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Muted revenue growth on high gold prices; store expansion on track

Senco Gold (SENCO) released its pre-quarterly update for 2QFY26. Following are the key takeaways:

Gold price trends

* Gold prices rose sharply in 2QFY26—rising 8% QoQ and 43% YoY on average—reaching an all-time high of INR1,16,500 per 10g, compared to INR1,00,800 in 1QFY26 and INR75,300 in 2QFY25.

* The rally was driven by sustained central bank buying, strong investment demand through ETFs, and resilient consumer demand despite record-high prices.

Financial and operational performance

* For 1HFY26, total revenue grew 17.8% YoY. The retail business grew 16% YoY, supported by 7.5% Same-Store Sales Growth (SSSG).

* In 2QFY26, revenue rose 6.5% YoY (miss), despite:

* – a high base in 2QFY25 due to the custom duty cut,

– a slowdown during the Shraddh period (September 7-21),

– demand diversion toward capital goods following a sharp GST reduction, and

– adverse weather conditions (heavy rains and floods) in Kolkata and West Bengal.

Store expansion and network growth

* Continued retail expansion, with five new showrooms opened in 2QFY26, bringing the total count to 184 stores (excluding Sennes).

– Includes one company-owned store in Kolkata and three franchise stores (one in Bihar, two in West Bengal)

– Opened one international showroom in Dubai

* Expanded Shop-in-Shop (SIS) presence from 19 to 24 locations

* Sennes brand expanded with one new showroom in Hyderabad, reaching eight exclusive stores and 100+ SIS counters within SENCO’s COCO and FOFO showrooms

Category-wise performance

* Diamond Jewellery continued its strong momentum since 4QFY25, delivering 12% value growth in 2QFY26, as well as 31% value and 14% volume growth in 1HFY26.

* Silver Jewellery reported a sharp 54% value growth in 2QFY26.

Marketing and Brand Campaigns

* Launched multiple festive and seasonal campaigns:

– Teej, Monsoon Edit for Diamond Jewellery, Rakhi promotions, Azadi Utsav (chain festival), and Varalaxmi

* Key brand initiatives:

– Elements of Nature campaign celebrating artistry inspired by five natural elements

– Constellation, Water, Fire, Forest, and Floral

– Aparupa 2.0 expanded the existing bridal collection in yellow gold, diamond, antique, and polki

– Everlite

– Shakti Collection launched for Durga Puja, symbolizing strength and devotion

– Gossip –

Tattva Collection introduced in silver and fashion jewellery, reflecting empowerment and self-expression

Customer engagement and sales initiatives

* Strengthened festive demand through initiatives such as:

– Flexi Advance Booking and Jewellery Purchase Schemes, boosting 3Q momentum

– Extensive Old Gold Exchange promotions to sustain footfalls despite elevated gold prices

Outlook

* 3Q is expected to be the strongest quarter of FY26, driven by Dhanteras, Diwali, and the peak wedding season.

* Inventory has been strategically built with a mix of festive and bridal collections, lightweight jewellery, and the introduction of 9K gold jewellery to cater to evolving consumer preferences.

* The overall outlook remains optimistic, supported by:

– favorable macroeconomic environment,

– higher disposable incomes post-GST cut, and

– robust festive and wedding-related demand

* Trailing Twelve Months (TTM) sales reached approximately INR68b, reflecting consistent YoY growth and strengthening brand positioning

* On track to achieve the FY26 target of 20 new showrooms, with 7-8 launches planned in 2HFY26 (3Q and 4Q)

* SENCO is confident of achieving 18-20% topline growth for FY26

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