Senco Gold share price plunges 10% on lower Q1 profit, weak margins

Senco Gold share price today: Senco Gold shares today snapped a two-session gaining streak, plunging 10 per cent after the jewellery retailer reported June quarter results (Q1FY27) that fell short of Street estimates.

 

The stock opened 9 per cent lower at ₹376 and slipped further to an intraday low of ₹361.90 on the National Stock Exchange (NSE). In the previous two sessions, the counter had gained a little over 3 per cent.  Senco Gold Q1 results

 

Senco Gold, which is engaged in the retail and manufacturing of gold and diamond jewellery, reported a 3 per cent Y-o-Y decline in consolidated net profit to ₹101.1 crore in Q1FY27, compared with ₹104.7 crore in the year-ago quarter.

 

 

The PAT margin declined by 240 bps to 3.3 per cent in the June quarter of FY27 from 5.7 per cent in the June quarter of FY26.

 

Its revenue, however, jumped 67 per cent Y-o-Y to ₹3,056 crore from 1,826.3 crore in the corresponding quarter of the previous fiscal.

 

Ebitda rose 16 per cent Y-o-Y to ₹213.1 crore in Q1FY27, from ₹183.6 crore a year earlier. Ebitda margin, however, contracted by 310 basis points to 7 per cent from 10.1 per cent in the year-ago period due to the sharp fall in gross margins.

 

Employee expenses rose 22 per cent Y-o-Y in the quarter, while other expenses grew 86 per cent.

 

The company said that retail sales increased by 50 per cent Y-o-Y to ₹2,651.5 crore in Q1 FY27, while SSSG grew aggressively by 39 per cent. 

 

The company said that subsidiary Sennes Fashion Limited is still in the growth phase and incurred losses, while the Dubai entity (SGJTL) incurred losses due to an extraordinary market situation amid geopolitical uncertainty and war, while SGAPL reported profit. 

 

Due to gold price volatility and unavailability of Gold Metal Loans (GML), the company said that its blended borrowing cost increased marginally in the quarter. 

 

During the quarter, the company opened 8 showrooms to take the total count to 209. The company said that it remains on track to open another 12–15 showrooms during the remainder of FY27.  Senco Gold: MOFSL keeps 'Neutral' 

 

Post quarterly earnings, analysts at Motilal Oswal Financial Services have retained a 'Neutral' rating on Senco Gold with a target price of ₹404.

 

The brokerage said that Senco Gold reported strong revenue performance in Q1, backed by a favorable festive calendar and summer wedding season. However, the company missed on the margin front.

 

Senco, in its pre-quarter business update, had indicated that gold prices remained elevated Y-o-Y but declined Q-o-Q, while the customs-duty increase resulted in around 9 per cent higher domestic gold prices. The decline in gold prices and heavy discounting during Q1 likely impacted the benefit and margins. As inventory gets liquidated and hedges unwind, Senco expects the benefit to be more visible in Q1.

 

"The benefit from higher gold prices is expected to accrue over Q1-Q2, supported by the company’s around 50 per cent hedging position," MOFSL said.    Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers' discretion is advised.