SENCO GOLD LIMITED

In Senco Gold Limited's Q2 and H1 FY25 earnings call, the company reported significant financial highlights. For Q2, Senco Gold achieved a revenue of INR 2,904 crore, reflecting an impressive growth rate of 18.5% year-on-year. The profit for the quarter stood at INR 63.4 crore, marking a substantial increase of 60% compared to the previous year. Key metrics included a remarkable 27% retail growth and a 30% increase in gold value, while diamond value grew by 9%. Additionally, gold volume saw a growth of 7%, despite a slight decline of 3% in diamond volume. For the first half (H1) of FY25, the company reported

The reduction in custom duty on gold had a significant positive impact on Senco Gold Limited's sales performance in Q2 FY25. Following the government's decision to lower the custom duty by 9-10%, Senco Gold experienced a notable increase in sales, achieving a 27% growth in retail. The value of gold sales surged by 30%, while gold volumes also grew by 7%. This duty cut not only stimulated consumer demand but also contributed to an overall higher top line compared to Q1, which is typically slower. The favorable pricing environment encouraged consumers to purchase gold, particularly during the festive season, leading to record sales figures for the company.

During the festive season of FY25, consumer behavior regarding gold and diamond purchases shifted significantly. With gold prices trending upwards, consumers increasingly favored gold over diamonds, driven by a strong demand for gold for weddings and self-investment. This preference was reflected in Senco Gold's performance, where gold value sales surged by 30% and retail growth reached 27% in Q2. In contrast, diamond volumes declined by 3%, indicating a clear shift in consumer priorities. Additionally, the increase in old gold exchanges by 34% suggests that consumers were motivated to utilize their existing gold assets amid rising prices, further emphasizing the growing inclination towards gold purchases during this festive period.

Senco Gold Limited has implemented several strategic initiatives to boost diamond sales and attract younger consumers. Notably, the company launched new collections, including a wedding collection and a dedicated line for men's jewelry, which is aimed at engaging the younger demographic. To enhance this focus, Senco appointed Kartik Aaryan as the brand ambassador for men's jewelry, leveraging his popularity to resonate with younger audiences. Additionally, Senco is expanding its product offerings under the Sennes brand, which includes lab-grown diamond jewelry and leather accessories. This diversification not only appeals to modern consumers but also aligns with current trends favoring sustainable options. The company is also enhancing its marketing campaigns to promote these new designs and collections, aiming to increase diamond sales through innovative strategies that cater to evolving

Senco Gold Limited projects an approximate 18% year-on-year growth in top-line revenue following their record sales of over INR 1,000 crore in October 2024. This optimistic outlook is supported by strong retail performance, with a 27% growth in Q2 and a strategic focus on expanding their diamond sales through innovative designs and marketing campaigns. Additionally, the company aims to enhance customer engagement and expand its franchisee network, positioning itself for sustained growth despite challenges such as gold price volatility and custom duty impacts.

During the first half of FY25, Senco Gold Limited observed notable growth trends in gold and diamond sales. Gold value grew by 22% year-on-year, with a retail growth of 27% in Q2 alone. Additionally, gold volumes increased by 1% overall for H1, while diamond value saw a modest growth of 3%. However, diamond volumes experienced a decline of 8% in H1 and a 3% drop in Q2. The shift in consumer preference towards gold over diamonds was evident, driven by rising gold prices and a strong demand for gold purchases during the festive season.