Senco Gold — Q3 FY26 earnings call

Call held 13 Feb 2026

Management summary

Senco Gold delivered a historic Q3 FY26, achieving INR3,000 crores in revenue and significant margin expansion despite volatile gold prices and volume degrowth. The company leveraged product innovation, hyperlocal strategy, and technology for inventory management, while also securing a strong credit rating. Management remains optimistic about future growth, focusing on franchisee expansion and strategic acquisitions like Melorra to capture new market segments.

Highlights

  • Q3 FY26 Revenue of INR3,000 crores, marking a 50% YoY growth.

  • EBITDA for Q3 FY26 at INR404.6 crores, a 406% YoY increase, with an adjusted EBITDA margin of 13.2%.

  • PAT for Q3 FY26 stood at INR264 crores, up 689% YoY.

  • 9M FY26 Adjusted PAT grew 200% to INR417 crores.

  • Secured an A1 credit rating from CareEdge, projected to reduce blended ROI by 30-40 basis points next year.

  • Successfully managed inventory with AI-based software, keeping inventory days between 166-188 days.

  • Strategic focus on lightweight, 9-carat, and 14-carat jewelry helped cater to consumer budgets amidst high gold prices.

Concerns

  • Gold volume degrowth of 3% in Q3 FY26 and 10% for 9M FY26 due to high gold prices.

  • Customer advances growth was softer in December 2025 due to Dhanteras redemptions.

  • One-time extraordinary impact of INR6.2 crores from the new labour code.

Key financials

2 periods

Q3 FY26

  • Revenue
    ₹3,000 Cr
    YoY +50%
  • EBITDA
    ₹404.6 Cr
    YoY +406%
  • Adjusted EBITDA Margin
    13.2%
  • PAT
    ₹264 Cr
    YoY +689%
  • Gold Volume Growth
    —
    YoY -3%

9M

  • FY26 Consolidated Revenue Growth
    —
    YoY +30%
  • FY26 Adjusted EBITDA
    ₹694 Cr
    YoY +133%
  • FY26 Adjusted PAT
    ₹417 Cr
    YoY +200%
  • FY26 EBITDA Margin
    10.8%
  • FY26 Gold Volume Growth
    —
    YoY -10%
  • FY26 Diamond Volume Growth
    —
    YoY +12.5%

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.

Capital allocation

high confidence
  • Debt Debt disclosed
    Our working capital limit, which is INR2,400 crores.
  • M&A Melorra Acquisition · Pending regulatory

    Connect with Gen Z, millennials, add design-centric portfolio.

    So Melorra is one of our one of the many strategies that we have to connect with the Gen Z, millennial, young generation customers... So therefore, this will only add to the portfolio of design centric and catering to the young generation. And that is how it is, and then we will -- once the full acquisition is in place, currently it is the Board's approval that has come in place, and the final thing is still pending.

Guidance & targets

Revenue

  • Q4 FY26 Revenue Growth Revenue · Q4 FY26 · Medium confidence 25%+
    This particular quarter, we hope that we will be 25% plus growth that will continue to happen.

    — Suvankar Sen

  • FY27 Revenue Growth Revenue · FY27 · High confidence 20%+
    And going forward, for the coming year, we shall remain focused and strong... and have a growth of 20% plus for the coming financial year as well.

    — Suvankar Sen

  • Non-East Revenue Revenue · FY27 · Medium confidence INR1,700 crores
    At least around INR1,500 crores to INR1,600 crores, off the top. But maybe so we have to recheck the number for FY '27. But INR1,700 crores clearly.

    — Sanjay Banka

  • Non-East Market Growth Revenue · Ongoing · High confidence 25-30%
    So we are continuously looking at 25%, 30% growth in the non-East market, while an 18% to 20% growth in the East market.

    — Suvankar Sen

  • East Market Growth Revenue · Ongoing · High confidence 18-20%

    — Suvankar Sen

Profitability

  • FY27 Sustainable EBITDA Margin Profitability · FY27 · High confidence 7.5-7.8%
    Yes, this is absolutely correct, provided the price range remains elevated. See, we are talking about the current price ranges. Otherwise, between 7.3% to 7.5%, at an elevated price level 7.5% to 7.8%.

    — Sanjay Banka

Store Network

  • Store Additions Store Network · Next year · High confidence 18-20 stores
    Next year, sir, we continue to focus on 18 to 20 stores. Our focus will be on opening more franchisee stores, broadly 8 to 10 own stores, 8 to 10 franchisees. If possible, we will open more franchises and fewer of our own stores. But 18 to 20 stores is our next year's guidance.

