Senco Gold Ltd shares were trading 1 per cent higher in Friday's trade, as they took their one-month rise to 14 per cent against a 2 per cent fall in the BSE500 during the same period. Senco Gold has retained its FY25 growth outlook of 18-20 per cent. A couple of brokerage maintained their 'Buy' ratings on the stock and suggested 20-23 per cent potential upside following the jeweller's better-than-expected Q1 results.
Senco Gold remains one of the most promising players in the organised retail jewellery market, MOFSL said adding that the jeweller has a pan-India presence with a strong network in the east region.
This brokerage estimated growth 18 per cent in revenue, 22 per cent in Ebitda and 27 per cent in adjusted profit for Senco Gold over FY24-26. The stock is currently trading at 30 times FY26 EPS, with estimated return on equity (RoE) of 17 per cent and return on invested capital (RoIC) of 13 per cent in FY26. "We reiterate our Buy rating with a target price of Rs 1,350 based on 35 times Jun’26 PE," MOFSL said.
On Friday, shares of Senco Gold were trading at Rs 1,113.20 on BSE, up 1.22 per cent. The scrip is up 180 per cent in the past one year.
Emkay Global said Senco Gold's Q1 Ebitda and profit beat its estimates led by better gross margin. The sudden spike in gold price and operating challenges led to a modest retail revenue growth of 11 per cent in Q1, in line with muted trends seen in Titan Company Ltd.
A big 900 basis points duty cut on gold and return of operating normalcy has driven a strong recovery with FY25TD retail growth climbing to 20 per cent, Emkay said.
"The Ebitda margin beat of 250 bps was led by better franchisee terms, lower discounting/better gold premium, and a low-margin base as hedging remained at 95 per cent in Q1. While the duty cut significantly improves medium-term prospects, Senco expects a short-term hedging loss of Rs 50 crore, which shall be distributed over the next 2-3 quarters," it said.
Senco Gold operated a total of 165 stores across India, with 97 company-owned stores and 68 franchise stores as of June 30. It held 4 per cent market share in the eastern region, predominately in West Bengal, where 75 per cent of its eastern region stores are located.
Emkay said Senco's Q1 margin beat drove a 12 per cent upward revision to its earnings estimates.
"Senco is trading at considerable discount to peers despite similar or better operating performance. We increase our targte price multiple by 5 per cent and revise target price up to Rs 1,400 per share (based on 32 times Sep-25E EPS)," it said.