symphony transcript

Company Name: Symphony LtdCompany Ticker: SYML INDate: 2015-04-21Event Description: Q3 2015 Earnings Call

Market Cap: 110,220.75Current PX: 3151.1YTD Change($): +1206.55YTD Change(%): +62.048

Bloomberg Estimates - EPS Current Quarter: N.A. Current Year: 41.478Bloomberg Estimates - Sales Current Quarter: N.A. Current Year: 6985.625

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Q3 2015 Earnings CallCompany Participants Renu Baid, Analyst Nrupesh Shah, Executive Director, Executive Director Bhadresh Mehta, Chief Financial Officer

Other Participants Unidentified Participant Pritesh Chheda, Analyst Atul Mehra, Analyst Gaurav Sanghavi, Analyst Jaya Rathi, Analyst Ankit Jain, Analyst Ganesh Radhakrishnan, Analyst Ravi Naredi, Analyst R Pattabiraman, Analyst Viraj Mehta, Analyst Kamlesh Kotak, Analyst Rabindranath Nayak, Analyst Anuj Jain, Analyst Apurva Kumar, Analyst Saurabh Ginodia, Analyst

PresentationOperatorLadies and gentlemen, good day, and welcome to Symphony 3Q FY15 Post Results Conference Call, hosted byBatlivala & Karani Securities. As a reminder, all participant lines will be in the listen only mode. There will be anopportunity for you ask questions after the presentation concludes. (Operator Instructions) Please note that thisconference is being recorded.

I now hand the conference over to Ms. Renu Baid from Batlivala & Karani Securities. Thank you and over to you, Ms.Baid.

Renu Baid, AnalystThank you, Seth. Good evening everyone. On behalf of B&K Securities, I would like to welcome the management ofSymphony Ltd with us today to discuss the post 3Q FY15 results. Today, we have with us from the management Mr.Nrupesh Shah, Executive Director; Mr. Bhadresh Mehta, CFO; Mr. C.V. Gandhi, Company Secretary; and Mr. GirishThakkar, General Manager, Accounts and Finance.

I would like to welcome Mr. Nrupesh Shah to kindly discuss and share a brief about the current quarter and thereafter,we can start with the Q&A session. Over to you, sir. Mr. Nrupesh Shah.




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Nrupesh Shah, Executive Director, Executive DirectorThank you, and welcome all of you in Q3 analyst conference call. My colleagues Bhadresh Mehta, CFO and Mr. GirishThakkar, General Manager, Accounts are also joined me. I thank B&K Securities for organizing Q3 analyst conferencecall.

In my discussions, review, as well as in the report of data sheets or other workings which we would have shared, theremay be forward-looking statements based on management's plans and assumptions, however the achievements ofresults and such forward-looking statements are subject to risks, uncertainties whether external factors and eveninaccurate assumptions. We undertake no obligations to update any such forward-looking statements or estimates.

Let me start with segment-wise brief overview of major developments during the quarter and first nine-months. Inresidential air cooler in domestic market, distribution enrollment has exceeded the target and it is up by 7% over lastyear. Window Range, which we launched last year and added new models have succeeded and received good responseand same time [ph] meeting with the expectations.About Modern Trade, the billing so far is up by 51% over last year. Not only that, we could start the placement quiteearly, that is by January-end compared to February-end in last year. We have also launched some exclusive models fore-commerce as announced earlier.

e-Sampark, an app to monitor the sales staff has been launched successfully. This app relate to improvement indeleveraging, town visits [ph] and also improvement in business quality. Current year, we have launched newadvertisement campaigns and the entire focus of that residential air cooler ad campaign is on low power consumption,basically to attract the consumers who are using only fans and no other cooling devices.

In the country, there are 164 million households who are using fans and we expect to convert some of them into aircoolers. Again, the focus of advertisement campaign is electricity consumption equivalent to fans. In the current year asannounced earlier, we have substantially enhanced our advertisement budget, expecting long term fruits of the same.

Coming to Centralized Air Cooling Enterprise Customer segment, we launched packaged air coolers. Packaged aircoolers have been launched for the first time in the country. They are compact, easy to install, having no maintenance,they are metal coolers and their cooling capacity for the first time in air cooling segment has been measured in terms ofthe tonnage. The huge advantage lies in the fact that these coolers have extremely low payback periods ranging from 6months to 12 months, just from savings in electricity consumption vis-a-vis electricity consumption of air conditioners.There are four models of packaged air coolers; 4 tons to 12 tons and in terms of CFM, which is starting from 3,500CFM to 10,000 CFMs. For packaged air coolers, we have decided to market through a network of dealers and hence,this range has been offered to HVAC dealers and there has been excellent response, mainly dealers have been(inaudible) and there is also good initial response from the customers too. Starting current quarter, they are also beingmanufactured locally, which will lead to after response time, economical (inaudible) due to saving in custom duty andwe have started procuring from OEMs specialized in sheet metal components.

Centralized air cooling enterprise customers during the quarter and in the first nine-months, we have executed theorders across the segments, these are factory establishments, educational institutes, restaurants, religious segment,cinema halls, laboratories, railways et etcetera. We have also succeeded in signing rates [ph] contracts with HDFCBank and ICICI Bank for their rural and semi-rural low cost branches.

(inaudible) we have tied up with Benz to cool their showrooms. We have healthy pipeline of enterprise customersacross the segments. During the quarter and first nine-months, we have further strengthened the theme of centralized aircooling fill people. In centralized air cooling for the first time, we have come out with TV advertisement campaigns,which has received encouraging response.

We have also launched several promotional activities over and above, participated in the trade fairs and exhibitions, butas conveyed earlier, we expect centralized air cooling segment to show long-term growth, but having a huge long-termpotential.




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Coming to international business, rest of the world during the quarter, we restarted the operations in exports inVietnam, new market, that is Cambodia has been opened-up. However in some of the Middle East countries like Egyptand Syria, on account of qualitative turmoils, the exports have been partially affected there. During the quarter and infirst nine-months, supplies to import have stabilized.

In today's Board meeting, I am pleased to inform that Board of Directors of the company has considered a proposal foran international synergistic convergence. The Board has empowered Chairman and Managing Director and ExecutiveDirector to explore the potentiality of synergy of convergence with the affairs of the Company to accomplish itsbroader vision to tap the export market. Considering the Non-disclosure Undertaking and international practice, it isdesirable to maintain complete confidentiality at this primitive stage and therefore any further information thereon willbe revealed at appropriate time, if there is any further developments are required.

Just few weeks before, we have shifted our registered office and corporate office. And earlier Symphony wasfunctioning in four different offices. Now, all the functions and departments are working under one roof, which weexpect will lead to better co-ordination and efficiency. We fiercely protect our intellectual property rights including therights, including design registration trademark et cetera. Very recently, about a month before, we could get stay orderagainst Cello brand belonging to Wim Plast Limited who have copied our four models. Over and above, we also got thestay order and also restrained (inaudible) industries as well as about eight other small-to-mid size suppliers, functioningout of value and near-by value.

