Senco Gold continues to sparkle with robust Q1 results, overcoming multiple challenges.
Key Points:
- PAT Growth: Senco Gold’s PAT grew by an impressive 85% YoY, highlighting strong financial health.
- Sales: Q1 sales growth faced challenges due to heat waves, general elections, fewer wedding dates, and a steep rise in gold prices compared to Q4 and revenue rose merely 7.5% YoY. Despite this, management remains confident in achieving their 18-20% growth target for FY25.
- Store Expansion: Senco opened 6 new stores during the quarter, including its first international store in Dubai. The company plans to open 18-20 new stores this financial year, with 8-10 of these expected to be franchisee stores.
- Same-Store Sales Growth: Same-store sales growth was subdued at 4% in Q1, but the company has set guidance for 8-10% growth for FY25.
- Festival Sales: Akshaya Tritiya sales grew by 21% despite the broader challenges, showcasing Senco’s resilience.
- Future Outlook: With wedding dates shifted to Q2 and the festive season starting in Q2, Senco expects a significant boost in sales in the latter half of the year, driven by occasions like Teej, Independence Day, Rakhi, Navratri, Dhanteras, Diwali, and the grand wedding season.
- Industry Growth Drivers: The government’s reduction of import duty on gold from 15% to 6% is expected to be a major growth driver for the sector, accelerating the shift from unorganized to organized jewelers. This rate cut is narrowing the price gap between organized and unorganized players.
- Market Share Gains: Organized jewelers like Kalyan have already seen increased footfall due to this development, providing a much-needed boost to consumer demand.
- Stock Opportunity: The strong earnings growth has further reduced the PE of Senco’s stock, indicating a re-rating opportunity for investors.
Overall, solid plans for expansion and an optimistic outlook for the rest of FY25.
Disc. Holding. Views maybe biased. No recommendation to buy/sell
| Subscribe To Our Free Newsletter |
