Senco Gold — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

Senco Gold reported an exceptionally strong Q1 FY26, demonstrating robust growth across key financial metrics. The company achieved significant PAT and EBITDA margin expansion, primarily driven by strong demand for diamond jewellery and effective margin management strategies. Strategic initiatives like increasing the stud ratio, promoting lightweight jewellery, and leveraging old gold exchange contributed to this positive performance, despite rising gold prices.

Highlights

  • Overall top line revenue grew by 30% year-on-year.

  • PAT grew by 104% year-on-year, crossing INR100 crores for the quarter.

  • EBITDA margin expanded from 7.7% to 10.1% year-on-year.

  • Diamond Jewellery sales saw 36% volume growth and 54% value growth year-on-year.

  • Blended same-store sales growth (SSSG) was 19%.

  • The stud ratio increased from 9-9.5% in FY25 to over 11% in Q1 FY26.

  • Old gold exchange now accounts for 40% of total transactions, up from 25% 2-3 years ago.

  • 10 new stores were opened in Q1 FY26, including 5 franchisee stores.

Key financials

  1. Overall Top Line Growth 30%
  2. PAT Growth 1%
  3. EBITDA Margin 10.1%
  4. PAT Margin 5.7%
  5. Blended SSSG 19%
  6. Inventory (June 30, 2025) ₹3,558 Cr

What they filed

Q1 FY27: revenue up 64.8%, net profit up 9.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,459 2,023 1,362 1,825 1,554 +7%3,032 +50%1,963 +44%3,007 +65%
EBITDA56 79 126 182 108 +93%404 +411%271 +115%223 +23%
Net profit17 33 62 104 53 +212%267 +709%158 +155%114 +10%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Diamond Jewellery
    36% Volume Growth54% Value Growth
  • Owned Stores
    25% Growth21% SSSG
  • Franchisee Stores
    34% Growth16% SSSG24% Secondary Growth
  • Silver and Fashion Jewellery
    50% Growth

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · Medium confidence 18-20%
    But as a guidance, we will continue to guide all of you that, yes, 18% to 20% growth for the whole financial year shall continue to remain as we cross quarter 2, move on to quarter 3, have the Dhanteras season and experience it and how consumers are behaving on it.

    — Suvankar Sen, MD and CEO

  • Q2 FY26 Growth Revenue · Q2 FY26 · Medium confidence 16-18%
    So, I think that the growth compared to last Q2, this particular Q2 will again remain in the range of 18% to 20%, maybe 16% to 18% as on-date, if you look at it.

    — Suvankar Sen, MD and CEO

  • LGD Revenue Revenue · FY26 · High confidence below INR50 crores
    FY '26, I do not see it from our side crossing, I do not see [INR50 crores].

    — Suvankar Sen, MD and CEO

Profitability

  • EBITDA Margin Profitability · FY26 · Medium confidence 6.8-7.2%
    But I think that, that 7% EBITDA should be a conservative way of looking at the full year guidance.

    — Suvankar Sen, MD and CEO

  • EBITDA Margin (Aggressive) Profitability · FY26 · Low confidence 7.2-7.5%
    So, on an extremely aggressive side, we can take from 7.2% to 7.5%, but that is on a higher side.

    — Sanjay Banka, Group CFO & Head IR

Store Expansion

  • New Store Openings Store Expansion · FY26 · High confidence 20 stores
    And I think that, our overall aim for the financial year is to open 20 stores. We are very much in the journey of opening 20 stores.

    — Suvankar Sen, MD and CEO

  • Annual New Store Openings Store Expansion · every year · High confidence 18-20 stores
    As per the plans, we always believe in giving you a conservative estimate and an approach. And so, from that perspective, we have always said that we want to open 18 to 20 stores every year, year-after-year, funded by the profits, funded by the equivalent amount of debt that we have.

    — Suvankar Sen, MD and CEO

  • Franchisee vs. Owned Store Mix Store Expansion · ideal case · Medium confidence 65-70% franchisee, 25-30% owned

    Previously 50-50% → 65-70% franchisee, 25-30% owned

    But our internal efforts are always that, that 50%-50% can become 70% -- 65%, 70% franchisee and 25%, 30% owned stores. So, this is how we would like to do it in an ideal case.

    — Suvankar Sen, MD and CEO

Product Mix

  • Stud Ratio Product Mix · null · Medium confidence 15%
    So, what we have said is that we want to take the stud ratio to 15%.

    — Sanjay Banka, Group CFO & Head IR

Risk Management

  • Hedging Ratio Risk Management · null · High confidence 50-80%
    But the Board policy clearly say minimum 50% hedging. And we've always said that hedging will be between 50% to 80%.