Coming to Q3 and first nine-months financial performance, for the first nine-months, our net sales stood at 137 crores.

OperatorSir, sorry to interrupt you, sir. Maybe request you to speak a bit louder sir because your voice is coming a bit low, sir.

Nrupesh Shah, Executive Director, Executive DirectorSure. In first nine-months, our sales -- in first three months, our net sales has been 137 crores versus 113 crores and infirst nine-months, sales has been 391 crores versus 300 crores, while gross revenue including treasury income stood at146 crores in January to March '15 quarter versus 116 crores, registering growth of about 27% while in firstnine-months, gross revenue stood at 412 crores versus 313 crores, registering revenue growth of 32%.

In terms of total volume of air coolers, in first three months, we have sold about 213,000 air coolers, registering thevolume growth of 14%, while in the first nine-months, we have sold 615,000 air coolers versus 494,000, registeringvolume growth of 24.5%. This is the volume growth from domestic as well as international business.

Coming to EBITDA numbers. EBITDA stood at 51 crores versus 35 crores in March quarter, showing growth of 43%in absolute numbers, while EBITDA percentage to sales stood at 37% versus 31%. While EBITDA in first nine-monthsstood at 135 crores versus 91 crores, showing growth of 48% and EBITDA percentage to sales grew from 30% in Julythrough March '14 quarter to 34.4% that is more than 400 bps in nine months of the current year.

About income tax, effective rate of income tax in last quarter stood at 28% versus 23.8% of the previous year, while innine months, it stood at 29.1% versus 26.4% that is increase of almost 2.7%. Coming to profit after tax, PAT, it stood at36.5 crores versus 27 crores that is increase of 35%, while PAT percentage to gross revenue jumped from 23.4% to25%, while in nine months, it stands at 94 crores versus 56 crores that is PAT growth of 42% and PAT percentage togross revenue, it is 22.80% [ph] versus 21.1%.Coming to capital employed, as you know we have two segments, one is the air cooling segment, that is our homeappliances. The capital employed in home appliances as on March 31, '15 stood at 121 crores, that is down from 132crores year before, despite increase in gross revenue, while remaining amount, that is 188 crores versus 112 crores, thatis the trade value. And this splits into EBIT percentage on capital employed 156% on annualized basis in last quarterversus 117%, while in nine-months, EBIT percentage on home appliances segment stood at 194% versus 145%. While




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EBIT percentage on corporate funds stood at 16.3% versus 5.5%, mainly on account of one-time gains on some of thetreasury investments. While in nine-months, the treasury EBIT percentage stood at 10.30% versus 7.2%.

So with this, I'll open it for Q&A.

Questions And AnswersOperatorThank you very much. Ladies and gentlemen, we will now begin the question-and-answer session. (OperatorInstructions) Our first question is from the line of Pritesh Chheda from ENAM Asset Management. Please go ahead.

Pritesh Chheda, AnalystSorry, this is Pritesh from Emkay. Sir, my question is on the volume growth side, if you see, there is a reduction ingrowth momentum from let's say about 37% in FY14.

Nrupesh Shah, Executive Director, Executive DirectorCan you please speak loudly? Your voice is broken.

Pritesh Chheda, AnalystCan you hear now?

Nrupesh Shah, Executive Director, Executive DirectorIt's better.

Pritesh Chheda, AnalystOkay. Right sir, my question is on volume growth side. If you just check -- last year, it was about 37%, in the firstnine-months it is 24% growth and in the quarter three, it's about 13% growth. So any thoughts there for this change ingrowth and if you could dissect this growth both into domestic and export-related growth?

Nrupesh Shah, Executive Director, Executive DirectorYeah, in March quarter, volume growth has been about 14%, which is lower than March '14. But till beginning ofMarch, volume growth was excellent. However on account of unseasonal rains and hailstorm in two to three weeks ofMarch in many parts of the country, it is lower.

However having said that in nine months, the overall volume growth is about 24%. And at the same time, as per of ourstrategy, we are continuously moving from low value product to high value products. So there is also increase in perunit realization.

Pritesh Chheda, Analyst




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Okay. And what's your assessment in April and how do you see the volume growth panning out for this financial year?

Nrupesh Shah, Executive Director, Executive DirectorStill it is too early and as we have conveyed in the past, overall we maintain that in medium-to-long term, we expect toreduce the CAGR value growth on a consolidated basis, 20% to 25%. And having said that, in some quarters in someyears, there may be high growth in some quarters some year, there may be low growth, but in medium-to-long term, weare confident to maintain 20%, 25% CAGR growth.

Pritesh Chheda, AnalystOkay. And my two other questions is, what explains the rise in taxation in the first nine months and this quarter. Andthe second --

Nrupesh Shah, Executive Director, Executive DirectorYour question is not clear.

Pritesh Chheda, AnalystSir, what explains the rise in taxation in the quarter and the nine months?

Nrupesh Shah, Executive Director, Executive DirectorRise in taxation is number one. Some of the treasury income is -- in fact, most of the treasury income during the quarterwas taxable, which was not the case earlier. This is on account of changing budgetary provision of -- very recentbudgetary provision, that is number one. And number two, domestic earning was higher, which is subject to fulltaxation.

Pritesh Chheda, AnalystOkay and my last question is, in the opening remark, you mentioned that the sales and marketing expense, you haveincreased, but when I see the numbers, I don't see a proportionate increase in sales and marketing expenditureproportionate to the revenue growth. So how should we see this expense line? Should for Symphony, this expenseshould grow proportionately or there is every reason to believe looking at the first nine months also that it might notgrow proportionately?

Nrupesh Shah, Executive Director, Executive DirectorIn our case, sales and marketing expenses absolute amount wise as well as percentage of sales includes distributioncosts, it includes logistic costs, it also includes VAT and advertisement and sales promotions. Normally our most of theadvertisement and sales promotion expenses are in June quarter.

Pritesh Chheda, AnalystOkay and your call on the advertising and promotion, what kind of spends have you budgeted?




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Nrupesh Shah, Executive Director, Executive DirectorNo. Again, your voice is broken. I am not clear.

Pritesh Chheda, AnalystI said what kind of budget do we have on the advertising and sales promotion cost?

Nrupesh Shah, Executive Director, Executive DirectorAre you referring to amount of advertising?

Pritesh Chheda, AnalystAmount.

Nrupesh Shah, Executive Director, Executive DirectorNo, so it's going to be substantial jump compared to last year. Once we complete the year, end the quarter, we willcome up with that exact number.

Pritesh Chheda, AnalystOkay. Thank you and all the best. Thank you.

Nrupesh Shah, Executive Director, Executive DirectorThank you.

OperatorThank you very much. Our next question is from the line of Atul Mehra from Motilal Oswal Securities. Please goahead.

Atul Mehra, AnalystYes, thank you. Yeah, good evening, sir. Just one question on the international market front, where you spoke aboutnew development that has taken place. So if you can just broadly elaborate on that?

