Good afternoon, ladies and gentlemen. Welcome to the Symphony call, the Q1 FY27 call.

I have with me my colleague, Aditya Bhartia, who is the co-head of research, to take us through this call and introduce to the management. Before I hand over to Aditya, please note that all of you all are in the listen-only mode, and we will give an opportunity to ask the management questions.

Do raise your virtual hand, and then we will unmute you. Please note that this call is being recorded.

Over to you, Aditya.

Thanks, Swapna. Hello, everyone.

A warm welcome on behalf of Investec India to Q1 FY27 earnings call of Symphony. We have with us the senior management team represented by Mr.

Achal Bakeri, Chairman and Managing Director, Mr. Nrupesh Shah, Managing Director Corporate Affairs, and Mr.

Rajesh Mishra, Chief Growth Officer. Now I hand over the call to Mr.

Bakeri for initial comments, post which we will open the floor for Q&A. Thank you, and over to you, sir.

Thank you very much, Aditya. Thank you, all participants, for joining this earnings call of Symphony on this lovely, cloudy afternoon.

The customary safe harbor clause applies. As we have done in the past, my colleague, Nrupesh Shah, who is the Managing Director Corporate Affairs, will take us through a presentation, post which we are all here to take questions.

Thank you.

Yeah. Thank you.

Nrupesh Shah here. Yeah.

If we summarize the quarter of June '26: domestic momentum, absolute margin discipline, and as far as overseas subsidiaries are concerned, the robust performance of US and China cushioned the reduced export and Impco and CT headwinds. On a consolidated basis, for June '26, revenue stands at ₹378 crore, up by 8% YoY.

EBITDA stands at ₹48 crore, up from ₹38 crore, up by 26%, while console PAT stands at ₹40 crore, down from ₹42 crore. However, EBITDA and PAT I wish to look at from the point of view of in June '26 there has been one-time non-cash expenditure of ₹5 crore, while in June '25 there was exceptional ₹9 crore of higher income.

If we ignore that, then impact-wise EBITDA for June '26 is ₹53 crore versus ₹38 crore, while console PAT ₹43 crore versus ₹35 crore, that is up by 23%. As you can observe, the gross margin, despite all headwinds and geopolitical situation and pressure on commodity prices and also inventory overhang due to bad summer of '25, we have marginally increased the gross margin percentage to 49.8%, while EBITDA to 12.60%.

Coming to further specifics of June '27 quarter, June '27 for consolidated as well as standalone has witnessed second-highest revenue as well as EBITDA vis-à-vis any historical June quarter. The performance is led by domestic performance, duly supported by gross profit margin and EBITDA margin expansion, as shared earlier.

Also noteworthy thing feature is BISP segment, that is Beyond India Summer Products, that is the sales product-wise or segment-wise not dependent upon Indian summer, constituted about ₹560 crore on a console basis in trailing 12 months, that is almost 48%, reinforcing our strategic de-risking and diversification from Indian summer. Bonaire USA is now back to track, and revenue grew by 35% with a robust profitability, mainly on account of successful scale-up of new models of air cooler.

GSK China revenue grew by 43%, and operating leverage lifted the profitability, as well as now GSK China on a standalone basis is completely debt-free, including has repaid all the debt along with interest to Symphony India, just like as it happened many years before with Impco Mexico. Climate Technologies Australia, it is continuing revenue soften, but our commitment we are reinforcing there won't be any further capital allocation.

In terms of the impairment and write-off, it is completely behind us, and it was recorded in FY26. For June 27 '26 quarter, the board of director have announced interim dividend of ₹1 per share on a face value of ₹2, with a total payout of about ₹7 crore.

On a standalone basis, that is Symphony India, revenue stands at ₹241 crore versus ₹229 crore, while EBITDA stands at ₹30 crore versus ₹24 crore, and PAT ₹28 crore versus ₹37 crore. Again, just like consolidated, if we take out exceptional or one-time in both the quarters, the June '25 PAT stands at ₹24 crore versus June '26 of ₹28 crore.

Just like consolidated top line, even on standalone this is the second-highest June quarter performance. By the way, domestic sales, that is India revenue, grew by 15% despite huge inventory overhang before the summer.

Importantly, all different segments of modern trade grew in excess of 100%, while digital channels, including D2C, are highly profitable in excess of our normal domestic business and has a huge potential to scale up. As of 30th June '26, that is year-end, a season-end, there is no inventory overhang either at a trade level or at a company level.

It is completely normalized, while on a standalone basis BISP accounts for top line of ₹179 crore in TTM, that is 23%, and importantly, here at EBITDA level it is profitable, almost close to double-digit percentage. However, standalone exports from India declined mainly on account of geopolitical and shipping disruptions.

