Senco Gold expects sales boost from hallmarking-driven exchanges

Senco Gold and Diamonds has reported 17-19% same store sales growth (SSSG) during April-December 2023 against its historical range of 10-12% annually.

Suvankar Sen, MD and CEO of the company said implementation of mandatory hallmarking is one of the key reasons for the 5-6% improvement in SSSG.

“A lot of consumers are coming with their old gold jewellery that they want to exchange and buy new jewellery which is HUID hallmarked,” said Sen.

Senco Gold and Diamonds holds the position of being the largest organized jewelry retailer in eastern India. Around 69.5% portion of its revenue comes from West Bengal, while 12.05% comes from the East and North East regions. Gold sales constitute the majority, accounting for 89.7% of total sales, while diamonds and semi-precious stones make up 6.8%.

Senco Gold revenue grew 23% in October-December 2023 to ₹1,652 crore  while profit declined 6% to ₹109 crore. The margins dropped from 12.1% to 11% during this period.

In the first nine months of fiscal year 2024, revenue grew 26% to ₹4,104 crore while profit grew to ₹149 crore. Margins fell to 7% from 7.7%.

The total number of stores for Senco Gold and Diamonds has shown a steady increase over the past few years.

In the financial year 2021, there were 112 stores, which grew to 127 in FY22 and further to 136 in FY23.

Till December 2023, the count was at 155.

Previously, the company had plans to open about 18-20 stores in a year. However it has now indicated the potential to open 15-20 stores annually.

Sen said that in Q3, diamond jewellery sales has gone up by 40% in terms of value and 27% in terms of volume. Overall, its diamond jewellery stud ratio is in the range of 11-11.5%. “Our endeavor is that over a period of time, we take it towards 15%,” he said.

Compared to last year (FY23), he expects to see a marginal high single-digit growth in terms of the margins in FY24.

The current market capitalisation of the company is ₹5,744.99 crore.