Senco Q1 net up 85pc to Rs 51cr, customs duty cut to impact inventory valuation

KOLKATA: Senco Gold Ltd reported a net profit of Rs 51.27 crore for the first quarter of the current fiscal (April-June 2024), marking an 85.4 per cent increase on the back of higher revenue.

The Kolkata-based gold and diamond jewellery chain saw a 7.5 per cent year-on-year growth in consolidated revenue, reaching Rs 1,403.89 crore for the quarter ended June 30.

The company's EBITDA surged by 61.8 per cent to Rs 108.74 crore during the quarter, the company informed bourses.

The jewellery retailer expanded its footprint by opening six new showrooms, bringing its total count to 165, including one in Dubai. Retail sales grew 9.6 per cent year-on-year, while same-store sales growth stood at 4 per cent.

Senco Gold MD and CEO Suvankar Sen said, “To enhance domestic value addition in gold and precious metal jewellery, the government of India has reduced customs duties on gold and silver to 6 per cent, and on platinum to 6.4 per cent from the earlier 15 per cent."

He said, "This reduction is expected to galvanize future demand, especially the pent-up demand from Q1. With lower gold prices, jewellery companies anticipate more footfalls and increased market share for organized players.”

Senco Gold has set a growth target of 18-20 per cent for the current fiscal year.

Company CFO Sanjay Banka added that the customs duty reduction from 15 per cent to 6 per cent will impact inventory valuation and affect the gross margin and EBITDA over the next two to three quarters.

“We are working on action plans to mitigate this impact to achieve the targeted EBITDA and PAT with commensurate growth over last year,” he said.