Symphony Limited Company Case Study

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Table of Contents

INTRODUCTION        

Products Offered:        

Residential Air Coolers:        

Packaged Air Coolers:        

Central Air Cooling Solutions:        

Market Share:        

Symphony’s Major Growth And Value Drivers        

Company-specific factors        

Smart acquisitions and PMI practices        

Strong brand recall        

Newer product launches complimented by distribution network        

100% outsourcing model results in high scalability and reduced risk        

Symphony’s Major Industry Drivers        

Rising Temperature        

Rising Demand from Middle class Segment        

Price advantage        

Government Initiatives: Growth of Industrial and Tower Coolers        

Global and domestic cues and economic analysis        

SWOT Analysis Of Symphony        

Strengths        

Opportunities        

Weaknesses        

Threats        

Porter’s Five Forces Analysis        

Bargaining Power of Suppliers        

Bargaining Power of Buyers        

Industry Rivalry        

Threat Of New Entrants        

Threat Of Substitutes        

Financial Analysis of Peers        

Major Risks and Concerns for Tasty Bite Investors        

Seasonality in demand poses inventory build-up risk        

High competition from unorganized segment could dent margins        

Product concentration risk        

Unfavorable forex movement        

Pros And Cons For Share Holders        

Pros        

Cons        

VALUATION        

Key Assumptions:        

Recommendation        

INTRODUCTION

Symphony Limited located in Ahmedabad was established in the year 1988. It is a joint stock, publicly held, listed company. It manufactures products like domestic air coolers Symphony Limited was founded in the year 1988 by Achal Bakeri. Then later in the year 1990, Symphony aired its first TV campaign. Symphony went public in the year 1994 and was also listed at Bombay, Ahmedabad and Delhi stock exchanges, industrial air coolers, and water heaters. Symphony has its operations in about 60 countries. In 2006, Symphony expanded itself into 33 other countries. It also acquired IMPCO, USA, in the same year. In 2010, Symphony introduced Industrial coolers in Indian market.

Products Offered:

Symphony provides evaporative air cooling solutions to help customers keep their surrounding environment cool and comfortable whether they’re at home, work or anywhere in the world. We provide domestic (plastic), commercial (heavy duty metal coolers) and industrial (metal cooler-machine made modular unit) air coolers across various models.

Residential Air Coolers: Symphony offers the largest range of residential air coolers with unique features and state-of-the-art design combined with economy, reliability and efficiency. Symphony’s residential air coolers are designed around superior features – powerful air throw and honeycomb pads and are ideal for residences, shops, showrooms and offices. These attributes translate into superior consumer value – lower costs (initial and operating) and superior performance.

Packaged Air Coolers:  Symphony Packaged Air Coolers are ready-to-fit compact units ideal for a wide range of commercial, industrial and residential usages, where a constant flow of fresh filtered and cool air is required. These packaged air coolers offer several remarkably superior advantages over air conditioners and are also suitable for spaces where air conditioning is otherwise not feasible.

Central Air Cooling Solutions: Manufactured at a state-of-the-art plant in North America, Symphony’s heavy duty industrial air coolers provide cost-efficient, environment-friendly cooling solutions ideal for industrial and commercial applications in large facilities where refrigerated air can be ineffective or expensive.

Market Share:

Symphony is the market leader with a 50 per cent share (40 per cent in volume terms) of the domestic organised market, followed by Kenstar (35 per cent), Bajaj Electricals (15 per cent) and Usha.  The size of the air-cooler market is estimated to be seven million units worth Rs 3,000 crore. It is expected to grow to 10 million units by 2020. The global market (except China) is estimated to be another Rs 4,000 crore. However, only 20 per cent volumes come from the organised sector

[pic 2]The market size for Air Coolers in India stands at INR20b. Organized market which is 20% of total market is growing at ~20% annually. In India, there are ~247m households; about 66% (164m) own Fans. Only 4% of the total households own Air Conditioners (9.4m) and ~8% (19.8m) own Coolers. About 132m households live in hot and dry climatic regions (~54% of the total), and ~11m households live in moderate climatic regions. This translates into an aggregate 143m households (58% of total households) as potential customers for cooling solutions.