred in April 2021 considering high demand. Hence, impacted Ebitda margins," the management added.

The company is quite optimistic about growth and performance in the medium to long term period as it has a premium brand with various path-breaking models for household, commercial and industrial needs and being a market leader.

With today’s fall, the stock of Symphony has tanked 33 per cent from its 52-week high level of Rs 1,530 touched on March 3, 2021.