Senco Gold — Q4 FY25 earnings call

Call held 5 Jun 2025

Management summary

Senco Gold delivered strong Q4 and FY25 results, primarily driven by robust growth in the diamond jewellery segment and strategic store expansion. Despite challenges from rising gold prices impacting gold volume, the company maintained value growth and improved its stud ratio. Management provided optimistic guidance for FY26, focusing on continued top-line growth, margin stability, and further distribution expansion, particularly in non-East regions and through the Everlite format.

Highlights

  • Total sales grew approximately 21% in Q4 FY25.

  • Gold jewellery segment saw 20% value growth in Q4 FY25, despite a 6% volume decline.

  • Diamond jewellery segment achieved 38% value growth and 21% volume growth in Q4 FY25.

  • The stud ratio increased to 10.9% by year-end FY25, up from 10.5% at 9M FY25.

  • FY25 adjusted standalone PAT was INR 207 crore.

  • Adjusted EBITDA for FY25 (standalone) improved 12.2% to INR 427 crore.

  • 16 new stores were opened in FY25, including 6 franchise and 9 company-owned stores.

  • Non-East business grew 23% to approximately INR 1,230 crore in FY25.

  • Q1 FY26 (first two months) has seen an 18% to 19% growth in terms of value.

Concerns

  • Gold price volatility impacting volumes

Key financials

3 periods

Headline

  • Total Sales Growth
    21%

Q4

  • Gold Jewellery Value Growth
    20%
  • Gold Jewellery Volume Growth
    -6%
  • Diamond Jewellery Value Growth
    38%
  • Diamond Jewellery Volume Growth
    21%
  • EBITDA Margin
    9.2%

FY25

  • Standalone Revenue
    ₹6,258 Cr
  • Consolidated Revenue
    ₹6,328 Cr
  • Adjusted Standalone PAT
    ₹207 Cr
  • Adjusted Consolidated PAT
    ₹201 Cr
  • Adjusted Standalone EBITDA
    ₹427 Cr
    YoY +12.2%
  • Adjusted PAT Margin
    3.3%

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

  • Non-East Business
    ₹1,150 Cr Revenue (FY25)18% Contribution to Total Revenue (FY25)23% Growth (FY25)
  • Stud Ratio
    10.9% Overall Stud Ratio (FY25 end)14% Own-Store Stud Ratio12.2% Franchisee Stud Ratio (National Average)15.3% Franchisee Stud Ratio (Delhi NCR)8.5% Franchisee Stud Ratio (West Bengal/East/Northeast)17% Franchisee Stud Ratio (Central Region)

Guidance & targets

Profitability

  • EBITDA Margin Profitability · Ongoing · High confidence 6.8% to 7.2%
    I think we will be working towards having and achieving an EBITDA of anywhere between 6.8% to 7.2%

    — Mr. Suvankar Sen

  • PAT Margin Profitability · Ongoing · High confidence 3.5% to 3.7%
    our endeavour to achieve a PAT of 3.5% to 3.7% shall continue to remain.

    — Mr. Suvankar Sen

  • Return on Equity (ROE) Profitability · next 3 to 4 years · Medium confidence 17% to 18%
    In 3 to 4 years, it will inch back to 17% to 18%.

    — Mr. Sanjay Banka

Revenue

  • Top Line Growth Revenue · FY26 · High confidence 18% to 20%
    Our aim for the whole financial year, again, to reiterate as we are having the call and we've crossed 2 months of the year, we'll continue to be having a top line growth of 18% to 20%

    — Mr. Suvankar Sen

Distribution

  • Franchisee Stores Added Distribution · FY26 · High confidence minimum 10
    So minimum 10 franchisees we will be adding

    — Mr. Suvankar Sen

  • Company-Owned Stores Added Distribution · FY26 · High confidence 8 to 10
    and about 8 to 10 company-owned company-operated stores with a strong focus

    — Mr. Suvankar Sen

  • Everlite Stores Added Distribution · FY26 · Medium confidence 3 to 4
    You can look at 3 to 4 more Everlite stores out of 20.

    — Mr. Sanjay Banka

Sales Mix

  • Stud Ratio Sales Mix · 3 to 4 years · Medium confidence 15%
    the stud ratio, which we have been looking for a 15% range in 3 to 4 years, we'll achieve that.

    — Mr. Sanjay Banka

Debt

  • Debt-to-Equity Ratio Debt · Ongoing · High confidence 1:1 to 1.2
    Based on our projected PAT, a debt-to-equity ratio in the range of 1:1 to 1.2 is considered comfortable.

    — Mr. Sanjay Banka

  • Incremental Borrowing Debt · FY26 · Medium confidence INR 350 crore
    I think maximum INR 350 crore incremental borrowing is what you can look for.

    — Mr. Sanjay Banka

Capital Expenditure

  • Additional Working Capital Capital Expenditure · Ongoing · High confidence INR 300 to INR 400 crore
    We are currently looking at an additional working capital requirement of approximately INR 300 to INR 400 crore.

    — Mr. Sanjay Banka

Volume

  • Diamond Volume Growth Volume · Ongoing · High confidence 15% to 20%
    So on a safe level, a maximum 15% to 20% diamond growth we can look at, which will purely be driven by the volume.