Nrupesh Shah, Executive Director, Executive DirectorCan you please come closer? I can't hear you.

Atul Mehra, Analyst




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Am I audible now?

Nrupesh Shah, Executive Director, Executive DirectorBetter.

Atul Mehra, AnalystSir, you spoke about international market where you're actually looking at new developments in some kinds, so can youjust elaborate more on that?

Nrupesh Shah, Executive Director, Executive DirectorI can't hear you.

Atul Mehra, AnalystJust one second.

Renu Baid, AnalystSir, he's probably asking you to elaborate on the international markets, by [ph] you're seeing more developmentscoming through?

Nrupesh Shah, Executive Director, Executive DirectorYeah, about international market, our focus is on North America, Middle East and Southeast Asia and of course in thefirst two quarters, we have also received some major orders from the African countries and they continue to be ourpriority markets.

Atul Mehra, AnalystRight. But you also spoke about in your opening remarks about some particular development that you're looking at thedistribution or something of that sorts. So I actually missed on that. So if you can just repeat that once?

Nrupesh Shah, Executive Director, Executive DirectorThat I was referring about domestic markets. In domestic market whatever internal target we had decided in terms ofappointment of number of distributors, we have met with that. In fact it has exceeded and in terms of number ofdistributors as of now, it is up by 7% over last year.

Atul Mehra, AnalystRight. And sir, second was a more bookkeeping kind of question, I just wanted to arrive at this. So in terms of, if youjust look at the realization into the number of units that you reported. So for this quarter that will be about 134.6 crores,while the total revenues will be about 137.5 crores. So this 3 crore difference will be -- which will -- what exactly




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would this constitute?

Nrupesh Shah, Executive Director, Executive DirectorAre you referring to breakup between domestic sales and export sales?

Atul Mehra, AnalystNo, you reported two numbers in terms of realization and the number of volumes in terms of number of units sold. So ifwe'll just look at --

Nrupesh Shah, Executive Director, Executive DirectorAs far as per unit realization is concerned, it stood at about 6,328 average realization; domestic and export put together.It is (inaudible) on 5,986 of previous years.

Atul Mehra, AnalystYeah, that is right, sir.

Nrupesh Shah, Executive Director, Executive DirectorIn the last -- said the whole -- our per unit realization was 6,299. During the first nine months, it is slightly better thanthat.

Atul Mehra, AnalystNo, what I'm saying is, if we just multiply the number of units into the realization per unit, so we get about 134.6 croresin terms of sales, whereas the reported sales is about 137.5 crores. So the 3 crores, which is balanced, should we inferthat to be industrial business or what exactly would that 3 crores be?

Nrupesh Shah, Executive Director, Executive DirectorOn account of sale of spares.

Atul Mehra, AnalystSale of fans?

Nrupesh Shah, Executive Director, Executive DirectorSpares. Spare parts.

Atul Mehra, Analyst




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Spare parts? Okay.

Nrupesh Shah, Executive Director, Executive DirectorYes. So this domestic sales is inclusive of residential air coolers as well as spare parts.

Atul Mehra, AnalystRight, right. Sure sir and just -- and some update if you could highlighting in terms of how e-commerce as a channelcould be doing for you, because now you've launched the exclusive set of products for e-commerce and more if you canelaborate on whether you've been tying up with a select set of e-commerce players or you've been tying up withmultiple players and generally a strategy towards that?

Nrupesh Shah, Executive Director, Executive DirectorWe are selling through almost all available alternatives of e-commerce and we are doing reasonably well and we havedirect tie-up with e-commerce sites, but having said that, this e-commerce, there is also a marketplace model. In thesense, some of the distributors or dealers also sell directly through e-commerce platforms, on which we don't have anycontrol, neither we, nor any of the companies can have any control in terms of the pricing thereon, but as per ourexperience so far, it doesn't affect much.

Atul Mehra, AnalystRight. And right now, what percentage of our sales could be on e-commerce channel?

Nrupesh Shah, Executive Director, Executive DirectorIt's too pre-mature. I think we need to wait till year-end, because most of the e-commerce or for that matter, modernretail sales happens in March quarter and June quarter.

Atul Mehra, AnalystRight. But, in terms of early --

Nrupesh Shah, Executive Director, Executive Director(inaudible) As of now, Modern Trade, which is inclusive of e-commerce as well as TV channels, it's up by 51% overlast year.

Atul Mehra, AnalystRight and in terms of early indicators for the exclusive products that we have launched on e-commerce, so that hasbeen doing well or?

Nrupesh Shah, Executive Director, Executive Director




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It is receiving a reasonably good response.

Atul Mehra, AnalystAll right. Sure sir. That's it from my side. Wish you all the best.


OperatorThank you very much. Our next question is from the line of Gaurav Sanghavi from Bajaj Allianz. Please go ahead.

Gaurav Sanghavi, AnalystGood evening, sir. My question is related to gross margin. We have seen substantial improvement in the gross marginfor this quarter. Sir, are we --

Nrupesh Shah, Executive Director, Executive DirectorCan you speak loudly?

Gaurav Sanghavi, AnalystHello? Is it audible now?

Nrupesh Shah, Executive Director, Executive DirectorBetter.

Gaurav Sanghavi, AnalystYeah. Sir, my question is related to gross margin improvement. We think this gross margin improvement is sustainablebecause of the decline in the commodity prices?

Nrupesh Shah, Executive Director, Executive DirectorSo, at current commodity prices, it is sustainable and gross margin improvement is on account of number one,reduction in commodity prices, secondly, improvement in sales mix and third is also better economy of scale.

Gaurav Sanghavi, AnalystOkay sir, okay. And the second question is on the --




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Nrupesh Shah, Executive Director, Executive DirectorHigher core unit sales realization.

Gaurav Sanghavi, AnalystOkay, sir. The second question is on the -- our plan of acquisition, which we have put forward. So is it more of relatedto expanding our reach and it would be more of a distribution based acquisition or it's a planning of entering into kindof industrial cooling business in a particular country or it would be technology-based?

Nrupesh Shah, Executive Director, Executive DirectorYour question is not clear.

Gaurav Sanghavi, AnalystHello? Is it audible now?

Nrupesh Shah, Executive Director, Executive DirectorYes.

Gaurav Sanghavi, AnalystSir, my question is on, our plan of acquiring a company overseas, basically acquisition plan. So are we planning toacquire the company mainly to get the distribution reach in a different country or it would be sort of any technology orany other related acquisition?

Nrupesh Shah, Executive Director, Executive DirectorAbout acquisitions, whatever we have announced, I can't say anything more than that.

Gaurav Sanghavi, AnalystOkay, sir. Okay, thank you.

OperatorThank you very much. Our next question is from the line of Jaya Rathi from Capital Metrics. Please go ahead.

Jaya Rathi, AnalystHello?





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Yeah.

Jaya Rathi, AnalystGood evening, sir. I wanted to know the differential between industrial and residential air cooling business, in terms ofhow it's done in this quarter, breakup?

