When I try to buy some shares on Senco, I got this message. what does it mean ? can someone help me to understand pls
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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
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I believe there is one off gain in the Results, they mentioned only 95% of their inventory is under Hedge. Furthermore due to recent tax change in the next two quarters, some inventory loss is possible.
345cd75d-ee54-46e7-a87a-460083362065.pdf (1.8 MB)
Hi,
I understand possible inventory loss due to change in import duty.
But Could you share why you felt there was one-off gain in results ?
As per my understanding from the investor presentation, 95% of the gold inventory was hedged. Due to the increase in gold prices, it was benefetted to the company as 5% of the gold was unhedged. This kind of benefit is one-off in this quater and may not be available in the coming quarters.
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Senco Gold -
Q1 FY 25 concall and results highlights -
Current breakdown of number of showrooms -
Company operated - 97
Franchise showrooms - 68
Total - 165 ( spread across 109 towns and cities and 01 in Dubai )
Added a total of 06 new stores in Q1
Q1 financial outcomes -
Revenues - 1403 vs 1305 cr, 7.5 pc
EBITDA - 108 vs 67 cr, up 62 pc
PAT - 51 vs 27 cr, up 85 pc
Same Store sales growth @ 4 pc
Avg Ticket value @ Rs 73.9k vs Rs 63.7k for FY 24
Q1 Stud ratio @ 9.9 pc vs 11 pc for FY 24
( diamond sales were down by 3-4 pc in Q1 - due rising gold prices )
**Sale of recycled gold stood at 35 pc of total sales ( ie customers exchanging old gold ornaments for new ones ) **
Have launched lab grown diamonds under the Sennes brand
Aim to add about 12-14 more stores in FY 25
Aim to add about 12-14 more stores in FY 25
About 95 pc of company’s gold stocks are hedged. Due to the sharp duty cut on Gold imports announced by the GoI ( recently ), there will be an adverse financial impact of about 50 cr for the company for the remaining 9Ms this FY. However, the duty cuts have also stimulated the demand for gold and gold jewellery which should help the company offset this impact
Aim to grow topline by 18-20 pc for FY 25 vs FY 24
Depreciation charges in Q1 are 18 vs 12 cr ( up 50 pc YoY ) - mainly because of aggressive store opening in FY 24
Confident of touching a stud ratio of 12 pc for full FY 25
Growth in Q2 ( as on the date of Concall ) has been a whopping 25 pc ( triggered by duty cuts ). Hence the confidence to guide for a 18-20 pc topline growth for full FY ( with same store growth guidance @ 11-13 pc )
Also seeing healthy growth in Franchise stores in Tier -2,3 towns - probably an indication of improvement in rural economy and normal monsoons
Elevated levels of other expenses in Q1 are unlikely to continue wef Q2. The same were elevated as the company was spending a lot on brand promotion / marketing etc as the Mkt was showing weakness wef late May / Jun
Company is confident of making up for a large part ( if not for the full part ) of inventory losses of around 50 cr in the next 3 Qtrs - due increased sales, lesser discounting etc
To be on safer side, company is guiding for 15-18 pc bottomline growth for FY 25
Disc: holding, biased, not SEBI registered, not a buy sell/recommendation
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Hi guys, let me know your thoughts. Senco is a relatively small player trying to expand stores and there is also large shift taking place from unorganised to organized. Then why are they diversifiy into other business, what is the reason. If the margins are high in other business, the ticket size will be very small.
Why are they doing it. Isn’t it that they should establish themselves and then think of other stuff
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Promoter Selling 16.09.2024
Market Sale of 750001 shares worth 96.32 Crs by one of the Promoters
This is 2.18% of this promoters holdings.
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