WHEN I LOOK AT THE WAY THE STOCK MARKETS HAVE VALUED OUR COMPANY I CANNOT BUTRECOLLECT THE DAYS WHEN WE WERE A LOSS-MAKING COMPANY JUST EIGHT YEARS AGO.
There was no cash on the books our products were considered me-too our dealers hadvirtually given up on the brand and amusingly (now that I can afford to use the word) theonly constant at the Company was revenue invisibility.
We didn't know where our sales and profits were coming from.
At such a juncture the kind of advices that we encountered were varied. Some suggestedthat it might be a better idea to once and for all shut this business of manufacturinglifestyle appliances and move to the more predictable (if conventional) family business ofreal estate development.
Which brings me to the first Rule of Symphonomics.
Trust your vision.
At a time when most people had given up on the Company just a small handful ofindividuals kept the faith. 'Achalbhai productma kai problem nathi' they wouldsay 'It is just that we are working on the right thing in the wrong way.' So at a timewhen we were passing through our lowest ebb and it appeared most convenient to cut lossesand exit intellect prevailed over emotion. The result is that we just stuck right on.
We continued to believe that one of the first things that people aspired to own in lifewas a residential cooling product ideal for a tropical country where harsh summertemperatures generally climbed in excess of 450C in most parts of the country.So even as people were writing the air cooler off as down-market we were convinced thatthere was a really large consuming population that were yet to buy their first coolingproduct and when they possessed the resources to do so they wouldn't leap towards it wasa tricky waiting game: would our patience run out faster than incomes rose? we didn'tknow; we just hung in there - and got lucky.
The air-conditioner but would take the tentative first step towards the air coolerinstead. It was a tricky waiting game: would our patience run out faster than incomesrose? We didn't know; we just hung in there - and got lucky.
Which brings me to the second Rule of Symphonomics.
Transform your handicaps into opportunities.
A decade ago we had no cash there was red on our books but we could see that atrickle-down in incomes was beginning to result in a traction for air-coolers. We had someproduction capacity available so we addressed the increase in demand by producing aircoolers within. The first big challenge transpired when we consumed this capacity and werenow required to commission additional capacity. The normal thing would have been toutilise whatever scant accruals we had generated mobilise a loan and get some extracapacity going. It was at this point that we took another
fundamental call: that we were not really a manufacturing company that also marketedair-coolers; we were principally an evangelistic air-cooler company whose principal focuswas to market air-coolers. The nuance helped clarify who we were within our own minds; theresult was that the next time we were required to commission an expansion we took afundamentally different stance. We refused. Instead we outsourced. What was initiallydismissed as a dangerous decision - 'Achalbhai our vendors will hold us hostageand we will have no control over product quality' - proved to be an inflection point. Webegan to emerge as a fiercely market-driven company instead; the conventional obsessionwith 'What is the maximum that we can produce?' began to be replaced with 'How much morecan we sell?' What was conventionally a focus on the day's run rate ('How much did we rolloff the second shift yesterday?') now evolved to 'What does the customer truly want Whichbrings me to the third Rule of Symphonomics.
The only rule is to break all rules.
Once we had seen through the worst the quiet optimism at Symphony was that we couldachieve virtually anything. No cockiness no arrogance no complacence. Just a simplerecognition that if we could have returned from the brink then there was nothing thatcould faze us any longer. They say that when someone has had a near-death experience theperson can be transformed for life. This happened to us. We became more daring. We trustedour instinct. We scoffed at pessimism. We distrusted the conventional. The result is thata new code was written into our DNA. We would push the envelope we would explore thelateral. So over the years we introduced a wider range of air-coolers we created largeAC-like air-coolers we launched premium air-coolers we put air-coolers on castors andthen extended from the tried and tested residential air cooling space to central aircooling solutions through an acquisition in Mexico. Just about everything the purists hadwarned us against we implemented - and succeeded.
The result is that our convention-disregarding company consistently reports annualrevenue growth that is higher than the sectoral average. We did this in 2013-14 and indoing so
reported a profit after tax that was RS106 crore on a consolidated basis and RS99 croreon a standalone basis the highest in our existence. What gives me the biggestsatisfaction is that we achieved this without any external borrowing or banking funds anindication of our terms of trade and a validation of our precious Symphony brand.
Someone looking at our market capitalisation of RS3492 crore will scarcely believethat we were just a RS3 crore company a decade ago. The kind of value that the market hasbeen willing to place on our capacity to sustain our growth has been far higher 33 timesour 2013-14 consolidated profit after tax - than the kind of value that we have created onour Balance Sheet.
Vindicating the argument that in the eventual run of things our capacity to thinkdifferent lateral and contrarian in a consistent way will prove to be the biggestvalue-driver in a world where people find comfort in the safe tried and tested.
There is just one word to sum it all
Chairman and Managing Director