    — Sanjay Banka, Group CFO & Head IR

Risks & concerns

  • Gold price volatility and its impact on liquidity and hedging.

    medium

    High gold prices increase working capital requirements for hedging, leading to a temporary reduction in hedging ratio to maintain liquidity, but managed by dynamic policy and making charge adjustments.

    Management acknowledged

  • Competition in the jewellery market.

    low

    Management believes the market is large enough for all players and focuses on design, brand building, and innovation rather than just pricing, with making charges not expected to decrease significantly.

    Management acknowledged

Q&A highlights

3 direct
Impact of lightweight/lower-carat jewellery on revenue and margins. Direct
So, it is not really the lower purity of products that there becomes a risk of the ticket sizes going down because there is a range of INR10,000 to INR20,000 products which is of the lower ticket size of 9-carat and 14-carat, which is in demand for the young generation consumer.

Clarifies management's strategy to cater to budget-conscious consumers with lower caratage without significantly impacting overall ticket sizes or margins, especially through studded designs.

Asked by Mihir Shah

Sustainability of Q1 margin expansion and hedging policy. Direct
So sustainable EBITDA margin, we are looking at in a range-bound manner only, not what has come in quarter 1... We had increased our making charges in due to the expected GML price rise. And while the GML price is coming back to an original level, we have not reduced our making charge.

Explains the drivers of the strong Q1 margin (making charges, diamond realization, lower hedging) and sets realistic expectations for full-year margins, indicating Q1's high margin might not be fully sustainable.

Asked by Videesha Seth

Long-term strategy for store expansion (FOCO vs. COCO) and liquidity management. Direct
But our internal efforts are always that, that 50%-50% can become 70% -- 65%, 70% franchisee and 25%, 30% owned stores. So, this is how we would like to do it in an ideal case.

Reveals the company's strategic shift towards a higher proportion of franchisee stores to manage liquidity and capital expenditure, aligning with industry best practices for faster, asset-light expansion.

Asked by Bhavya Gandhi

2 min read 6 chapters

Detailed narrative

Robust Q1 FY26 Performance Driven by Diamond Jewellery and Margin Management

Senco Gold reported an exceptionally strong Q1 FY26, with overall top line revenue growing by 30% year-on-year and PAT surging by 104% to cross INR100 crores. This performance was significantly bolstered by diamond jewellery sales, which saw a 36% increase in volume and 54% in value. The company's EBITDA margin expanded notably from 7.7% in Q1 FY25 to 10.1% in Q1 FY26, attributed to strategic making charge increases and better diamond realization.

Strategic Focus on Lightweight and Lower Caratage Jewellery

To counter rising gold prices and cater to a broader consumer base, Senco Gold is actively promoting lightweight and lower caratage (9-carat, 14-carat, 18-carat) jewellery, particularly in studded designs. The average ticket size for products below 7-8 grams is INR50,000-INR60,000, and 9-carat jewellery is priced around INR3,500-INR3,800 per gram, making it accessible for budgets below INR10,000-INR15,000. This strategy has helped maintain consumer demand despite a 30% year-on-year increase in gold prices.

Dynamic Hedging and Inventory Management

The company employs a dynamic hedging policy, maintaining a ratio of 55-60% in Q1 FY26, down from 75-80% in the previous financial year, to manage liquidity amidst gold price volatility. The total inventory as of June 30, 2025, stood at INR3,558 crores, up from INR3,299 crores in March 2025. Management noted that a lower hedging ratio contributed approximately 100-120 basis points to the Q1 gross margin, but emphasized that the board policy mandates a minimum 50% hedging.

Expansion Strategy with Focus on Franchisee Model

Senco Gold opened 10 new stores in Q1 FY26, including 5 franchisee stores, and aims to open 20 stores for the full financial year. The long-term strategy is to shift towards a higher proportion of franchisee-owned, franchisee-operated (FOFO) stores, targeting an ideal mix of 65-70% franchisee and 25-30% owned stores, up from the current 50-50 split. This approach is intended to support asset-light expansion and improve liquidity.

Strong Same-Store Sales Growth and Old Gold Exchange

The company achieved a blended same-store sales growth (SSSG) of 19% in Q1 FY26, with owned stores growing at 21% and franchisee stores at 16%. A significant driver of consumer engagement and sales has been the old gold exchange program, which now accounts for 40% of total transactions, a substantial increase from 25% two to three years ago. This indicates strong customer loyalty and a successful strategy to facilitate purchases.

Outlook and Guidance for FY26

Senco Gold maintains its full-year FY26 revenue growth guidance at 18-20% and a conservative EBITDA margin guidance of 7% (within a range of 6.8-7.2%). For Q2 FY26, the company anticipates growth in the range of 16-18%. Management expressed optimism for a strong Q3, driven by upcoming festive seasons like Durga Puja and Diwali, and expects wedding demand to pick up significantly in Q3 and Q4.

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