Senco Gold Limited: Q3 FY25 Earnings Call

February 20, 2025 · 3 min read

Earnings Call Transcript Analysis Report #

Revenue Growth: Consolidated revenue grew by 27% in Q3 YoY and 22% for 9 months. Retail revenue grew by about 19% YTD and 22% in Q3.
Topline Performance: Crossed Rs. 2,100 Cr in Q3.
EBITDA and PAT: Adjusted EBITDA for 9M FY25 was 4.8% versus 7% in the previous year. Adjusted PAT was 2.1% versus a higher PAT of the previous year.
Stud Ratio Impact: Decline in stud ratio impacted EBITDA and profit.
Adjusted EBITDA: Q1: 7.8%, Q2: 5.9%, Q3: 5.3%. YTD adjusted EBITDA is 6.2% vs 7.1% in FY24.
Gross Margin Guidance: Gross margin is in the range of 14% to 15%.
Revenue Target: Expecting to cross Rs.6,200 crore as the year ends.

Store Expansion: Opened 14 stores; aiming for 18-20 stores by fiscal year-end. Target of opening 20 stores in the next financial year (8-10 company-owned and 8-10 franchisees).
Brand Expansion: Formed Sennes Fashion to open lab-grown diamonds, leather bags, and perfume stores. Sennes Fashion already launched with four stores in Calcutta.
Dhanteras Sales: Had a great Dhanteras with Rs.1,000 crore sale in October.
Sennes Fashion Objective: To keep it as a separate legal entity and have a more focused operation for the lifestyle business.

Diamond Sales Growth: Diamond sales have started picking up, with a 59% growth year-on-year in the last 3 months.
Consumer Demand: Robust consumer demand despite high gold prices, with a minimum volume impact of -1% in gold YTD.
Competitive Pressure: Competitors offering huge discounts on gold prices.

Duty Cut Impact: Took into account Rs.58-60 Cr duty cut impact on overall numbers.
Stud Ratio Pressure: Short-term pressure on diamond jewellery sales.
Hedging Costs: Loss on account of hedge position; hedging loss of Rs.94 Cr in Q1, Rs.2 Cr in Q2 and Rs.6.5 Cr gain in Q3, totalling to a loss of Rs.89 Cr in 9M FY25
Metal Gold Loan Interest Rate Hike: Metal gold loan interest moving up to about 6% to 7%, impacting approximately Rs.7 Cr to Rs.8 Cr on the overall numbers.

EBITDA Expectation: Expecting about 7% to 7.5% EBITDA by year-end.
Growth Projection: Aiming to grow at 18% to 20% in the next financial year as well.

Studded Mix Question: An analyst questioned the impact on revenue due to lower studded mix sale, which was confirmed by management.
Gold Price Inflation Questions: Analysts questioned how Senco will maintain margins with gold inflation to which management responded they have hedged 80%.
Gross Margin Concern: Analyst was perplexed about the impact of the hedging on the gross margin.

Confident: Management expressed confidence in robust Q4 performance and maintaining growth trajectory.
Transparent: Management openly addressed concerns regarding margin pressures and provided detailed explanations for variances.

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