    — Mr. Sanjay Banka

Risks & concerns

  • Gold price volatility impacting volumes

    high

    The weight ranges have been under pressure because prices went up upwards of 30%, leading to a shift towards lighter-weight and diamond jewellery.

    Management acknowledged

  • Increased Gold Metal Loan interest rates

    medium

    Gold Metal Loan rates increased from 3.6% to 6.6% (blended 5.9% to 7%) due to short supply, though management expects rates to come down.

    Management acknowledged

  • Balance sheet stress from store expansion and gold price increase

    medium

    The value of inventory assets has gone up, but the company is optimizing quantities and focusing on the franchisee model to manage balance sheet impact.

    Analyst acknowledged

  • Uncertainty and potential investment in Melorra

    low

    Management is doing due diligence on the Melorra partnership and stated it's too early to forecast financial impact or future investment decisions.

    Analyst deflected

Areas of evasion (1)

  • Specifics on potential capital investment or financial impact of the Melorra partnership.

Q&A highlights

2 direct
Increase in inventory days and timeline for ROCE recovery Partial
So, inventory days, we have said earlier that we are a growing company. The number of stores is increasing. Particularly, if you look at the competitor, I understand the inventory days are in the range of 170 to 180. This is still 166, right? It has increased from 151... In 3 to 4 years, it will inch back to 17% to 18%.

Addresses capital efficiency and future profitability targets, crucial for growth-oriented investors.

Asked by Videesha Sheth

Gold Metal Loan interest rate spike and current rates Direct
So, Vishal, the ongoing rate was higher because there was a very short supply of gold in the market. It increased from 3.2% in Jan to 5.3% in February and 6.6% in March. In April, it came down by 100 basis points. May we are still talking. ... So the blended interest cost is higher even today at 7% as against 5.9% earlier.

Directly impacts finance costs and overall profitability, especially given the company's reliance on gold metal loans.

Asked by Vishal Gutka

Growth capital strategy (debt vs. equity) and comfortable debt-to-equity ratio Direct
from a strategic point of view, obviously, we are aware that opening more and more franchisees is a much wiser thing to do and the correct thing to do in this kind of a scenario... we won't raise any funds by way of equity to meet any demand and pressure for growth. It will be managed from internal accruals and debt-equity ratio and continuous inventory efficiency improvement is the core mantra.

Clarifies the company's approach to funding expansion and managing its balance sheet in a high-growth phase.

Asked by Devanshu Bansal

2 min read 6 chapters

Detailed narrative

Strong Q4 & FY25 Performance Driven by Diamond Growth

Senco Gold reported a robust Q4 FY25 with total sales growing approximately 21% year-on-year. Gold jewellery value increased by 20%, although volume saw a 6% decline due to rising gold prices. Diamond jewellery was a significant growth driver, achieving 38% value growth and 21% volume growth in Q4 FY25. For the full FY25, standalone adjusted PAT stood at INR 207 crore, with adjusted EBITDA improving 12.2% to INR 427 crore.

Improving Stud Ratio and Non-East Market Penetration

The company successfully increased its stud ratio to 10.9% by the end of FY25, up from 10.5% at the 9-month mark, driven by new designs and collections. The non-East business demonstrated strong momentum, growing 23% to approximately INR 1,230 crore and now contributing 18% of total revenue. This expansion is supported by 16 new store openings in FY25, including 6 franchise and 9 company-owned stores, with a focus on Tier 2, 3, and 4 towns.

Strategic Focus on Lightweight and Diamond Jewellery

In response to high gold prices (upwards of 30% YoY), management is observing a consumer shift towards lighter-weight, 14-carat, and 18-carat diamond jewellery. The company introduced new collections like Berry, Ice Cube, Ombre, and Rose, and saw a 26% growth in solitaires above 0.20 carats in FY25. This strategy aims to fit jewellery within consumer budgets and maintain demand, with diamond volume growth targeted at 15-20%.

Inventory Management and Capital Efficiency

Inventory days increased from 151 to 166, attributed to growth and readiness for seasonal demand like Akshaya Tritiya. The company aims for a comfortable debt-to-equity ratio of 1:1 to 1.2 and anticipates an additional working capital requirement of INR 300-400 crore, with maximum incremental borrowing of INR 350 crore for FY26. Management emphasized managing growth through internal accruals and continuous inventory efficiency, with old gold exchanges now contributing 39-40% of overall sales.

Profitability and Growth Outlook

Senco Gold maintains a positive outlook, targeting a top-line growth of 18% to 20% for FY26, with Q1 FY26 already showing 18-19% value growth. They aim to achieve an EBITDA margin of 6.8% to 7.2% and a PAT margin of 3.5% to 3.7%. The company also projects a return on equity (ROE) of 17% to 18% within the next 3 to 4 years, reflecting confidence in their long-term growth strategy and ability to navigate dynamic market scenarios.

Melorra Partnership and Future Initiatives

The company has entered a master franchisee agreement with Melorra, viewing it as a strategic initiative to connect with new-generation customers and boost diamond jewellery sales, particularly lightweight, everyday wear items. While specific financial details and future investment plans for Melorra were not disclosed, management indicated ongoing due diligence and a future decision. The Everlite store format, focusing on INR 20,000-50,000 price range and 50-60% diamond-studded jewellery, will see 3-4 more additions in FY26.

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