We hereby present you our investment idea for Equity Investment i.e “Pick of the Week”. A thorough analysis of company, industry and economy goes behind our stock ideas for you. With the “Pick of the Week”, you may earn superior returns in stock market over a time horizon of 6 – 9 months.

INVESTING RATIONALE

• Focused player backed by strong brand : Symphony is the largest air cooler company in India with ~50% market share of organized market in value terms and upwards of 40% in volume terms. „Symphony‟ ranks amongst top trusted brands in air cooling segment and has become a generic name for air coolers.

• Untapped opportunities : Rising temperature has made coolers a necessity in summer; nearly 55% of the population lives in hot and dry climatic conditions. Not more than 15% of the households own cooler thus making it an enviable growth opportunity. Moreover, a large part of market (~70%) is still dominated by unorganized segment

• Diversifying into industrial cooling: The residential air-coolers segment account for lion‟s share in the revenues; going forward, the share of commercial and industrial cooling segment is expected to increase. Low investment cost (40% of the cost required for centralized air-conditioning) and maintenance cost along with low power consumption (almost 1/10th compared to A/Cs) by Industrial air coolers makes them most sought after cooling solutions for commercial applications, thus offering immense business opportunity.

• Asset light business model scores over the competition: Symphony operates on asset light business model requiring low capital investments; it outsources almost all its production to nine different OEMs thus ensuring that it is not dependent on any one vendor. This asset light strategy enables the management to concentrate on design, development and innovation along with marketing the product thus generating high return on capital employed (RoCE)

• We have a BUY with a target of Rs. 1,469.