Senco Gold Ltd, a prominent jewellery chain, expects a 15-20% growth in revenue and profit in the current fiscal year, despite the escalating prices of gold and global uncertainties.
The jeweller also plans to open 15-20 new stores during the current 2024-25 financial year (FY’25), with approximately half being owned by franchisees.
“We anticipate a conservative growth of 15%, which could potentially reach 20% under normal circumstances, in both revenue and profit for FY’25,” stated Suvankar Sen, MD & CEO of Senco Gold.
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The jewellery chain saw a remarkable 39% year-on-year increase in revenue during the fourth quarter of FY’24 (2023-24), reaching INR 1,137 crore, with its profit also surging by 23% to INR 32.17 crore.
Throughout the fiscal year, revenue surged by 29%, totaling INR 5,241 crore, driven by escalating gold prices and heightened demand from both existing and new stores. Net profit also grew by 14%, reaching INR 181 crore.
Store Expansion Strategy
During the fiscal year 2023-24, the retail jewellery chain inaugurated 23 new outlets, increasing its total count to 159.
“We intend to incorporate an additional 15-20 stores in the ongoing fiscal year. These establishments will be evenly split between company-owned and franchise-based models. We’ve allocated significant funds, totaling more than INR 38.23 crore, towards new store capex and capacity enhancement, as part of our nationwide strategy,” he stated.
Sen also highlighted the retail jewellery chain’s expansion into new markets in the western and southern regions of the country, emphasizing that the majority, around 70-80%, of its growth would still originate from the eastern and northern parts of India.
The company plans to further strengthen its brand presence in these new markets.
Sen stated that Senco will capitalize on its brand and customer loyalty, although margins will face pressure due to the significant increase in gold prices.
He mentioned that the company must bear additional expenses to implement customer-centric schemes such as shielding customers from gold price fluctuations, aiming to attract more foot traffic into stores.
In FY’24, its EBITDA (earnings before interest, taxes, depreciation, and amortization) margin decreased by 60 basis points year-on-year to 7.2%.
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