Nrupesh Shah, Executive Director, Executive DirectorStill in domestic market, our bulk of the business. In fact, more than 90% is from residential air coolers and rest iscentralized air cooling. As we have conveyed earlier and as I conveyed even in my opening remarks, still centralizedair cooling enterprise customer business is growing, having a long-term potential. And we have initiated, but still interms of the value and size, it is small.

Jaya Rathi, AnalystSir in 2014, we have made above 48 crores for centralized air cooling, right?

Nrupesh Shah, Executive Director, Executive DirectorNo, we haven't conveyed that.

Jaya Rathi, AnalystHello?

Nrupesh Shah, Executive Director, Executive DirectorYeah.

Jaya Rathi, AnalystIn 2014, IMPCO has made sales of 48 crores for centralized air cooling, is that right?

Nrupesh Shah, Executive Director, Executive DirectorOn a consolidated basis, in centralized air cooling, all-in-all last year, our sales was about 65 crores, out of which, bulkof it was from imports.

Jaya Rathi, AnalystAnd you have given the guidance of 1 billion revenue for a span of five years to 10 years? Is that right?





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That is not right.

Jaya Rathi, AnalystThen what is the guidance for centralized air cooling?

Nrupesh Shah, Executive Director, Executive DirectorCentralized air cooling, the guidance is medium-to-long term, that is over a period of five years to 15 years should dowell, considering in India, there is not a single investment for international company and for that matter, eveninternationally, there is not a single company having this kind of the product and technology, that is number one.

Number two, across the segments including almost all the factories, godowns, many religious segments, educationinstitutes, they are the potential customers, but it is more at a concept stage. So we have to educate the customers, wehave to educate the trades. And hence in India, we are very bullish on that in medium-to-long term.

As far as North America is concerned or some other markets are concerned, that product is well-accepted and doingwell. But having said that, in the last three years or four years in India, we have already succeeded in executingcentralized air cooling enterprise customer projects across the segments including some of these very reputed marqueecustomers.

Jaya Rathi, AnalystOkay, thank you, sir.


OperatorThank you. Our next question is from the line of Ganesh Radhakrishnan from Pristine Portfolio. Please go ahead.

Ganesh Radhakrishnan, AnalystHello, congratulations on the good set of numbers.

Nrupesh Shah, Executive Director, Executive DirectorThanks.

Ganesh Radhakrishnan, AnalystYou mentioned to an earlier question that in the month of March, your sales are affected because of the hailstorms inNorth India. So I want to know even in April, I understand, there have been some widespread rains in India and also,there is a prediction that this year, the monsoon may set in couple of weeks in advance. So I just want to know, is itgoing to have a bearing on your sales for this quarter?




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Nrupesh Shah, Executive Director, Executive DirectorIt's too early to predict anything for June quarter. But having said that, in June quarter, our sales is closely linked withthe weather. But at the same time in domestic market, we sell across the country, across the territory and across thechannels. So normally it doesn't happen that there will be a bad season early rain across all the states. But having said,of course, it is closely linked with the weather in June quarter.

Ganesh Radhakrishnan, AnalystOkay. But you surely -- your Q4 used to be significantly higher than the rest of the quarters. So now that you have astrategy of kind of spreading your sales across all the quarters, so I want to know this Q4, is it going to be significantlyhigher or is it just going to be marginally higher than the rest of the quarters?

Nrupesh Shah, Executive Director, Executive DirectorYou'll need to wait till we come up with June performance, sometime in July or August.

Ganesh Radhakrishnan, AnalystOkay and coming back to the EBITDA margins, sir, you mentioned -- it's currently running at 35%. I mean, is it that --I know, it is a sustainable level or you still see there is a room for growth there?

Nrupesh Shah, Executive Director, Executive DirectorI would talk about operating margin. Operating margin we feel at current commodity prices, not only that consideringthe pricing power of our products and branding. At operating level, it is sustainable. At EBITDA level, it is net ofoverhead sales and advertisements. So at EBITDA level, it may, it may not match the number.

Ganesh Radhakrishnan, AnalystOkay. Thank you very much.


OperatorThank you very much. Our next question is from the line of Ankit Jain from Equirus Securities. Please go ahead.

Ankit Jain, AnalystThanks for the opportunity and congrats sir on shifting to new corporate office.





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Thank you.

Ankit Jain, AnalystSo sir, I mean, what could be the total amount be invested in case of this new corporate office?

Nrupesh Shah, Executive Director, Executive DirectorStill we have shifted very recently, so still like that numbers are being complied, but broadly speaking, as we have builton our own by surging [ph] the raw material and other -- materials directly and also (inaudible) the contractors directly.And as it was done on our own, I think vis-a-vis market rate cost to a fees [ph], 50% to 60% of the market rate. But wewill come up with the cost at the end of the year, once all the figures and details are fully complied. But in our case, allthe costs including land, construction and furniture fixture is almost now fully paid off.

Ankit Jain, AnalystOkay. Sir for the first nine months, what could be our A&P spend?

Nrupesh Shah, Executive Director, Executive DirectorWhich cost?

Ankit Jain, AnalystSir for first nine months, what could be our advertisement and promotion spend?

Nrupesh Shah, Executive Director, Executive DirectorIn nine months, advertisement and sales promotion will be close to INR70 million, 7 crores.

Ankit Jain, AnalystOkay so sir, that is versus, I mean roughly 22 crore odd is what we have done in fiscal year '14?


Ankit Jain, AnalystOkay, got it. Sir, coming on to I mean next -- sir, how do you see mean this employee expenses have gone upsubstantially sequentially QonQ basis. So sir, is this is going to be the run rate going ahead?





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Our most of the advertisement and sales promotion expenses are incurred in June quarter. So the --

Ankit Jain, AnalystNo, sir, I'm talking about employee expenses. Sir, employee expenses have gone up sequentially QonQ, substantiallyalmost 25% QonQ. So sir, is this is going to be run rate?

Nrupesh Shah, Executive Director, Executive DirectorNo, so about employee expenses, the better comparison would be to see nine months, because sometimes it will nothappen. There might be increments in the first quarter or it might be in the second quarter. And similarly, the effect ofsome of the incentives may be in first quarter, second quarter or third quarter. So relevant comparison would beemployee costs stands at about 23 crores versus 19.5 crores, that is increase of less than 20%. And on the -- at thisannualized average, that is slightly less than 3 crores a month should continue.

Ankit Jain, AnalystSir, how do you see dealer inventory as on end of March quarter because of the hailstorm and all I mean, there might besome channel placement is being done and second, the off take might not up to the mark. So do you see as our Marchending, there would be substantial higher dealer inventory?

Nrupesh Shah, Executive Director, Executive DirectorEspecially in Southern India, where summer sets in early, there will be substantial lower inventory, while in other partsof the country normally summer sets in middle of March or early April. So in those parts in the current year as well asin the earlier years, as on March-end, dealers and distributors do feed on inventory.

