Monday 16 May 2016

Symphony net profit likely to decline in Q4

Symphony, one of the leading consumer goods companies in the country, will announce its financial results for the fourth quarter ended March 31, 2016 on on May 17.


Symphony, one of the leading consumer goods companies in the country, will announce its financial results for the fourth quarter ended March 31, 2016 on May 17.

IIFL estimates the company’s net profit to be at Rs.34 crore, which constitutes a 28.1% drop qoq and 6.1% yoy.

As per IIFL’s forecast, the company is expected to register a net revenue of Rs.140 crore, declining at 22.9% qoq and 4.0% on yoy basis.

Operating profit margin of the company is likely to be at 30.0%, a fall of 496 bps yoy and 317 bps qoq.

According to IIFL, the past couple of quarters had witnessed lower commodity prices, which benefitted the consumer companies significantly from lower COGS (Cost of Goods Sold) inflation or deflation in some cases. Though raw‐material prices remain benign, headroom for further gross margin expansion in Q4FY16 seems limited compared to Q4FY15. The companies had utilized much of the gross margin expansion for higher brand investments and promotions.

Other key Q4 results on May 17 are Glaxosmithkline Consumer Healthcare, Mahindra Holidays & Resorts, Bharat Forge, MPS Ltd, MT Educare, OCL India, Motherson Sumi Systems, and Voltas Limited.

Our preview coverage universe of 374 companies, representing ~75% of India’s equity market cap is expected to report 4.2% yoy drop in net profit in Q4 FY16. On a qoq basis, profits will rise by 17% on account of low base of preceding two quarters, which had witnessed sequential PAT declines.

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