**Results Q2 fy25
https://www.bseindia.com/xml-data/corpfiling/AttachLive/3875dbed-df7f-41d0-b935-9fc0d8d87a21.pdf
Pat impacted due to inventory loss 27 to 30 cr (duty cut by gov on gold import ) this quarter full impact on yearly basis may be around 50 to 60 cr.
non impacted PAT would have been around 40 to 42 cr
Targeting 18% growth in top line
Source:-
Othe metrics for quater were
Disc:-invested
Breakdown of Senco Gold Limited’s Q2 and H1 FY25 earnings call, capturing key insights across financial, operational, and strategic outlooks:
Current Financial Performance
• Q2 FY25: Senco saw a 27% year-over-year (YoY) revenue increase. Gold jewelry values rose by 30%, while diamond jewelry saw a more modest increase of 9%. Gold jewelry volume grew by 7%, though diamond jewelry volume dipped by 3%.
• H1 FY25: Revenue went up 18.5% YoY, with EBITDA climbing 50% and PAT rising 60%. A significant one-time impact of around Rs. 29.83 crore from customs duty adjustments affected these results, with an estimated total impact of Rs. 58-60 crore for FY25.
• Standalone Q2 FY25: Revenue improved 30% YoY, and PAT increased 33%.
• Record Sales: October 2024 marked the highest monthly sales, surpassing Rs. 1,000 crore, largely driven by festive demand.
Operational Performance
• Festive Season Boost: Strong sales during the Q2 festive period outperformed typical Q2 figures.
• Impact of Gold Duty Cut: The July duty cut reduced gold prices, spurring demand with an effect similar to Dhanteras in August.
• Diamond Jewelry Sales Efforts: While higher gold prices and a preference for gold affected diamond sales, new collections and campaigns are aimed at bolstering this segment.
• Metrics Growth: Average ticket value and selling price rose by 12%, with the number of invoices also up by 12% YoY.
• Shift to Organized Market: Old gold exchanges increased by 34%, with 62% of it being non-Senco gold, indicating a movement from the unorganized to the organized sector.
• Store Expansion: One company-operated store and four branded stores were opened, along with two new franchisees.
• Inventory and Borrowing: Inventory increased by about Rs. 301 crore, while borrowings rose by Rs. 238 crore due to higher gold prices and festive inventory buildup.
• Hedging: Senco maintained an 85% hedging position at the end of the quarter.
Future Outlook
• Revenue Growth: Management expects an 18% YoY revenue growth for FY25, with 15-18% growth in profits, focusing on cost control and enhanced diamond sales.
• Upcoming Demand: Anticipated demand for diamond jewelry due to the wedding season and recent gold price declines.
• Strategic Focus: The daily wear category is expected to drive growth in the studded jewelry segment.
• Capital Raising Plans: Aiming to raise Rs. 500 crore through a Qualified Institutional Placement (QIP) to support growth and working capital needs.
Concerns
• Diamond Sales Challenges: Despite efforts, diamond jewelry sales remain sluggish.
• Margin Pressures: Gross margins have been affected by the duty adjustment, while rising gold prices are increasing working capital requirements.
• Competitive Landscape: Competition is expected to stay intense for the next 1-2 years, with both organized and unorganized players vying for market share.
Other Highlights
• Brand Ambassador: Actor Kartik Aaryan was appointed for Senco’s men’s jewelry line.
• Technological Investments: The company is investing in new technology, customer experience enhancements, and employee training.
• Awards: Recognized by MCX as the best hedger and included in the MSCI Small Cap index. Also received the Green Ribbon Champions for Excellence award from Network18 for sustainability efforts.
Thanks for sharing the concall summary. Was there any mention about stock split? And any update on the Melorra acquisition?
I haven’t come across a moment where they talked about a stock split or the Melorra acquisition, but they did talk about “Saintare,” a premium brand for their lab-grown diamonds, and their future plans for Saintare.
You can listen to concall for more details link below
Can anyone help identify why the CFO is negative in last 3 years? Is it because of inventory? Can someone help identify how this should be looked at given the competitors are constantly showing consisten increase in CFO even with 2.5x inventory build up compared to Senco where its gone up by 1.8x ?
cfo is negative due to some accounting reason - need not to be concerned about it
Initial steps being taken towards stock split from Face Value 10/- to Face Value 5/- :
In recent QIP allotment of Senco Gold of Rs.459 Cr, Carnelian Asset Management of Mr. Vikas Khemani has been alloted 5% shares of QIP. It shows Mr. Vikas Khemani is still bullish on Senco Gold. It can not be taken as criteria to invest but such names in QIP allotment shows some comfort for long term investors.
Discl: Invested, so biased
Carnellian were the ones who had invested at the time of IPO too
Would you please elaborate? I couldn’t put my finger on what exactly is the reason. I looked at few other gold jewellers but being continuously cfo negative seems to be an odd man out for Senco.
Business Update: Q3 & 9M FY25