Ankit Jain, AnalystOkay. And sir, lastly sir, how is that this new launch at Siesta has done? How is the response?

Nrupesh Shah, Executive Director, Executive DirectorNew launch of?

Ankit Jain, AnalystSiesta? New model sir in the residential air coolers, Siesta?

Nrupesh Shah, Executive Director, Executive DirectorYeah, it has received good response.

Ankit Jain, AnalystGot it. Okay, thank you, sir and all the best.




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OperatorThank you very much. Our next question is from the line of Ravi Naredi from Arihant Capital. Please go ahead.

Ravi Naredi, AnalystFirst of all, congratulations for 100 billion company. We wish it should be 1,000 billion soon.


Ravi Naredi, AnalystCompany has a policy to declare 50% profit as a dividend?

Nrupesh Shah, Executive Director, Executive DirectorCan you speak loudly?

Ravi Naredi, AnalystCompany has policy to declare 50% profit as the dividend.

Nrupesh Shah, Executive Director, Executive DirectorYes, right.

Ravi Naredi, AnalystBut every quarter, we are not getting interim dividends. So any plans for them?

Nrupesh Shah, Executive Director, Executive DirectorFor the last two years, that is starting accounting year '13-'14 we started the practice of interim dividend, that is halfyearly. So year '14-'15 is the second year where we continued the practice. As far as dividend policy is concerned, weare committed to it, that is 50% of the profit will be distributed by way of dividend. So at the end of the year, whateveris the remaining amount will be distributed.




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Ravi Naredi, AnalystOkay.

Nrupesh Shah, Executive Director, Executive DirectorAnd down the line, Board will take appropriate decision, whether is there any possibility to having quarterly payout ornot.

Ravi Naredi, AnalystOkay. Sir second, this treasury fund is for acquisition, you have mentioned in last con call, so any development in threemonths for acquisitions?

Nrupesh Shah, Executive Director, Executive DirectorI'm not clear about the question.

Ravi Naredi, AnalystYou have mentioned the treasury fund will be used for some acquisitions in last con call. So any new development inthree months for acquisitions?

Nrupesh Shah, Executive Director, Executive DirectorWe just announced today.

Ravi Naredi, AnalystOkay. No more detail will you give us?

Nrupesh Shah, Executive Director, Executive DirectorAs we have announced today, that is the detail available as of now. This is because on accounts of the non-disclose areundertaking, which we have signed, it's decided and that is how the practice is to maintain the confidentiality and feel itis at a very premature state. So as and when there will be any further development and if required, we will shareadditional details.

Ravi Naredi, AnalystSir, can you give the breakup of domestic sale and export sale in this quarter?

Nrupesh Shah, Executive Director, Executive DirectorIn this quarter, domestic sales stands at about 112 crores.




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Ravi Naredi, AnalystOkay.

Nrupesh Shah, Executive Director, Executive DirectorAnd exports, that is the rest of the world stands at about 26 crores.

Ravi Naredi, AnalystOkay. Thank you very much, sir. Okay, thank you.

OperatorThank you. Our next question is from the line of Pattabiraman from Metro Investments. Please go ahead.

R Pattabiraman, AnalystSir, I wish to congratulate you for the fabulous numbers.


R Pattabiraman, AnalystMy question is regarding the competition mainly, besides this Cello brand, what you have talked about that you've gotan injection, there is -- I read that Voltas also is coming out to this -- the air cooler segment, what is our policy tocombat that competition or will it affect us or will that competition expand in the market, do you have any idea aboutthat?

Nrupesh Shah, Executive Director, Executive DirectorDid you refer Voltas?

R Pattabiraman, Analyst(inaudible). Voltas I read now, the Voltas is also planning to enter the air cooler segment.

Nrupesh Shah, Executive Director, Executive DirectorSure. So over a period of time, many players have entered air cooler segment. Currently also in organized players, inorganized market, there are more than 7 players, 8 players and we always welcome the competition. According to us, asmore organized players enter, it will increase the size of the cake. There will be more and more awareness and there issuch a huge unorganized market, so there can also be a shift from unorganized to organized.




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We initiate the legal action only in cases where there is a ramped [ph] copy of our designs or violation of our trademark. Otherwise, we are perfectly fine.

R Pattabiraman, AnalystFine. My second question is regarding IMPCO in Mexico. Last quarter, you said that you are planning to sell out theoversized fund that you have this policy of outsourcing (inaudible). How far it has gone now or the selling of theassets?

Nrupesh Shah, Executive Director, Executive DirectorAs we announced last quarter, that process can take about two to three years. And it is progressing satisfactorily as wehave desired. But that outsourcing will happen in stages over a period of time. So at the moment, first phase ofoutsourcing is happening and that is taking place.

R Pattabiraman, AnalystFine. Now, thirdly one more question, one final question. You said for the centralized air conditioning, you've signedan agreement with HDFC Bank and ICICI Bank. How is the sale policy now? For the domestic air coolers right now, itis a cash and carry, how is -- sundry charges will go up or working capital will then drop because of servicing --

Nrupesh Shah, Executive Director, Executive DirectorRepeat your question.

R Pattabiraman, AnalystHello? You have signed an agreement with the HDFC Bank and the ICICI Bank for -- in selling centralized airconditioners in their branches.


R Pattabiraman, AnalystNow, how is the sales policy now? Do we extend any credit or is it also a cash and delivery basis?

Nrupesh Shah, Executive Director, Executive DirectorActually Symphony as a company doesn't give any credit. So the sales will always basically routed through our dealersand they are the ones who will implement the project. They will buy from us in cash and they will -- they may or maynot give credit to HDFC Bank or the banks to the customers, that's between them and the customers. As far as theCompany is concerned, all the sales is entirely by cash.




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Renu Baid, AnalystIn the past also and even currently, we have executed several orders for government institutes and other organizations.So whenever they need the credit, it is being routed through the trade channel and trade is more than happy to exchangethe credit to them and to give an advance to it.

R Pattabiraman, AnalystOkay, sir. Thank you very much. My best wishes to you for the future years.

OperatorThank you. Our next question is from the line of Viraj Mehta from Valuequest Capital. Please go ahead.

Viraj Mehta, AnalystYeah, hello sir and congrats for a great set of numbers. As you said in one of the earlier calls, the market is -- theorganized market is close to 3,000 crores -- sorry, the total market. Can you give some updated numbers in terms ofwhere the market is and how much is organized and unorganized according to you as of now?

Nrupesh Shah, Executive Director, Executive DirectorOf course, updated number we can share and even we will have a good idea at the end of the year. But as it standscurrently, total domestic market size of residential air cooler is close to 6 million units, out of which, organized marketis close to 1.2 million units and three years, four years before organized market was about 0.5 million units. And weexpect overall air cooler industry will grow on an average at about 10% to 15% and organized market should registereven better growth. And down the line, if GSPs including in the right form and shape, we expect that there will bebigger shift from unorganized to organized market.