Next. About some of the financial ratios.

By the way, as on 30th June, our capital employed as well as net worth has further reduced and rationalized on account of impairment done in FY26. As on 30th June '26, core capital employed on standalone is ₹73 crore versus ₹136 crore, translating into ROCE percentage of 164, while return on net worth at 22%.

Treasury stands at ₹345 crore versus ₹363 crore. This is after remitting to Australia and repaying their acquisition loan as well as working capital loan until 30th June of approximately ₹225 crore.

In other words, after repaying ₹225 crore of debt, treasury stands at ₹345 crore, almost in line with 30th June '25, while on consolidated basis capital employed is now almost half, ₹206 versus ₹409, as Climate Technologies was taking away substantial capital, translating into console ROCE percentage of 67 and return on net worth of 18%. Thank you.

With this, we can take questions.

Aditya, over to you.

Hi, sir. Maybe I'll start with the first initial questions.

It would be helpful if you could guide us what could be the proportion of sales that are generated from modern trade and e-commerce channels?

No, due to competitive reasons, we don't divulge. However, year after year, it registers very robust growth and profitably.

Understood, sir. And—

We club it as a part of the modern trade, which, of course, apart from e-commerce and D2C, includes large format stores and large regional stores. What I can say, modern trade constitutes almost or in excess of 1/3 of our top line in India, while general trade constitutes 60%, 65%.

Understood. That's helpful, sir.

In terms of profitability, will it be as good as traditional channels or it lacks by a wide margin?

Ask if it is MT versus GT.

No, Aditya, it's almost comparable.

Understood, sir. Okay.

Sure. My second question is on the cost side.

Do you think that in this quarter, we have recorded very good margins, but of course some costs have gone up and I guess something like plastic costs itself would have gone up. Do you anticipate some impact in the next few quarters on margins because of cost going up, or is it a case that because inventory in the channel is so low that everything should essentially get passed on and we shouldn't really be seeing any impact on profitability?

Frankly, it all depends on how long the war lasts and when the sort of costs begin to normalize. As of now, the costs are still fairly elevated.

At least in the short term, we expect there to be margin pressure, although we would be passing on some of it to the market, not all of it, because we don't know how long this is going to last. In anticipation of a normalization, which has to happen sooner or later, we will pass on some, but not all of it.

In the short term, margins are likely to be impacted.

Understood, sir. Understood.

Despite all the value engineering, despite all the cost reductions that we will be attempting to do, there will be some impact. Difficult to quantify as yet how much, but there is likely to be some impact.

Sure, sir. I'll come back in the queue, and in the meantime, we can take some questions from the participants.

Swapna?

Good evening. Am I audible?

Very much.

Yeah. Thank you so much for the opportunity.

Sir, modern trade is growing over 100%. Could you explain the drivers behind this surge, whether it is a market share gain from unorganized trade or increased in the market itself or we have changed our strategy, or is there a low base from last Q1?

How sustainable this growth rate in the coming quarters or years?

Bala from Arihant Capital.

It's a combination of factors. One is that the modern trade, just like e-comm or D2C, didn't have any channel inventory, unlike the general trade, which had elevated levels of channel inventory carried over from the previous year.

Had the general trade not had that kind of inventory that they had, maybe their sales would have also been 100% or whatever. It is really a function of the inventory that the channel was carrying.

That's one. Secondly, we'll be very happy if this kind of a growth continues, but that's very unlikely to happen, I think we shouldn't expect that going forward.

What was the third question? That is right, Mr.

Balasubrahmanyam?

Yes, sir. Sir, my second question, I think I was saying—

Related to that, yeah, just related to that, Balasubrahmanyam. As general trade was carrying the inventory, obviously there was a subdued performance at a company level in terms of sales to them, but obviously at their level there was a phenomenal sales.

That is number one. Number two, and hence, year as a whole, as inventory has normalized, we expect general trade in particular and all other trade channels should register growth, which is also our expectation and business plan.

Got it, sir. Sir, my second question: in USA, I think the growth is 35%.

I think it was a very good growth. Mentioned about a successful scale-up of new air cooler SKUs.

Could you please mention what kind of SKUs are really picked up in the US market? These are specially designed for US market or they are rebranded Indian SKUs?

They are essentially rebranded Indian SKUs. We have one major customer in USA, which is The Home Depot, and other customer is Lowe's.

These two are the largest, sort of retailers in US in the home center, home care kind of category. The products that we sell to them mostly go from India, some even go from Mexico.

The product that has registered the greatest sales growth is a model called Airforce that goes by the name of Airforce in India. It also goes by the name of Airforce, but under our USA brand, which is Bonaire.

