Investec sees upside in Symphony stock on strong Q2 results & water heater expansion By Investing.com

On Wednesday, an analyst at Investec increased the price target on Symphony Ltd (SKC:IN) shares from INR 1,730.00 to INR 1,790.00 while reiterating the Buy rating.

The revision follows Symphony's impressive performance in the second quarter, with consolidated revenue and profit after tax (PAT) increasing 15% and 60% year-on-year, respectively. The results beat both Investec estimates and consensus, with PAT outperforming by 13-23%.

The significant growth was primarily driven by Symphony's domestic operations, where earnings before interest, taxes, depreciation and amortization (EBITDA) and PAT grew 32-36% year-on-year. This performance was well above expectations.

Management emphasized that channel inventories are currently lower than usual, which is expected to have a positive impact on the company's performance in the coming quarters.

This expectation is supported by a significant increase in customer advance payments, which is reflected in the increase in other current liabilities on the company's balance sheet.

Symphony, which has historically focused on a single product for over a decade, is re-entering the water heater market, a segment it exited in the late 2000s. This strategic move is expected to nearly double the company's domestic market potential.

Based on these developments and strong quarterly results, Investec has increased its earnings per share (EPS) estimates for Symphony for fiscal years 2025 to 2027 by 3-7%.

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