Viraj Mehta, AnalystSure. My second question and the last question is regarding the court case that you are fighting with Cello. The court, ifI know correctly has even without hearing the other side, has given a stay on five models of Cello. Is that correct?

Nrupesh Shah, Executive Director, Executive DirectorYes, that is correct, which is on account of the strength of the design registration and (inaudible) has been very clearlyestablishing that there was ramped case of copy of our design. And not only in case of Cello, as I mentioned like and incase of some other companies also, we have succeeded that.

Viraj Mehta, AnalystAnd was it because Wim Plast was one of the earlier vendors that you had. Was it the case because of that?

Bhadresh Mehta, Chief Financial Officer




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That is true. They were our earlier OEM many years ago, maybe five, six years ago.

Viraj Mehta, AnalystOkay and so that is till what time do you expect an outcome of this and would this mean an end of story for the othercompany as far as air coolers is concerned?

Nrupesh Shah, Executive Director, Executive DirectorAs you know as of a court function, outcome can be in one day to couple of years, it is not in our control.

Viraj Mehta, AnalystCorrect. No, I just asked for your best guess about it.

Nrupesh Shah, Executive Director, Executive DirectorDifficult to say, because it's possible that at the moment it is at the level of high court, who favors loses may appeal tothe larger bench and there is also -- against that also to approach to Supreme Court.

Viraj Mehta, AnalystSure. Has the other company approached or challenged the stay order in the Supreme Court?

Nrupesh Shah, Executive Director, Executive DirectorNo. Now why should challenge? At the moment --

Viraj Mehta, AnalystNo. I asked has the other company challenged the stay order that you have got in the High Court in Supreme Court?

Nrupesh Shah, Executive Director, Executive DirectorNo, now about Cello, they have taken up with the High Court to establish their device and the matter is running onmerit basis and High Court will decide appropriately by knowing the views of both the sides.

Viraj Mehta, AnalystOkay. Thanks a lot sir and best of luck for the future.

OperatorThank you. Our next question is from the line of Kamlesh Kotak from Asian markets. Please go ahead.




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Kamlesh Kotak, AnalystHello, good evening sir.

Nrupesh Shah, Executive Director, Executive DirectorYeah, good evening.

Kamlesh Kotak, AnalystAnd congratulations for a great set of numbers.


Kamlesh Kotak, AnalystSir, firstly as you mentioned that the difference between the self supported 138 crores versus the calculated number isbecause of spare parts, right?

Nrupesh Shah, Executive Director, Executive DirectorYeah. So 138 crore is including all.

Kamlesh Kotak, AnalystSo my question is sir, where do we report the industrial clauses, is it also included in the realized that we report?

Nrupesh Shah, Executive Director, Executive DirectorSee, if you go to our primary segment in form of the home appliances.

Kamlesh Kotak, AnalystRight.

Nrupesh Shah, Executive Director, Executive DirectorIn secondary segment, we do have domestic sale than international sale. So as far as primary segments is concerned it isrecorded in our home appliances. As far as secondary segment is concerned, it is recorded for fields of centralized aircooling in India. In domestic market and as far as export, which is negligible as of now is registered in export.

Kamlesh Kotak, Analyst




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Okay. So the realized also is including that industrial cooling right, is matter right?

Nrupesh Shah, Executive Director, Executive DirectorWhen we talk about per unit realization, it is inclusive of centralized air cooling.

Kamlesh Kotak, AnalystOkay. Right. Great. Secondly, sir how much is your -- there're some extraordinary treasury gains, how much was thatin quantification of the same?

Nrupesh Shah, Executive Director, Executive DirectorRoughly it was about 4.7 crores, about 5 crores.

Kamlesh Kotak, Analyst5 crores, okay.

Nrupesh Shah, Executive Director, Executive DirectorThat was mostly taxable.

Kamlesh Kotak, AnalystOkay. And thirdly sir, what is the status for proposed (inaudible) which was to be set-up, how much progress has beenmade there?

Nrupesh Shah, Executive Director, Executive DirectorNo. It is really do start the operations in the current quarter we will commence the operations.

Kamlesh Kotak, AnalystOkay. So and what would be the utilization at our old plants sir? What would be the utilization at our Surat basis?

Nrupesh Shah, Executive Director, Executive DirectorSurat, as we said, as we lower the capacity is about 200,000 units and capacity utilization in the year '14-'15 should bein excess of 60%.

Kamlesh Kotak, AnalystOkay, great sir. Thank you very much.




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OperatorThank you. Our next question is from the line of Apurva Kumar from Jefferies. Please go ahead.

Apurva Kumar, AnalystHi, sir. I have two questions, and pardon me if I'm repeating these. I joined the call little late. Firstly, I wanted tounderstand on the demand outlook going into the summer season, what kind of demand have you seen until now?

And secondly on the impact of GST, I heard that you did mention that you will see some benefits, but can you talk alittle bit more about that?

Nrupesh Shah, Executive Director, Executive DirectorAbout demand so far it is just three weeks of the current quarter, so too premature and normally on a week-to-weekbasis or month to months basis. So we need to wait till the June end. Having said that in June quarter, demand in ourperformance is closely linked with the weather -- but or otherwise, trade sentiment, customer sentiment, everything isquite positive.

Apurva Kumar, AnalystAnd sir, has there been any impact of the unseasonal rainfalls that we saw last month?

Nrupesh Shah, Executive Director, Executive DirectorNo, as I explained for couple of weeks in March, there was some impact on account of unseasonal rain and hailstorm.

Apurva Kumar, AnalystBut at the moment, you do not see any major difference?

Nrupesh Shah, Executive Director, Executive DirectorAs of now, it is not there, but even in current month also in some parts of the country, we being such a large countryand geographically so wide-spread, something here and there also, it's still something happening.

Apurva Kumar, AnalystOkay, I understood. And sir, on the impact of GST, would you be able to like give us some sense on how much benefityou see coming through in next couple of years once GST is implemented?

Nrupesh Shah, Executive Director, Executive DirectorWe feel that GST should be highly beneficial to us, because currently unorganized sector, which is contributing close to80% of the total sales by and large is prevailing all short of taxes and broadly speaking, about 30%, 35% is the totalimpact of VAT and excise duty and other taxes. So to that extent, there is a possibility of narrowing that gap. Buthaving said that, if we need to really see in what form and in what shape GST is being introduced, because still there is




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no clarity about it.

Apurva Kumar, AnalystRight. And sir, just one last question if I can squeeze in. What proportion of your sales would be coming throughe-commerce route and is it significant at this stage?

Nrupesh Shah, Executive Director, Executive DirectorNo, of course I answered it earlier. But still it is too early, because most of the e-commerce sales starts end-February,beginning of March. You will need to wait till June-end and as far as total organized retail is concerned, which isinclusive of modern retails, e-commerce as well as TV channels. As of now, sales is up by 51%.

Apurva Kumar, AnalystOkay, that's great. Thanks a lot, sir. Thank you.

