Why Symphony Share Price is Rising

The relentless summer heat has transformed the cooling sector into a lucrative market, with investors flocking to capitalise on the rising demand. Symphony, a prominent player in this domain, has emerged as a star performer.

Renowned for its innovative and affordable air coolers, the company has carved a substantial market share in India.

The company's stock has already witnessed a remarkable 66% surge in 2024, a testament to investor confidence in its ability to capitalise on the burgeoning cooling market.

Today, Symphony was once again in the spotlight with a staggering 19% jump in its share price. This extraordinary rally suggests that underlying factors, beyond the seasonal demand for cooling products, are driving the stock's performance.

A confluence of factors could be contributing to this exceptional growth. Unraveling the exact composition of these factors requires a deeper dive into Symphony's business operations and the broader market dynamics.

Read on to find out what factors are driving the rally in Symphony share price.

#1 Buyback of Shares

In the past five days Symphony' share price surged 21.7% in anticipation of significant corporate actions. On 1 August 2024, Symphony announced that its board might consider a share buyback.

In its latest board meeting, the board approved the buyback of up to 285,600 fully paid-up equity shares with a face value of Rs 2 each. This buyback represents up to 0.4% of the total number of equity shares of the company.

The buyback price is set at Rs 2,500 per equity share. The total consideration for this buyback would not exceed Rs 714 million (m), excluding transaction costs.

The buyback price is a premium over the current market price. By approving the buyback at a significant premium, Symphony has demonstrated confidence in its business prospects.

The buyback reduces the number of outstanding shares, increasing the value of each remaining share. This makes the shares more attractive to investors.

The announcement of a buyback generally creates positive sentiment in the market. Investors perceive it as a sign of the company's strong financial health and commitment to returning value to shareholders.

#2 Strong Quarterly Results

Symphony reported robust financial performance in the first quarter of FY25.

Symphony's net profit for the quarter saw a substantial rise, reflecting the company's strong operational performance and effective cost control measures. Its net profit in Q1 FY25 stood at Rs 0.9 bn, up 270% compared to a year ago period.

The company's revenue also saw significant growth, driven by increased demand and efficient operations. The revenue for this quarter increased by 76% to Rs 5.3 billion (bn) compared to Rs 3 bn reported in the same period last year.

Several factors contributed to this rise. There was a notable increase in sales volume, particularly in the air cooling and other appliances segments.

The company's expansion into new markets also played a role in boosting revenue. Symphony's strategic initiatives, such as new product launches and enhanced distribution networks, further supported revenue growth.

The company's earnings before interest, taxes, depreciation, and amortisation (EBITDA) saw a remarkable increase of 298%. This was due to improved operational efficiencies and cost management.

What Next?

Looking ahead, Symphony has outlined several strategies to sustain its growth momentum.

The company plans to continue expanding its product portfolio. New product launches are in the pipeline to cater to evolving consumer needs and preferences.

Symphony aims to introduce innovative products that leverage advanced technology and address market demands.

The company is also focused on expanding its market presence. This includes exploring new geographic regions and strengthening its foothold in existing markets. Symphony plans to enhance its distribution network to ensure better market penetration and reach.

In terms of financial targets, Symphony aims to achieve steady revenue growth and maintain healthy profit margins. The company is committed to improving operational efficiencies and reducing costs wherever possible. This will involve leveraging technology and optimising processes.

Symphony's growth plans also include investments in research and development. The company is keen on developing cutting-edge products and solutions that can provide a competitive edge in the market. These investments are expected to drive innovation and support the company's long-term growth objectives.

The company's outlook remains positive, with a focus on sustainable growth and value creation for shareholders. Symphony aims to capitalise on market opportunities and navigate challenges effectively.

How Symphony Share Price has Performed Recently

In the past five days, Symphony share price has rallied 21.7%. In the last month, it is up 30%.

In 2024, so far, its share price has surged 66.7% and it has rallied 65.6% in the last one year.

The stock touched its 52-week high of Rs 1,474.9 on 6 August 2024 and a 52-week low of Rs 820.1 on 20 March 2024.

About Symphony

Symphony Limited formerly Symphony Comfort Systems provides residential mobile commercial packaged and central air cooling solutions for domestic and industrial customers in 60 countries across the globe.

Established in 1988, Symphony is engaged in the manufacturing and trading of residential, commercial, and industrial air coolers in the domestic and international markets. It is the largest air cooler manufacturer in the world.

Over the years, Symphony has built its moat by focusing on product innovation and distribution for cooling solutions that people purchase while graduating from a fan.

Its product includes household coolers products, commercial coolers, large space venti-cooling, and tower fans.

For more details, see the symphony company fact sheet and quarterly results.

You can also compare Symphony with its peers.

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