    — Suvankar Sen

Cost of Debt

  • Blended ROI Reduction Cost of Debt · Next year · High confidence 30-40 basis points
    And we are very confident that with the enhanced rating from CARE, we can look at reducing the blended ROI by 30, 40 basis points in next year.

    — Sanjay Banka

What to watch in Q4 FY26

Q4 FY26 Revenue Growth

Next quarter (Q4 FY26 results)
Current 25%+ guidance (conservative)
Target Actual growth vs. 25-35% range

Why it matters

To assess if the strong momentum from Q3 continued and if the conservative guidance was exceeded.

This particular quarter, we hope that we will be 25% plus growth that will continue to happen.

Risks & concerns

  • Gold Price Volatility

    medium

    Gold prices reached INR1,40,000 and currently INR1,50,000+, with 65% YoY growth. Volatility led to reduced hedging to 55-60% to manage liquidity and margins.

    Management acknowledged

  • Volume Degrowth

    medium

    Gold volume degrowth of 3% in Q3 and 10% for 9M due to high gold prices impacting consumer budgets.

    Management acknowledged

  • Balance Sheet Stretch / Inventory Increase

    low

    Inventory value increased from INR2,963 crores to INR4,602 crores. Management uses AI tools to monitor and optimize inventory, focusing on right products and recycling slow-moving stock.

    Analyst acknowledged

Q&A highlights

7 direct
Q4 FY26 Growth Guidance vs. Momentum Direct
Our guidance of 25% is little on the conservative side. Maybe as we are closer to the end of the quarter, this 25% might become 30%-35%. But we are still giving a conservative guidance of 25% to 30%.

Clarifies management's conservative stance on Q4 growth despite strong Q3 momentum, attributing it to seasonal factors like Akshay Tritiya.

Asked by Mihir Shah (Nomura)

Inventory Hedging Policy and Gold Price Volatility Direct
In the last 6 months in this high price gold volatility, there have been pressure on liquidity, there have been pressure on maintaining the margins. And in this kind of a dynamic volatile scenario, based on our prudent hedging policy and guidance, we said that let us keep it at 55% to 60%.

Explains the rationale behind reducing hedging percentage from 80-90% to 55-60% due to market volatility and liquidity pressures, and how other factors like old gold exchange and customer advances act as natural hedges.

Asked by Bharat (MC Pro Research)

Inventory Gain vs. Realization Gain Direct
It has the impact of realisation gain. So I am using 2 words. One is inventory gain and realisation gain. Realisation gain means whatever inventory has been sold at a higher price in the quarter 3, that we call realisation gain. Yes, it has impact on realisation gain.

Clarifies the accounting treatment of gold price increases, distinguishing between inventory gain (not recognized until sold) and realization gain (from selling inventory at higher prices), which contributes to the reported margins.

Asked by Vijay Chauhan (Right Horizons PMS)

Impact of Gold Price Fall on EBITDA Margins Direct
So the EBITDA shall continue to remain between 7.2% to 7.8%. This kind of price fall, if it happens, I think based on our prudent hedging policy -- today, our hedging is at 55% to 60%. And then the hedging percentage will go up to 75% to 80%.

Addresses a key investor concern about the downside risk to margins from a sudden gold price correction, with management asserting that their hedging policy and treasury management would maintain EBITDA within the guided range.

Asked by Rupesh (Long Equity Partners)

Customer Advances and Savings Schemes Direct
December quarter 3, it being a Dhanteras quarter, most of the consumers who have been doing their advances and savings, they kind of redeem it during the festive season. So that is how it looks low. But going forward, with the targets in place, with the teams in place and with the communications in place, we are putting our best efforts that we continue to raise these advances back.

Explains the seasonal dip in customer advances due to festive redemptions and outlines strategies to boost these schemes, which are crucial for future sales and cash flow.

Asked by Devanshu Bansal (Emkay Global)

Volume Growth Amidst High Gold Prices Direct
So the volume as I mentioned, the volume degrowth in quarter 3 was minus 3% like quarter-on-quarter. And for the whole 9 months, if you look at it, it is minus 10%. That is for gold. And for diamonds, if you look at just diamonds as a product, then it is up by 12.5% for the 9 months. These are all volume numbers.

