Covid-19 unlocks new growth prospects for Symphony

After nearly a flat growth over the past three years following macro-economic disruptions and policy changes, air cooler maker, Symphony Ltd, is now gearing up to capitalise on the Covid-19-led new opportunities and move towards historical growth levels of 25-30 per cent.

“Until 2017, we were growing at a CAGR of about 25-30 per cent. But in last three years — 2017-18, 2018-19 and 2019-20 — our growth has been more-or-less flat due to external disruptions. These are all external factors (demonetisation, GST) one after the other impacting the growth. But hopefully, if we have no such disruptions going forward, we should be able to grow once again at our historical CAGR. There is nothing preventing us internally from achieving that,” Achal Bakeri, Chairman and Managing Director, Symphony Ltd, told Businessline .

What has triggered the new prospects for air coolers is the Covid-19 advisory to avoid enclosed areas and remain in ventilated spaces. Symphony is seeing a new wave of demand from large commercial customers, industrial and warehouse companies, besides home purchases. It recently launched Universal packaged air coolers range for industrial and commercial applications.

“Also, the recent reforms in labour laws are pathbreaking. It mandates indoor places of work like factory premises or manufacturing places, keep comfortable temperatures. So, when the new law is implemented, we will be well-placed to cater to the requirements for these segments. It will drive the growth for us,” Bakeri said.

Key financials

Notably, in 2016-17, Symphony's revenues and profits grew by over 60 per cent and 40 per cent respectively over the previous year. But the impact of demonetisation in November 2016 started reflecting in the following years. The 2017-18 revenue and profit growth fell to just 2 per cent and 6 per cent respectively. In 2018-19, revenues fell by about 23 per cent and profits by about 44 pre cent. However, in 2019-20, the company made a smart recovery in both — revenues and profits — with 36 per cent and 84 per cent respectively. But it was short-lived as the Covid-19-induced lockdown hampered sales and slowed growth.

“In the April-June quarter, we had very dismal sales because of the lockdown. We tried to shift focus to online from offline but we could cater to only a fraction of actual demand due to logistics challenges," he said.

Bakeri is confident of resuming the high-growth journey. Covid-19 has proved a blessing-in-disguise creating new business avenues and conversions of existing premises from air-conditioned to air-cooled.

“We could see a shift in demand from AC homes. They have started buying air coolers for their large AC-rooms to keep their space ventilated. Also, many people started working from home and needed cooling along with ventilation,” Bakeri said.

Domestic market

Of the estimated 80 lakh units of air cooler market in India, unorganised segment commands 75 per cent and organised segment commands 25%. Symphony controls about half of the organised segment.

Bakeri also finds exports a promising bet. After facing political turbulences in the West Asian region Symphony is now tapping other geographies.

“Covid-19 is fairly uniform so there is some impact on exports at present. But now we will start exports to large markets, where we have never exported before, such as US, Australia and Brazil. They are large opportunities. We have just forayed into these markets. So, hopefully, going forward they will also generate significant revenues for us,” Bakeri said.

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