Essentially that's what gave us the big uptick in numbers. The sales has also been aided by a very good summer in the USA, especially in the Southwest, which is our core market.

It's fairly hot over there this year. It's a combination of everything: the right product at the right price in the right channel, aided by the tailwind of a good summer.

Sir. Sir, this distribution strategy, how it is differ from Australia?

Vastly differ from Australia. We have a warehouse in USA, and this is a retailer that we sell to, whereas in Australia the part of our business that comes from retailers is still very small.

Bulk of it still goes to sort of the GT equivalent of India.

Installation.

The installation companies. I think the closest resemblance would be the GT channel for India.

Company owned.

Vast difference, vast difference.

Got it, sir.

We learned the most of the lessons from Australian market and we implemented in the US. It's a right way to understand, sir?

No, no, no. The two markets have been very different, we couldn't, even if we had wanted to, we couldn't have implemented the US model in Australia or the Australia model in USA.

The breakup of the markets are very different.

Got it, sir. Got it.

Thank you.

Good evening. Am I audible?

Yeah.

Good evening, sir. This is Haider from YES Securities.

My question was could you just tell us the revenue, EBITDA, and PAT numbers for all the subsidiaries?

Yeah. Bonaire USA, I am sharing in INR, ₹36 crore versus ₹27 crore top line, and EBITDA is ₹18 crore versus ₹7 crore.

I will come to EBITDA number later on. Then Impco Mexico, ₹54 crore versus ₹66 crore, and EBITDA of ₹3 crore versus ₹7.

GSK China, ₹34 versus ₹24 crore, and EBITDA ₹6 versus ₹2. All these numbers are for June '26 quarter.

Symphony Brazil, this is not a season, nothing to talk about it. As far as Climate Technologies Australia is concerned, ₹27 versus ₹31, and EBITDA negative ₹4 versus negative ₹2.

Sir, I think you missed out on the PAT numbers also, if you could share that as well.

Okay. Bonaire USA PAT is ₹17 crore, Impco Mexico PAT is ₹1 crore, GSK China PAT is ₹5 crore, and Climate Technologies Australia, because of exceptional income as its shareholding in USA and IPRs were sold, it is very high PAT, but it is on account of one-time worth of about ₹42 crore of write-back or gain on that, and hence PAT is ₹36 crore.

Sir. And—

It is to be excluded and it has been netted off at a console level. Practically, it is - ₹9 crore, yes.

Sir. Thank you for that.

Sir, and also what kind of price hikes have you taken in the quarter, because we're seeing raw material going haywire? What kind of price hikes have you taken, and what kind of price hikes are you yet to take in the coming quarters?

As of now, we have not really taken in the household cooler segment. In the other segment, we have taken about 7% to 10% of a price hike, and in others, maybe we'll be taking hikes in the days to come.

To what extent we will continue raising remains to be seen, because like I said previously, it all depends on when the war ends and when the costs normalize.

Right. Sir, you mean ex of household products, you have taken 7% to 10% price hike?

Yes.

Sir. Okay.

Thank you, sir. That is it from my side.

Thank you.

Let's move to the next question.

Hi. Sir, I have one question on Australian subsidiary.

We've had some challenges there for some time now. I understand we've had COVID and all supply chain issues, etc., but what is our strategy there to turn operations around?

First and foremost, our strategy is not to deploy any additional capital, and whatever best can be done without deploying any additional capital in our Australian business. The point is we are very clear internally and also to assure all the shareholders that whatever impairments or cash losses or write-off is the history, that's not going to happen.

Without that, whatever can be done, we will be doing it, and as it unfolds, we will keep you informed.

Understood. Sir, anything incremental on product introduction, our distribution, manufacturing, anything on those lines?

Where? In Australia or India?

Australia, Australia.

Australia? No, no, no.

It's just more of the same, nothing new.

Understood. Understood.

Okay. My second question is on the BISP products which we sell.

If you can highlight apart from exports within India, which are some of the larger categories, and if you can give a ballpark number how much would they contribute and how is the traction and customer response on those products?

It consists of LSV, that is Large Space, that is Centralized Air Cooling, and apart from exports, it consists of tabletop fan, which sells round the year, water heater, and exports. This is on a standalone basis, and when it comes to consolidated level, as I mentioned in our mind, whatever sales happens which is not dependent on Indian summer, all that is Beyond Indian Summer Products, that is BISP, on a console basis, sales by our subsidiaries is all because hence, the geographical diversification.

On a console level about 48% is BISP, while on a standalone basis, in all trailing 12 months, it is 23%.

Understood. Sir, particularly, LSV we are quite aware about, even exports, but just to harp on the other two products, tabletop fans and water heaters, is it largely online which we're doing, and how do we plan to scale these products up across the country?