Provides specific volume growth figures for gold and diamonds, highlighting the impact of high gold prices on gold volume while diamond volume shows growth, indicating a shift in consumer preference.

Asked by Sonal Minhas (Prescient Capital)

Melorra Acquisition Strategy Partial
So Melorra is one of our one of the many strategies that we have to connect with the Gen Z, millennial, young generation customers... So therefore, this will only add to the portfolio of design centric and catering to the young generation.

Gives initial strategic rationale for the Melorra acquisition, positioning it as a move to diversify into design-centric jewelry and target younger demographics, complementing Senco's traditional offerings.

Asked by Venkat (MIT)

Staff Cost Impact from New Labour Code Direct
Yes, yes. Correct, correct. Impact will not be substantial as you've seen in other companies because we have the labour code has come around 5 years, 6 years back. We have been aligning and calibrating our structure of the cost for own staff as well as third-party. We have been preparing ourselves for a long time.

Clarifies the one-time nature and limited impact of the new labour code on staff costs, assuring investors that the company had proactively prepared for these changes.

Asked by Abhijeet (Antique Stock Broking)

3 min read 8 chapters

Detailed narrative

Historic Q3 FY26 Performance Driven by Strong Demand

Senco Gold reported a historic Q3 FY26, with revenue crossing INR3,000 crores, marking a 50% YoY growth. This was supported by strong demand during Dhanteras, which saw sales of INR1,716 crores in October, and a robust wedding season. Despite gold prices rising by 65% YoY and 23% in the quarter, consumer confidence in gold and jewelry remained high.

Significant Profitability Surge and Margin Drivers

The company's EBITDA for Q3 FY26 surged 406% YoY to INR404.6 crores, with an adjusted EBITDA margin of 13.2%. PAT increased 689% YoY to INR264 crores. This margin expansion was primarily driven by a higher share of own-store sales (65%), an improved product mix favoring lightweight and diamond jewelry, and the natural increase in making charges due to higher gold prices.

Strategic Product Innovation and Hyperlocal Focus

To counter high gold prices and cater to diverse consumer budgets, Senco Gold introduced 9-carat, 14-carat, and lightweight jewelry, becoming one of the first to offer 9-carat hallmarked products. The company's hyperlocal strategy, supported by technology and data analytics, ensures product offerings are tailored to local consumer needs and budgets, with over 6,000 new gold and 3,000 new diamond designs launched in the quarter.

Efficient Inventory Management and Working Capital Optimization

Senco Gold implemented AI-based software to monitor inventory in real-time, successfully keeping inventory days range-bound between 166 and 188 days. While inventory value increased from INR2,963 crores to INR4,602 crores, it was funded by a mix of borrowing and trade payables. The company is actively analyzing slow-moving stocks for recycling and focusing on high-demand products.

Credit Rating Upgrade and Capital Structure Management

CareEdge assigned an A1 credit rating to Senco Gold, a first for the company, which is expected to reduce the blended cost of borrowing (ROI) by 30-40 basis points in the next financial year. The company's working capital limit stands at INR2,400 crores, and it is applying for an increased customer deposit limit of INR500 crores, up from the current INR200 crores.

Volume Dynamics and Consumer Behavior Shifts

Despite strong value growth, gold volume experienced a degrowth of 3% in Q3 FY26 and 10% for the nine-month period, primarily due to elevated gold prices. However, diamond volume grew by 12.5% for the nine months. Management noted a significant increase in old gold exchange (45-50% now vs. 25-30% historically), indicating consumers are utilizing existing assets to manage new purchases.

Strategic Expansion and Melorra Acquisition

Senco Gold plans to expand its store network to over 200 stores by the end of the fiscal year, with a target of opening 18-20 new stores next year, focusing on a balanced mix of own and franchisee outlets. The ongoing acquisition of Melorra is a strategic move to tap into the Gen Z and millennial market with design-centric jewelry, complementing Senco's traditional offerings and average ticket value of INR80,000-90,000.

Outlook and Industry Trends

The company provided a conservative Q4 FY26 revenue growth guidance of 25%+, potentially reaching 30-35%, and a FY27 revenue growth target of 20%+. Management reiterated a sustainable EBITDA margin of 7.5-7.8% for FY27. They also highlighted the ongoing shift from unorganized to organized retail and the increasing importance of regulation, hallmarking, and traceability in the jewelry sector.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Consumer Durables earnings calls