OperatorThank you. Our next question is a follow-up question from the line of Jaya Rathi from Capital Metrics. Please goahead.

Jaya Rathi, AnalystHello sir, I just wanted to understand you know like you said year after the proposed SC comes in, so what will be theguidance on the tax rate?

Nrupesh Shah, Executive Director, Executive DirectorI don't think tax rate would be say a year is about 28%. See, maximum marginal rate is 33.45% broadly it should bearound 20% year as a whole.

Jaya Rathi, AnalystOkay. And sir, with IMPCO like you said you know the Modern is going to be outsourced going forward. So can weexpect a certain working capital fee up there in terms of inventory rates?

Nrupesh Shah, Executive Director, Executive Director(inaudible) we expect that as and when it is fully implemented, which is likely to happen over the years, we expect thisasset, mainly real estate to be monetized. So whatever working capital support is being provided by Symphony Indiathat should be completely de-block and not over than about that we expect that it should also help some surplus, whichcan take care of its working capital and also future growth and more importantly on account of outsource businessmodel, it will be in a position to improve operational efficiency and also it will be in a position to focus on sales andlikely be in the sales development et cetera.




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Jaya Rathi, AnalystSir, it's too early to ask this question, but in outsourcing model, is it like we are going to get certain advance payment tothe other party for manufacturing goods?

Nrupesh Shah, Executive Director, Executive DirectorNormally, it doesn't involve any advance payment, normally these are credit. But having said that in India, we do havenine outsource facilities and some suppliers will be advance and if the spending about the credibility and their financialand as we get decent cash discount, which is substantially higher than the treasury income, then we don't mind givinglimited advances then.

Jaya Rathi, AnalystSo sir, going forward this is for modeling purposes and as looking at the working capital days and in the last two years,it has been coming down. So can I expect that it will go down further or the same cycle should continue for next twoyears?

Nrupesh Shah, Executive Director, Executive DirectorIt will be the same amount.

Jaya Rathi, AnalystSo it should be around the same. Okay. And sir just last question on rural and urban breakup in terms of volumes, soare we concentrating more in urban India or rural and what is the strategy going forward?

Nrupesh Shah, Executive Director, Executive DirectorWe believe our growth is coming across the geography, across the segment whether it is urban, semi-urban or rural. Butat the same time, we are continuously enhancing our (inaudible) and distribution network. It's a robust growth acrossthe geographies and even among urban as well as rural.

Bhadresh Mehta, Chief Financial OfficerBut when we say, rural, it doesn't mean rural (Technical Difficulty)

Jaya Rathi, AnalystProbably I would put it as a urban in Tier 2, Tier 1, Tier 2 cities?

Nrupesh Shah, Executive Director, Executive DirectorThat's right.




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Jaya Rathi, AnalystSo sir, if you could just give me breakup in sales -- even in the value terms for the domestic products, how much iscoming from urban India, if you can share that number?

Nrupesh Shah, Executive Director, Executive DirectorUrban was contributing about 30% and 70% was rural, whereas semi-urban for current year, once we announce ourJune-end results, we maybe in a position to come up with that number.

Jaya Rathi, AnalystOkay sir. Thank you so much.

OperatorThank you. Our next question is from the line of Saurabh Ginodia from Stewart & Mackertich. Please go ahead.

Saurabh Ginodia, AnalystHello?

Nrupesh Shah, Executive Director, Executive DirectorYeah, I'm there.

Saurabh Ginodia, AnalystYeah, good evening, sir. Sir, I would like to know what kind of margin profile is there in your --

Nrupesh Shah, Executive Director, Executive DirectorPlease speak loudly.

Saurabh Ginodia, AnalystHello, sir I would like to know that what kind of margin profile do you enjoy in your central air cooling business?

Nrupesh Shah, Executive Director, Executive DirectorWhich business?

Saurabh Ginodia, AnalystYour central air cooling business.




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Nrupesh Shah, Executive Director, Executive DirectorNo, in central air cooling it's almost comparable margin.

Saurabh Ginodia, AnalystAlmost comparable. Okay.

Nrupesh Shah, Executive Director, Executive DirectorIn comparable business models.

Saurabh Ginodia, AnalystOkay. Okay, that's it. Thank you.

OperatorThank you. Next question is from the line of Rabindranath Nayak from SBICAP Securities, please go ahead.

Rabindranath Nayak, AnalystThank you for giving the opportunity, sir. Sir I want to know, how much revenue we have booked in this quarter in thepackaged air cooler segment?

Nrupesh Shah, Executive Director, Executive DirectorWhich segment?

Rabindranath Nayak, AnalystPackaged air coolers.

Nrupesh Shah, Executive Director, Executive DirectorPackaged air coolers. So I don't have exact numbers. But as far as I know (Technical Difficulty) we are selling it off,meanwhile and we received good responds. But I don't have exact figures.

Rabindranath Nayak, AnalystOkay. Now, because you know, what is the typical execution period for setting up this system in a client side?

Nrupesh Shah, Executive Director, Executive DirectorAir coolers will be in number of ways, depending upon the size and kind of the installations.




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Rabindranath Nayak, AnalystOkay.

Nrupesh Shah, Executive Director, Executive DirectorExecutions period, depending upon the size and depending upon the installation, maybe two days.

Rabindranath Nayak, AnalystThe brochures that have been given in your site, that says that it is INR1,50000. So typically how -- maybe big -- theclients side would be to take this cost in to account?

Nrupesh Shah, Executive Director, Executive DirectorAbout installation time, it will be readily distributed, but we are not concerned with it, the reason being Symphony justsupplies the product. It is about the trade partner who installed it.

Bhadresh Mehta, Chief Financial OfficerSymphony doesn't execute orders or anything like that. That is being done by the dealers. And Symphony is onlyconcerned with supplying the air coolers.

Rabindranath Nayak, AnalystOkay. That cost is INR1,50,000 is -- client will bear, and what is the portion you will bear?

Nrupesh Shah, Executive Director, Executive Director1,00,000 to 2,00,000.

Rabindranath Nayak, AnalystOkay. The installation cost is client's installation cost?

Nrupesh Shah, Executive Director, Executive DirectorThat's right. This is the basic air cooler. Over and above that, there might be INR2,000, several thousand rupees of noside work as it is called, which is ducting, installation, plumbing whatever.

Rabindranath Nayak, AnalystOkay.

Bhadresh Mehta, Chief Financial Officer




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Installation cost as well as running in (inaudible) cost too on client account.

Rabindranath Nayak, AnalystOkay. So it is a normal building you can install this air coolers right, the air coolers?

Nrupesh Shah, Executive Director, Executive DirectorVery much, very much.

Rabindranath Nayak, AnalystSo there is no further customization required from the client side to implement this right?

Nrupesh Shah, Executive Director, Executive DirectorNo, no. None whatsoever.

Rabindranath Nayak, AnalystOkay, fine. Thank you, sir. And all the best.

