SENCO - Senco Gold

📊 NSE: SENCO 🏢 Diamond Cutting / Jewellery 📅 Last Updated: 12/14/2025 13:00

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 15.9% YoY in H1 FY26. Franchisee-led revenue contributes approximately 36% of total operations, while company-owned showrooms contribute 64%. Q2 FY26 revenue reached INR 1,536 Cr, a 2% YoY increase, while standalone revenue grew 6.6% to INR 1,500 Cr.

Geographic Revenue Split

The company faces high geographic concentration with West Bengal alone contributing approximately 67% of total revenue and housing 51% of company-owned stores. Expansion is currently focused on Tier 2, 3, and 4 cities in East and North India.

Profitability Margins

Net Profit Margin (NPM) moderated to 2.5% in FY25 from 3.5% in FY24. Adjusted PAT margin for H1 FY26 stood at 3.2%. Gross margins are primarily driven by making charges and diamond jewelry sales, with hedging impacting margins by only 0.4% to 0.5%.

EBITDA Margin

EBITDA margin for H1 FY26 reached 8.6%. Q2 FY26 consolidated EBITDA margin saw a 340 bps improvement YoY, rising from 3.5% to 6.9%. Management maintains a sustainable full-year EBITDA margin guidance of 7.2% to 7.4%.

Capital Expenditure

The company follows an asset-light model where franchisees invest INR 15 Cr+ in inventory and INR 3 Cr+ in fit-outs per store. Senco raised INR 448 Cr via QIP in March 2025 to strengthen its net worth and fund growth without excessive debt.

Credit Rating & Borrowing

Blended borrowing cost stood at 6.9% in H1 FY26. This includes Gold Metal Loans (GML) at 4.5% and Working Capital Loans (WCL) at 9.6%. ICRA notes enhanced working capital limits of INR 900 Cr.

⚙️ Operational Drivers

Raw Materials

Gold (representing the bulk of inventory value) and Diamonds (targeted to reach a 13-13.5% stud ratio). Gold rates increased 43% YoY and 8% QoQ as of H1 FY26.

Import Sources

Not specifically disclosed in available documents, though the company is subject to Indian bullion import restrictions and custom duty regulations.

Capacity Expansion

Senco has launched 81 showrooms since FY21. Current expansion includes 8 new franchise stores opened this year with a pipeline of 4-6 more stores targeting North and East India.

Raw Material Costs

Inventory value increased from INR 3,500 Cr to INR 4,200 Cr due to gold price hikes and festive readiness. Cost of Goods Sold was impacted by a one-time custom duty reduction in FY25, which reduced margins by 133 bps.

📈 Strategic Growth

Expected Growth Rate

22%

Growth Strategy

Growth will be achieved through a shift toward lightweight jewelry (18k, 14k, and 9k) to fit consumer budgets, increasing the stud ratio to 13.5% by FY27 for higher margins, and aggressive expansion in Tier 2-4 cities. October 2025 saw record sales of INR 1,700 Cr, up 54.5% YoY.

Products & Services

Gold jewelry, diamond jewelry, platinum jewelry, and lightweight daily-wear items (18k/14k/9k gold).

Brand Portfolio

Senco Gold & Diamonds.

New Products/Services

Expansion of lightweight and budget-friendly diamond jewelry lines (9k and 14k) to attract younger demographics and budget-conscious buyers.

Market Expansion

Focusing on North and East India; South and West expansion is limited to specific hubs like Bangalore to maintain operational focus.

Market Share & Ranking

Not disclosed in available documents, though identified as a leading player in the organized East India market.

Strategic Alliances

Utilizes FOFO (Franchisee Owned Franchisee Operated) and FOCO models; over 93% of showrooms are currently FOFO.

🌍 External Factors

Industry Trends

The industry is shifting toward organized retail due to regulatory norms like hallmarking and PAN requirements. There is a growing trend toward lightweight, high-margin studded jewelry (diamonds).

Competitive Landscape

Intense competition from large national listed players and local unorganized jewelers, keeping EBITDA margins range-bound between 7-8%.

Competitive Moat

Moat is built on a strong regional brand in East India and an asset-light franchise model that yields higher ROE. Sustainability depends on successfully diversifying geographically beyond West Bengal.

Macro Economic Sensitivity

Highly sensitive to gold price fluctuations (43% YoY increase) and consumer spending during wedding seasons (Q3 and Q4).

Consumer Behavior

Shift toward lightweight designs (18k, 14k, 9k) to maintain 'look' while fitting reduced consumer budgets amid high gold prices.

Geopolitical Risks

Bullion import restrictions and global gold price volatility driven by geopolitical tensions directly impact procurement costs.

⚖️ Regulatory & Governance

Industry Regulations

Mandatory PAN disclosure on transactions above a threshold, hallmarking mandates, and SEBI/regulatory oversight on jewelry saving schemes.

Taxation Policy Impact

Subject to standard corporate tax; impacted by GST implementation and changes in import/custom duties on gold.

⚠️ Risk Analysis

Key Uncertainties

Gold price volatility (43% YoY) and the impact of custom duty changes are primary risks. A sudden drop in gold prices could lead to inventory losses despite hedging.