The shares of the leading jewelry retailer gained up to 10 percent after the company’s board approved fundraising up to Rs 500 crore and a stock split in the ratio of 1:2.
With a market capitalization of Rs 11,425.59 crore, the shares of Senco Gold Ltd were trading at Rs 1,470.05 per share, increasing around 4 percent as compared to the previous closing price of Rs 1,404.45 apiece.
Reason for Rise:-
The company shares have seen such a bullish movement after Senco Gold Ltd’s board of directors approved fundraising by way of issuance of Equity Shares, and/ or securities convertible into Equity Shares, for an aggregate amount not exceeding Rs. 500 crores.
Moreover, the board also approved a stock split in the ratio of 1:2 which means a Sub-division/ split of 1 equity share having a face value of Rs. 10 each into 2 equity shares having a face value of Rs. 5 each.
Financial Condition:-
Analysing Senco Gold Ltd’s financial performance, revenue increased by 8 percent from Rs 1,304 crore in Q1FY24 to Rs 1,415 crore in Q1FY25. During the same duration, net profit increased by 89 percent from Rs 28 crore to Rs 53 crore.
Remarkable Return:-
The stock has delivered returns of 82.20 percent in the last six months and a multi-bagger return of 145.60 percent in a year. A shareholder’s investment of Rs. 1 Lakh in the company would be worth Rs. 2.45 Lakh in a year.
Store expansion & Market dynamic:-
The company expanded by opening 6 new stores in Q1 FY25, with 4 company-owned and 2 franchise-operated, aiming for a total of 18-20 stores this year, including one in Dubai. This growth is key to reaching a broader customer base and boosting sales.
Gold price volatility impacted consumer sentiment, leading to higher demand for big-ticket wedding items, while smaller purchases saw a decline. However, a 9% duty cut is expected to enhance demand, driving increased foot traffic and sales across both wedding and non-wedding categories.
Management guidance:-
Management is confident in achieving 18-20% top-line growth for the year, driven by expected sales increases following the duty cut. Plans include adjusting discount strategies to remain competitive while protecting margins and aligning with market conditions to ensure sustained growth and profitability.
Recent product launched:-
The company launched the Gathbandhan wedding jewelry collection, attracting its target audience. Additionally, efforts to boost diamond sales continue despite market challenges, with a focus on optimizing stock levels to meet demand and support growth in this segment.
Company Profile:-
Senco Gold Limited offers gold and diamond jewelry, but it also sells silver, platinum, precious and semi-precious stones, as well as other metals. The Company’s additional items include costume jewelry, gold and silver coins, and silver cutlery.
Written by:- Abhishek Singh
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