OperatorThank you. Our next question is from the line of Pratik Chaudhari who's an individual investor. Please go ahead.

Unidentified ParticipantHello?


Unidentified ParticipantAm I audible, sir.

Nrupesh Shah, Executive Director, Executive DirectorYes.

Unidentified Participant




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Sir, it's great to see Symphony post such extraordinariness results and the market cap is almost 11,000 crores now. Socongratulations for the spectacular run Symphony has had. I have two questions.

The first one is that I want to understand how your Window range of air coolers are doing in the markets, because Ibelieve the window range seeks to target a very large part of the unorganized air cooler market. So I would basicallywant to understand how the two new models that were launched recently, which were fitted with a very powerful motorand exhaust fans, how have they done? And out of your total domestic air cooler sales in the current quarterapproximately what percentage of sales come from the Window range of air coolers?

And if you could give me some idea on how do you see the Window range of air coolers growing and what sort ofrevenue potential do you see in the next two, three years from the Window range?

Nrupesh Shah, Executive Director, Executive DirectorSo window range of the air coolers we launched in 1840 [ph] and expanded their range in the current year. And all themodels are doing very well and by launching Window Range we created one more category of air coolers just likepackaged air coolers. And it is also in competition with the unorganized. So it's doing well, I mean, good margin. Asfar as that numbers are concerned, we don't give the break up model-to-model or (Technical Difficulty) range and wedon't have the details about them and we expect this range to continue to do well.

Unidentified ParticipantAnd my second question is on the competitive intensity. Basically a lot of your competitors have been quite aggressivein launching products in the current summer season. And the few stores that I've visited in the Delhi region, I see lessand less store space being taken up by Symphony's products, which is not the case last year. So just wanted to get someidea from you as to how the competitive scenario in the industry is changing and whether any steps are being taken asfar as channel strategy or trade margins are concerned?

Nrupesh Shah, Executive Director, Executive DirectorWell, it is true that more and more players have entered and are entering in air cooler industry, just like any otherindustry. Having said that, we have maintained and we are confident of maintaining our market share. In fact last three,four years, many new players have entered and despite getting organized markets, we have not only maintained ourmarkets, we've slightly increased the market share, not only that we are considering the per unit realization, once itclearly shows that we do have a pricing power too. In fact even in off season, even though competitors try a lot, theyare in a position to sell hardly anything during the off-season.

Unidentified ParticipantSo you basically, you don't see any threat from the competitive intensity side? You don't see any threats from the newproducts that have been launched by Usha or Maharaja Whiteline or companies like that?

Bhadresh Mehta, Chief Financial OfficerThis is not new products like competition is not some new phenomenon. This has been happening for many years, thatwe introduced more products than our competitors do, so that hardly an issue.

Unidentified Participant




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Okay. Thank you, sir. Thanks a lot.


OperatorThank you. Our next question is from the line of Anuj Jain from Value Quest Capital. Please go ahead.

Anuj Jain, AnalystHello, sir, am I audible?

Nrupesh Shah, Executive Director, Executive DirectorYou are.

Anuj Jain, AnalystCongratulations for the good set of numbers. Sir, I have one question regarding the industrial solutions, the Industrialcoolers. So like when we are touching to the customers, so do we pitch ourselves or it is the trade partner who picturesto the customers for the coolers?

Nrupesh Shah, Executive Director, Executive DirectorIt is both. We do have trade partners and are being generated and this too happens to trade partner, but at the same time,some of the large project orders are also sometime (Technical Difficulty) by our sales team. But as I conveyed earlier,even if we receive the orders directly, but if it involves some credit, we prefer to route it through dealer or trade partner.So that is required being an extended candidate to the customer.

Anuj Jain, AnalystOkay, so the relationship with the customer is maintained by the trade partner, not Symphony?

Nrupesh Shah, Executive Director, Executive DirectorIt depends, it varies. Since it's just a large corporate like a bank or something like that (Technical Difficulty) is that twolevels both for as Symphony and as a trade partner. At corporate level by Symphony, at the local level and the branchlevel by the trade partner.

Anuj Jain, AnalystOkay, then it clarifies because for the large banks or the large clients it make more sense for the company to have directcontact, because then only like we can scale-up. Otherwise the dealers might have these smaller ambitions to scale uplike that?




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Nrupesh Shah, Executive Director, Executive DirectorAt the corporate level and that is always it can be, because dealers are very localized, they cannot have Pan-India [ph]relationship.

Anuj Jain, AnalystOkay, thanks, thanks for the clarification sir.

OperatorThank you. Ladies and gentlemen we will take our last question now, which is a follow-up question from the line ofApurva Kumar from Jefferies. Please go ahead.

Apurva Kumar, AnalystHi, sir. Just a clarification on the rural and urban breakup, if I heard you correctly you said that 70% of your sales comefrom the rural areas.

Nrupesh Shah, Executive Director, Executive DirectorRural is year two and year three towns and that was the case last year. It may not be rural or such.

Apurva Kumar, AnalystOkay. So this sales is basically not impacted by any slowdown that we are currently seeing in the rural areas in terms ofthe wages or in terms of income levels over there? So this is basically urban phenomenon only, right?

Nrupesh Shah, Executive Director, Executive DirectorAt least in our categories we are seeing the growth across the territory including urban as well as semi-urban and rural.

Apurva Kumar, AnalystOkay. Okay, sir thanks, thanks.

OperatorThank you. Ladies and gentlemen, as there are no further questions. I hand over the conference to Ms. Baid for closingcomments. Over to you.

Renu Baid, Analyst




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Thank you, Seth. Thank you everyone for participating in the call. On behalf of B&K Securities, I would like themanagement of Symphony for giving us the opportunity to host this call. And once again, many thanks to Mr. AchalBakeri, Mr. Nrupesh Shah, Mr. Bhadresh for being a part of the call and answering all the queries of investors.

Sir, any closing comments from your side?

Nrupesh Shah, Executive Director, Executive DirectorThanks. Thanks for participating and thanks for encouraging the remarks and questions.

Renu Baid, AnalystThank you so much, sir.

OperatorThank you, ladies and gentlemen. On behalf of Batlivala & Karani Securities, that concludes this conference call.Thank you for joining us. You may now disconnect your lines.

This transcript may not be 100 percent accurate and may contain misspellings and other inaccuracies. This transcriptis provided "as is", without express or implied warranties of any kind. Bloomberg retains all rights to this transcriptand provides it solely for your personal, non-commercial use. Bloomberg, its suppliers and third-party agents shallhave no liability for errors in this transcript or for lost profits, losses, or direct, indirect, incidental, consequential,special or punitive damages in connection with the furnishing, performance or use of such transcript. Neither theinformation nor any opinion expressed in this transcript constitutes a solicitation of the purchase or sale of securitiesor commodities. Any opinion expressed in the transcript does not necessarily reflect the views of Bloomberg LP. COPYRIGHT 2015, BLOOMBERG LP. All rights reserved. Any reproduction, redistribution or retransmission isexpressly prohibited.

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