After many quarter of weather / Covid led disappointments, Symphony’s performance was better; but second wave may have a negative impact

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Symphony, India’s largest air-cooler company, and a household name, thrives on innovation which has led to market leadership. Return ratios are high as the company follows a very light asset operations. Distributor relations is a key strength as they support by purchasing and storing throughout the year; whereas sales are seasonal. However, focus on a single product category is a risk factor should there be slowdown in the category. Moreover, the sales are dependent on the intensity of summers which are unpredictable. Recent overseas acquisitions have yet to contribute materially as also the foray into industrial cooling. Recent summer was good but post that, disruptions caused by second wave are likely to impact near term performance. Strong position in the market and reasonable valuation are why we have a neutral rating – 14-05-2021 Price: 1060.50 Rating: Neutral Recommendation: Hold

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