Senco Gold Sees Revenue Growth, Profitability Concerns Amid Margin Contraction
Senco Gold, a leading jewellery retailer in India, has reported strong revenue growth in its first quarter of FY27. The company's consolidated revenue surged 67% year-over-year to Rs 3,100 crore, beating estimates and outperforming most peers in the industry. This growth was driven by festive and wedding demand, as well as a favourable shift towards lightweight, fancy, and daily-wear jewellery.
However, profitability remained a concern for Senco Gold, with gross margin contracting sharply to 15.7% from 19.9% a year earlier. The contraction was attributed to gold price volatility, discounting, and a higher contribution from old-gold exchange transactions. Adjusted profit after tax grew just 2% year-over-year despite the strong topline.
Motilal Oswal Financial Services has maintained its Neutral rating on Senco Gold, with a target price of Rs 385, implying an 11% upside from the current market price of Rs 346. The brokerage notes that while the company's hedging practices are disciplined, leaving it more exposed to swings in gold prices than better-hedged peers.
Senco Gold plans to expand its store network by adding another 12-15 showrooms during the remainder of FY27, with an increasing tilt towards franchise-led expansion and deeper penetration into Tier-2 and Tier-3 cities. The company is also betting on product innovation as a growth lever, expanding its 9K and 14K jewellery portfolio and launching titanium jewellery.