Recently we shared a detailed report on Consumer durable stock with our Alpha and Alpha plus members and believe that it should be part of one’s core portfolio and has the potential to grow at 25% + on annualized basis.
Well, the stock is Symphony Ltd (NSE Code – SYMPHONY) and was recommended to Alpha and Alpha plus members in Nov’13 at Rs 400/- (CMP – 700). Actually, the stock has delivered returns too fast for our liking and we would be happy if it stabilizes or even correct by 15-20% so that we get an opportunity to add more.
The report on Symphony has now been made public and is available for reading/downloading at the below provided links:
Basic Details On Symphony
Symphony is the leading company in India in the air-coolers business and commands ~50% market share in the organized segment.
We like companies that have leadership position or are amongst top 3 in their respective industries as it is reflective of the quality of management, their ability to outgrow competition and with leadership position the companies also get advantages of scale, brand recognition, etc.
Consider this, while the company commands 50% market share, it accounts for ~70% of the profitability of the industry. Thus, as mentioned above, the company clearly has the advantage of scale and brand recognition enabling it to generate much higher profitability than its competitors.
Besides, the company is debt free with surplus cash to the tune of 150 crores (invested in various debt schemes) and only 80-90 crores has been employed in the core business with return in excess of 95% on the capital employed.
Disclaimer: Our Alpha and Alpha + members have invested in Symphony. This report is being shared only for the purpose of information; do not construe the same as investment advice. In case you invest in Symphony, please carry out your own due diligence.