Symphony Comfort Systems is a market leader in air cooler manufacturing in India with over 50% market share. It has established strong brand recognition and a successful business model with high profit margins and return ratios. The company has undergone a turnaround in recent years, exiting non-core businesses and focusing on streamlining operations. It is now poised for strong earnings growth and is undervalued relative to its fundamentals and growth potential. Price targets of Rs. 300 within 6 months and Rs. 380 within 12 months are provided based on expected earnings growth and potential for re-rating of its price-earnings multiple.

1. Symphony Comfort Systems
Symphony is a market leader in Air cooler segment and is almost synonymous to their products. Symphony has been
a highly successful turnaround in a strong growth trajectory. The company can boast of its market leader tag, brand
oriented business model, negligible debt levels, very high profitability margins and very impressive return ratios. The
company is severely undervalued at 3.3 times FY 10E earnings and 2.2 times FY 11E earnings.
HBJ Capital Services Pvt. Ltd
Web: www.hbjcapital.com
E-Mail: info@hbjcapital.com
Call: +91 98867 36791

2. Best Buying Price…
2 Phase Buying Strategies Suggested [Always buy in SIP ways]
1st Phase : Buy at the recommended price range Rs 200 - 210 [50%
of investment]
2nd Phase : Add if the price falls down to Rs 165 - 175 [50% of
investment]
Recommended Average Buy Price – Rs. 187.5
>>>Expect at least 70 - 100% return in next 12 months time
period!!!

3. Symphony Comfort Systems
Launched in 1988, Symphony today has established itself as a world
leader in evaporative air coolers. Symphony is the domestic market
leader in the Air Cooler segment with more than a 50% market
share.
Air Coolers continue to be the company’s mainstay while it has also
has entered into the Water heater and Air conditioner segment in the
last few years.
Symphony offers its Air Coolers across two key segments – Personal
and Industrial applications.
While being a market leader in the domestic segment, the company
is a growing player in the export markets. The company derives
more than 80% of its revenues from the domestic market segment.
It's products are already being sold in U.S.A, Europe, Middle East,
Africa, South-East Asia and it is aggressively expanding in the export
markets.
The company has a world class manufacturing center at Thol, 23
Kms from Ahmedabad.

4. Symphony Comfort Systems – Products
Symphony Mobile / Portable Air Coolers are ideal for
residences, shops, show rooms & offices where doors
are frequently opened. The technology being
completely natural there are no emissions of harmful
CFCs. Symphony Mobile / Portable Air Coolers are
packed with unique features and state-of-the-art
design, combined with economy, reliability and
efficiency.
Symphony ventured in the AC market 2 years back
and been relatively a new entrant. The company is
hopeful of leveraging its brand equity in the AC
segment. The company offers products across both
Window and Split categories. The unique DTX
technology ensures quick and instant cooling at
minimal power consumption.
Symphony manufactures India's first 5 star water
heater with high density polyurethane foam (PUF)
insulation that minimize the heat loss. In addition,
there is a second layer of special glass wool insulation
in the storage water heaters. This Double insulation
ensures minimum heat loss and maximum energy
saving.

5. Symphony – The turnaround story
While Symphony has always been synonymous with
Air Coolers, the company has had a tough time for
most part of the last decade.
The company came out of its home turf of air coolers
and went on to make water purifier, air conditioners
and washing machines in a short span of time and
with inadequate planning.
However, the response was not really active and in
spite of the poor response, the company tried for
several years to gain a space with these utilities before
calling it a day.
The company also had its loss making domestic flour
mill business which it later exited. These in a collective
manner impacted the company's numbers which even
led to a negative reserves that lasted until FY 07.
However, after the company exited many of
these loss making businesses and started
concentrating on streamlining its distribution
network, the company has truly turned around.
Between FY 07 and FY 09, while the revenues of the
company increased by 3.4 times, the net earnings
increased by around 20 times and 10 times (excluding
other income). This clearly shows the unused potential
of the company and its products.

6. Staring at good times
The company is in a best shape and has reported impressive margins in the recent times. The improvement in
inventory turnover ratio is a clear example of efficiency setting into the business. The company has also reported
impressive profit margins of 33% (OPM) and 23% (NPM) in the recent fiscal year.
The company’s financial year in June ending and the company receives more than 80% of its business in the last
two quarters, owing the favorable climate conditions. To reduce this dependence, the company has forayed into
many export markets. The company has been aggressively expanding its domestic distribution network and is also
looking at bigger business opportunities from industrial applications.
The company had management re jigs and recently roped in the COO of Kenstar with 12 years of experience as the
President of the company.
The share of the organized air cooler market in India is pegged at around 15% to 20% and is growing at
a healthy pace. More customers are moving towards branded air coolers, where Symphony is in charge.

7. Targets
We expect the company to record earnings both in the short term and with a long term (2 or 3 years) point of
view. There is a reasonable chance that the company will grow its earnings at a CAGR of at least 35% in next few
years.
The company being a market leader and brand oriented player with negligible debt levels, 45 crore cash
reserves, impressive profit margins and return ratios looks highly undervalued at 3.3 times FY 10E
earnings and 2.2 times FY 11E earnings. There is a very high probability for a PE re-rating.
With the above considerations, following are our 6 months and 12 months price targets (Conservative)
6 months target – Rs. 300 (49% appreciations from the Recommendation price of Rs. 203.95)
12 months target – Rs. 380 (around 88% appreciation from the Recommendation price or Rs. 203.95)

8. THANK YOU