Purchase Senco Gold, goal worth Rs 1,400: Emkay International Monetary Companies

Senco Gold Ltd., integrated within the yr 1994, is a Small Cap firm (having a market cap of Rs 8639.15 Crore) working in Gems and Jewelry sector.

Senco Gold Ltd. key Merchandise/Income Segments embrace for the yr ending .

Funding Rationale

Senco reported an enormous beat to our Q1 EBITDA/PAT estimates led by higher gross margin (up by ~500bps YoY). The sudden spike in gold worth and working challenges led to a modest retail income development of 11% in Q1, consistent with muted traits seen in TTAN. Nonetheless, an enormous 900bps obligation lower on gold and return of working normalcy has pushed a robust restoration with FY25TD retail development climbing to ~20%.

Senco has retained its FY25 development outlook of 18-20%. The EBITDA margin beat of ~250bps was led by higher franchisee phrases, decrease discounting/higher gold premium, and a low-margin base as hedging remained at ~95% in Q1. Whereas the obligation lower considerably improves medium-term prospects, Senco expects a short-term hedging lack of Rs0.5bn, which shall be distributed over the following 2-3 quarters.

Margin beat drives a ~12% upward revision to our earnings estimates. Senco is buying and selling at appreciable low cost to friends regardless of comparable or higher working efficiency. We improve our TP a number of by 5% and revise TP as much as Rs1,400/sh (based mostly on 32x Sep-25E EPS). Financials For the quarter ended 30-06-2024, the corporate has reported a Consolidated Whole Earnings of Rs 1416.18 Crore, up 23.13 % from final quarter Whole Earnings of Rs 1150.12 Crore and up 7.71 % from final yr identical quarter Whole Earnings of Rs 1314.85 Crore. Firm has reported web revenue after tax of Rs 51.27 Crore in newest quarter.

Promoter/FII Holdings Promoters held 68.45 per cent stake within the firm as of 30-Jun-2024, whereas FIIs owned 7.72 per cent, DIIs 10.46 per cent.