Any plans to get into GT, etc., and maybe launch in other states as well?

We've already launched in other channels: modern retail and as well as GT. It's not everywhere yet.

It's just a matter of time that by which it will be everywhere, but we're already present in the top cities across the country, in GT as well.

Understood. Understood.

Thank you. Thank you so much, sir.

Thank you.

Thank you for the follow-up, sir. Sir, I just wanted to understand one thing.

We have been doing good growth in the US business, but this is more from a understanding the business perspective. The US is a much more developed market than India, right, and the per income capita and all is also significantly higher.

Why would there be a need for an air cooler in somewhere like the US as compared to an India, which is a developing economy, and we need something more cheaper over here as compared to an RAC? Why is it that the sales in the US would be a good market as compared to a place like India or a Brazil or anywhere which is still developing?

We have said this many times in the past that coolers is not viewed as a poor man's air conditioner everywhere outside India. It's only in India that it is seen as a substitute for air conditioners.

You will find coolers being sold not only in the USA, but even across Europe, though quantities are not much because the market for this is a relatively small market, even for air conditioners or fans. Coolers are sold even in the Middle East, which has total abundance of energy, and cost is not a consideration, price is not a consideration.

It's only in India that we view coolers as a cheaper alternative to air conditioners. In the US, it is bought for usage outdoors, because in the Southwest, all houses are centrally air conditioned, despite that, air coolers are bought.

Like I said, they are used mainly outdoors: near the pool, near the backyard, and in people's garages. Some of our models are even sold as household cooler for whole house cooling.

They're mounted on the ceiling, and they cool through ducts across the house. There are some which are window-mounted coolers, which cool the entire house again.

It's a very good alternative to air conditioning in the Southwest where it's very dry, because air coolers provide a little bit of humidity, which is very good to feel in very dry conditions. It's a combination of factors.

Most importantly, it's a portable product, it's a plug-and-play product, so that's what's the most compelling advantage of this product is.

Sir. Thank you for the clarity on that.

Thank you. That is it from my side.

Sure.

Swapna, in meantime, I think there is some questions in the chat as well, if you can read out for the management to respond to.

As far as Mexico is concerned, we've had two consecutive, bad summers. In the by bad, we mean mild summers.

The summer of '25 and the summer of '26 have been both have been sort of mild summers and which have had an impact on sales. This is the first time in in in memory, that this has happened.

We have people in Mexico who have been with the company for more than 30 years and they've never witnessed two consecutively mild summers. We hope and we expect that the summer of '27, should be certainly, statistically, it will be almost impossible for it to be a mild summer.

It should be certainly a a fairly robust summer, and the sales should grow significantly. I cannot put a number on it yet, but we expect there to be significant growth.

As far as USA is also concerned, and as you said, if we were to assume that the summer will be robust, if that's the assumption, then the sales should further increase next summer. Even this year, there was so we we could have so I'm for sure this next year will be significantly better if the summer is as good as this year.

The Middle East, which was primarily impacted, continues to remain affected, and for other regions the cost has shot up, freight has escalated, so that is impacting the overall demand. Overall, the costs have gone up and which is also impacting the buyer sentiment.

People are more cautious because the landed costs have gone up and they are not able to pass on the entire increase. Therefore, the purchase is now a bit muted.

It's still not back to normal.

It's not a question, that's an essay.

No, it's okay. Hold on, Swapna.

Maybe—

Hold on. For if in the next few quarters see, again, this business is likely to see sales in the summer.

The the US summer sort of extends into the current quarter, we will witness revenue in the current quarter, but the next two quarters will see you won't see much revenue in the US market, because primarily it's coolers and coolers are, as sold only in the summer. As far as China is concerned, that has more of an even thing, even sales cycle, because there's a lot of industrial coolers and plus exports and plus exports which will continue with that.

We expect the GSK to continue, the momentum, and in the coming quarters, based on how much export orders are, are received, we believe that we should be able to, do fairly good in GSK. Bonaire USA, coming quarters should be good, current quarter, which is the current quarter, but after that it will be, muted.

That is what is as far as USA, Bonaire USA and GSK China is concerned. As far as your second question is concerned, the Q1 was definitely patchy as far as North India and even East India is concerned, but in the coming quarter, we don't expect any secondary sales, but there will be primary sales, which is basically off-season buying, which happens by our channel partners, which will happen in the in the current and the subsequent quarters.

That's okay.

All right. Once again, thank you all for your participation and for the interest that you have shown in our company, and we look forward to seeing all of you again next quarter.

Thank you and have a great day. Bye-bye.

Also thank you to Investec, as well as Aditya and Swapna, for organizing and coordinating this. Thank you.