Senco Gold, a major player in India’s jewellery retail market, saw its shares jump by 9% in early trading today, hitting a seven-week high of ₹1,129 per share. The surge in stock price followed the company’s impressive financial results for the quarter ending in June, which have significantly bolstered investor confidence.
The company reported a 7.5% increase in consolidated revenue from operations, reaching ₹1,403.89 crore. This growth was driven by a 9.6% year-over-year increase in retail sales, and same-store sales growth (SSSG) came in at 4%.
Notably, Senco Gold’s sales during Akshay Tritiya, which accounted for the first 41 days of the quarter, showed a remarkable year-over-year growth of 21%, despite challenges such as extreme heat, the Lok Sabha elections, and a decrease in the number of wedding days. These results exceeded market expectations and reinforced the company’s strong market position.
On the profitability front, Senco Gold’s consolidated EBITDA rose sharply by 61.82% year-over-year, from ₹67.20 crore to ₹108.73 crore. The company’s EBIT also saw significant growth, increasing by 60.6% to ₹102.96 crore, with an EBIT margin of 7.3%.
At the bottom line, Senco Gold’s PAT surged by an impressive 85.3% year-over-year, reaching ₹51.27 crore. These robust financials highlight the company’s ability to maintain healthy margins and drive profitability, even in a challenging economic environment.
During the quarter, Senco Gold expanded its showroom network, adding six new locations, including one in Dubai, bringing the total to 165 showrooms. This expansion is part of the company’s broader growth strategy, which includes both Company Owned Company Operated (COCO) and Franchisee Owned Franchisee Operated (FOFO) models. The company’s international expansion, along with its continued growth in India, positions it well for future success.
In line with its Environmental, Social, and Governance (ESG) commitments, Senco Gold has increased the percentage of sales from recycled gold, rising from 32% to 35%. Approximately 43,000 customers benefited from this initiative in the first quarter. This focus on sustainability is in line with the growing consumer preference for eco-friendly and socially responsible practices, and it further enhances the company’s brand reputation.
Looking ahead, Senco Gold is preparing for a busy festive season in the second quarter and the second half of the year, with key events such as Rakshabandhan, Independence Day, Teej, Durga Puja, Navratri, Dhanteras, Diwali, and the wedding season. These events are expected to drive significant demand for jewellery, and the company is optimistic about its prospects during this period.
Additionally, the recent reduction in customs duties on gold and silver from 15% to 6% and on platinum to 6.4% by the Indian government is expected to boost domestic value addition in gold and precious metal jewellery. This reduction is likely to stimulate future demand, particularly the pent-up demand from the first quarter, and could lead to higher footfalls and increased market share for organized players like Senco Gold.
Senco Gold’s Chief Financial Officer, Sanjay Banka, emphasized the company’s commitment to managing gold price volatility through a robust risk management policy.
He noted that the company consistently maintains a sell/short position on gold, including unfixed Gold Metal Loans (GML), regardless of market conditions. This approach, combined with hedge accounting and weighted average pricing for gold, helps the company maintain stable and consistent margins over time.
As Senco Gold prepares for the upcoming festive season and continues to execute its growth strategy, the company is well-positioned to capitalize on the positive market dynamics and further strengthen its financial performance in the coming quarters. Investors will be watching closely to see how the company navigates the festive season and whether it can sustain the momentum it has built in the first quarter.
