In an interaction with Amit Kumar, Group CEO and Executive Director, Symphony Ltd

The potential to create new markets as well as increase our market share in the rest of the world is significant and given our multi-decadal expertise, we are excited to undertake this journey; expresses Amit Kumar, Group CEO and Executive Director, Symphony Ltd

What is your outlook on the domestic appliances & consumer electronics industry, particularly air-coolers? What are the emerging demand trends and consumer behaviour that you are witnessing?  

Air-coolers have emerged as one of the fastest-growing segments within the consumer appliances space. In addition to being environment-friendly, air-coolers consume 90 per cent less electricity as compared to air-conditioners and are priced attractively lower than air-conditioners. Air-cooling industry across the world is growing at a decent pace and is expected to continue the same momentum, owing to increased disposable income, rising global temperatures, widened market presence, and a cost advantage over air-conditioners.  

Though India still has a large unorganised market for air-coolers, branded players are rapidly gaining market share on the account of technological innovation, strong distribution network, and superior product quality. This shift should further accelerate in the near future, given the increasing consumer preference for known brands with products having a high aesthetic appeal, better durability, and good after-sales service support. Such a shift will transform the sector’s dynamics, resulting in an exponential, multi-year push for leading brands like Symphony.   

We are witnessing an increasing trend of shopping on e-commerce and D2C platforms by consumers. Symphony India's D2C brand store offers a seamless consumer experience. We have introduced an exclusive range of products, including limited edition air-coolers, coupled with attractive consumer schemes like no-cost EMI and COD payment options on the D2C brand store. In addition to India, our D2C services are currently available in Australia and Mexico as well. 

For FY22, Symphony’s sales and net profit came in at Rs 1,035 crore and Rs 121 crore, registering healthy YoY growth of 15 per cent & 13 per cent. What factors are responsible for your consistent growth and performance?  

The robust performance despite a challenging business environment on account of COVID-19 induced lockdowns, elevated raw material costs, and logistics is an outcome of a series of strategic initiatives viz. expanding global footprint, agile global supply chain, value engineering, cost optimisation measures, etc. The consolidated gross profit margin and EBITDA margin stood at 45 per cent (FY21: 45 per cent) & 19 per cent (FY21: 18 per cent) respectively, despite high raw material costs, increasing spending on marketing, advertising as well as channel participation schemes.   

The consolidated profit before interest & tax (PBIT) grew by 25 per cent on a YoY basis. The share of the rest of the world (RoW) in the consolidated PBIT increased from 7 per cent to 39 per cent. This year, with the early onset of the summer and the unrelenting heatwaves across major parts of India, the demand for air-coolers has shot up. There is a complete normalisation of the trade inventory and excellent consumer sales across India. In April 2022, the sale of our products in India is higher than the historical highest-ever April sales.    

In FY22, Symphony’s international business (i.e. RoW) contributed PBIT of Rs 70 crore, registering YoY growth of more than six times from Rs 11 crore recorded in FY21. What is your vision for the international segment over the next 2-3 years? Also, throw light on the opportunities that you are focussing on. 

The rationale for foraying into the international business with direct or indirect presence is to de-risk the business by expanding the market size and mitigating seasonality factors. At present, we have a direct business presence in six countries and an export network across 60+ countries. We have a wide portfolio of global brands comprising over 100 models. We have been nurturing the synergy of Symphony India and our subsidiaries in the areas of R&D, technology, marketing, value engineering, cost optimisation, etc. We have been penetrating deeper into our geographies as well as strengthening our distribution channels through launching & upscaling our D2C platforms and tie-up with large format stores. The potential to create new markets as well as increase our market share in the rest of the world is significant and given our multi-decadal expertise, we are excited to undertake this journey.   

What are your key growth triggers?  

The key growth triggers of our business are as follows:  

Expanding the reach of the products: We are continually expanding the reach of our products in the domestic market, mainly in the semi-urban and rural areas. Last year, we launched Bharat Range of air-coolers specifically for these markets and have received a good response. Our efforts are to further increase the reach of our products.   

Shift from unorganised to organised segment: The domestic air-cooler market is still dominated by the unorganised sector. Gradually, the share of organised sector should increase, given the rise in disposable income, visual & brand appeal, energy efficiency, higher durability of the product, and better customer service. The market share of Symphony in the organised air-cooler market is more than 50 per cent. The transition might help Symphony further increase its market share in the organised market.     

LSV – on a strong growth path: Our large space venti-cooling (LSV) business, which is commercial & industrial coolers, is ready to take off. We expect this business to deliver strong growth in the coming years, given huge opportunities and Symphony being the only organised player currently.     

The international business: FY22 has witnessed robust profitability of our international business. Given the strong business prospects and several strategic initiatives taken so far, we expect our international business to grow further, increasing its overall contribution to the consolidated revenue & profits.   

D2C and e-commerce: We are very upbeat about the sales from the D2C channel in India as well as via our subsidiaries in Mexico, Australia, and the USA. Given the increased penetration of the internet & consumer preference towards D2C and e-commerce, we expect these business channels to register strong growth in the coming years. 
 

At the moment, what are your top three strategic priorities?  

Our top strategic priorities are expanding reach, strengthening as well as nurturing the global strength of Symphony India & international subsidiaries along with leveraging technology for a seamless consumer experience across touchpoints.