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Senco Gold’s EBITDA margin dropped significantly to 3.8% in Q3, a sharp decline from the 11% reported in the same period last year; What investors should know
Senco Gold Shares
Senco Gold shares plunged 18% in early trade on February 14, weighed down by the significant margin decline reported by the company in Q3.
Senco Gold’s EBITDA margin dropped significantly to 3.8% in Q3, a sharp decline from the 11% reported in the same period last year, due to higher costs associated with launching new subsidiaries.
The management attributed the margin contraction primarily to the impact of customs duties over the past two quarters and overall gold price volatility. The company had previously projected EBITDA margins in the range of 7-8%.
The weaker operational performance also affected Senco Gold’s bottom line, with net profit falling to Rs 33.5 crore, down from Rs 101.3 crore in the same quarter last year.
However, the company’s revenue remained robust, reaching a record high of Rs 2,100 crore, a 27% year-on-year increase.
Despite high gold price volatility in Q3, which surged 22% on a yearly basis and 20% since April 2024, consumer demand stayed strong. The reduction in customs duties during Q2 supported Q3 sales, especially during Dhanteras and Diwali, the management noted.
“This quarter was a milestone for us, achieving our highest-ever Q3 revenue of Rs 2,100 crore and a record single-month revenue of Rs 1,000 crore during Dhanteras, reflecting a solid 22% growth year-on-year,” said Suvankar Sen, Managing Director & CEO of Senco Gold, in an exchange filing.
Looking ahead, Sanjay Banka, CFO of Senco Gold, expressed confidence in achieving a 7-8% EBITDA margin on an annualized basis, excluding any one-time events, driven by the long-term growth potential of India’s gems and jewelry industry.
“We aim to reach a 7-8% EBITDA margin in Q4 and beyond, supported by our strong brand positioning and operating leverage. We also plan to boost sales through innovative offerings and premium pricing,” Banka added.
