Company Update : Senco Gold Ltd By Motilal Oswal Financial Services Ltd
Healthy revenue growth
Senco Gold (SENCO) released its pre-quarterly update for 3QFY25. Here are the key takeaways:
Industry update
*Gold prices dropped from their peak of USD2,787/Oz to USD2,605/Oz in Dec’24 (down 6%). Gold prices increased 24% YoY and 8% QoQ in 3Q.
*Despite the price increase, Indian consumers continued to buy gold, boosted by the customs duty reduction. Strong consumer demand was witnessed during the Dhanteras period and from the Dec’24 second week onward.
Business performance
*Revenue growth was 22% YoY in 3QFY25 (~est. 25% in 3QFY25, 31% in 2QFY25 and 23% in 3QFY24) and 19% YoY in 9MFY25.
*Retail growth was 19% YoY in 3QFY25.
*Growth in Tier 3 and Tier 4 towns outpaced growth in metro and Tier 2 cities. ? SSSG was in the 13%-14% range in 3Q .
*The stud ratio remained at 10.5%.
*Old gold contributed 38% of sales, showing the transition from unorganized to organized sectors.
*Annual average ASP and ATV for the 9M period grew by 28 % and 14%, respectively.
*SENCO opened 4 showrooms in 3QFY25 in Gwalior (MP), Dehradun (UK), Barakar (WB) and Chandaneshwar (Odisha).
Other highlights
*A new wholly owned subsidiary has been incorporated, which will drive the Sennes business as a value creation strategy.
*Sennes business will focus on the consumer lifestyle segment, which presently includes premium leather accessories, LGD and perfumes.
*The company is on track to open 18-20 stores during the year, including 10- 12 FOCO stores. ? Senco has successfully raised INR4.59b through a QIP.
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