Senco Gold shares fall 14% on EBITDA margin collapse despite 67% revenue jump
Senco Gold shares tumbled over 14% after first-quarter results revealed a sharp contraction in profitability, as heavy discounts used to offset elevated gold prices and a customs duty hike eroded margins.
Senco Gold shares plunged more than 14% to a four-week low after the Indian jeweller reported a 3% decline in first-quarter net profit, overshadowing a 67% surge in revenue.
The company posted revenue of ₹3,056 crore for the quarter, driven by 39% same-store sales growth. However, operating profitability buckled under the weight of aggressive promotional campaigns deployed to counter a tough macroeconomic environment.
A sharp increase in average gold prices and a hike in customs duty from 6% to 15% pressured consumer demand. To sustain sales, Senco leaned heavily on a "0% deduction" old-gold exchange scheme, which accounted for 43% of total sales quantity. "This partly impacted the gross margin," the company stated in its filing.
The strategy took a toll on the bottom line. EBITDA rose 16% year-on-year to ₹213 crore, but the EBITDA margin contracted 310 basis points to 7%. Net profit fell to ₹101 crore, yielding a PAT margin of just 3.3%.
There were pockets of strength elsewhere. Diamond jewellery sales grew 43% year-on-year, with an 18% increase in volumes driven by demand for pieces priced under ₹50,000 in the Everlite collection. Overall retail sales reached ₹2,651.5 crore.
Management cautioned that the September quarter will remain soft but anticipates a demand recovery in the subsequent period tied to the monsoon and festive seasons. "We remain focused on achieving 20%+ value growth in FY27 while strengthening Brand Senco across the country and pursuing disciplined, profitable pan-India expansion with a focus on East and North India," said Suvankar Sen, managing director & CEO.
The CFO outlined specific margin targets to reassure investors. “We remain committed to FY27 value growth of 20%+ and an EBITDA margin of 7.5%-7.8% while working towards a sustainable PAT margin of 4.0%-4.5%, with a sharp focus on Return on Capital Employed (RoCE),” said Sanjay Banka, Group CFO & Head of Investor Relations.
Despite staging a 45% cumulative recovery between April and July after a prolonged selloff, the stock remains 40.5% below its record high of ₹772. The shares are up 9% so far this calendar year, having lost 41% in 2025.
