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With Monday’s drop to a low of ₹304.55, the stock also fell 29% below its IPO listing price of ₹431. The jewellery maker debuted on Dalal Street on July 14, 2023. The last time the stock experienced a similar decline was in October last year, when it tumbled 19% in a single session.
Senco Gold’s net profit for the December quarter fell 69% year-on-year to ₹33.5 crore, down from ₹109.3 crore in the same period last year. Similarly, the adjusted profit after tax (PAT) dropped 50.9% YoY to ₹53.7 crore.
The jewellery maker attributed the decline in EBITDA and PAT margins to the impact of customs duties but remains optimistic about achieving a 7%-8% EBITDA margin going forward.
“There was an impact of ₹70 crore in Q3 due to customs duty and hedging costs,” said Suvankar Sen, MD and CEO of the company, in an interaction with CNBC-TV18. He further said that the additional cost impact was accounted for in Q2 and Q3 of FY25, ensuring there will be no impact in Q4FY25.For the financial year 2025, the company expects revenue growth of 18-20% with an EBITDA margin of 7%. The EBITDA margin guidance for FY26 stands at 7-8%. According to the company, studded jewellery witnessed weak demand in Q3 but is showing signs of improvement in Q4.
Brokerage firm Emkay Global factors in a 100 basis points lower gross margin due to high competitive intensity. Emkay has reduced its price target multiple by 10% on lower profitability and ROCE in the business, leading to a 23% cut to its price target.
The brokerage sees a 50% correction in Senco Gold as against its 52-week high as unwarranted, and an assuring explanation for the margin volatility should be the key catalyst for a re-rating.
Senco Gold shares are currently trading 8.46% lower on Monday at ₹327.35. The stock is down over 40% so far in 2025.
First Published: Feb 17, 2025 10:29 am IS
