Symphony reports disappointing performance

News: Consolidated revenue declined ~5% YoY to Rs.205 crore in Q3FY22 due to 14% decline in revenues from overseas business to Rs.84 crore. EBITDA margin declined by 65 bps YoY to 14.6% (down 310 bps QoQ) due to higher raw material costs & low operating leverage. PAT declined by 22% YoY to Rs.21 crore, tracking lower sales, other income and EBITDA during Q3FY22.

Views: The management highlighted demand revival from Q1FY23 onwards supported by increase in temperature and ease in covid-19 led restrictions. The company has also guided for calibrated price hikes (which was insignificant during Q3FY22) to not disturb trade sentiments. We believe, slow price hikes will keep overall gross margin under pressure in the near term and delay recovery in overall profitability.

Impact: Negative