Senco Gold – A worthy competitor to Titan –
Q2 concall highlights –
Sales – 1144 vs 911 cr
EBITDA – 39 vs 33 cr, Margins @ 3 vs 4 pc
PAT – 12 vs 9 cr
Demand for Gold Jewellery remains strong. Slowdown seen in the demand for big Diamonds. Demand for smaller Diamonds remains strong
Company has added 06 stores in Q1 and 03 stores in Q2. Out of these, 03 were franchise owned and 06 were company owned
In Oct 23 alone, company added 08 more stores ( 01 of them was franchise owned ) taking the total store count to 153 stores. Aim to add 07-08 stores for the remainder of FY 24
Aim to add a total of 04 more franchise stores this yr
Avg sales / store @ 33 cr/annum. For company owned stores, this figure is 38 cr/annum
Continue to maintain growth guidance of 18 to 20 pc for FY 24 with an upward bias. Last yr total sales were 4076 cr
Company maintains a comprehensive hedging policy. Unlikely to gain/loose much ( beyond 5-7 cr ) due sudden rise/fall in Gold prices
H2 margins are always better than H1 due better absorption of fixed costs due higher sales. Gross margin guidance for full FY @ 15-16 pc
Most of company’s franchise stores are located in tier 2-3 cities
Expect EBITDA margins to bounce back to historical levels in Q3
Consumer demand for Jewellery has not been affected by high gold prices ( YoY )
Company’s STUD ratio (ratio of Diamond : Gold sales) currently at 11.8 pc. Aim to take it to 15 pc over medium term ( next 3 odd yrs ). At company owned stores, STUD ratio is already at 13.5 pc. STUD ratio is much better in North India vs other parts. Better STUD ratio helps expand Gross Margins
In H1, company has grown by 28 pc. Out of this 15 pc is attributed to price growth and 13 pc to volumes
Gold sold with Diamond jewellery is generally 14 or 18 carat gold
Seeing good demand for Men’s Jewellery ( chains and bracelets )
Company’s main focus at present is in North and Eastern India. Likely to continue to tread cautiously in West and South India
Currently company has 10 stores each in Delhi NCR and UP
Avg transaction value in H1 has been around 66k vs 54k LY
Repeat customer sales at about 64 pc
Senco remains No 2 most Desired jewellery brand in India
Because of higher Stud ratios in North India, company aims to hit a stud ratio of 25 pc in North India. Chandigarh store already has a stud ratio of 24 pc
Next 3 yrs store opening guidance @ 25 stores / yr. Out of these, 17-18 stores / yr shall be company owned and the rest be franchise owned
Disc: holding, biased, looking to buy more, not SEBI registered
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