Senco Gold’s stock fell 18% in the first trading session on February 14 due to the company’s announced Q3 margin decrease.
Senco Gold Shares Crashed 20% After Q3 Results:
Senco Gold’s Q3 margins were significantly impacted by increased expenses for establishing new subsidiaries, fluctuations in the price of gold, and increased customs charges.
Senco Gold’s stock fell 18% in the first trading session on February 14 due to the company’s announced Q3 margin decrease.
Senco Gold’s EBITDA margin fell to 3.8 percent in Q3, a dramatic drop from the 11 percent it recorded in the same period last year due to increased expenses related to establishing new subsidiaries.
The management claims that the impact of customs duties during the previous two quarters and the general volatility of the gold price are the leading causes of the margin discrepancy compared to the same quarter last fiscal year. The business has previously said that its EBITDA margins should be between 7 and 8 percent.
Senco Gold’s bottom line was also negatively impacted by the slow operational performance; net profit fell to Rs 33.5 crore from Rs 101.3 crore in the same quarter of the previous year. Senco Gold shares were trading at Rs 369.30 on the NSE at 09.28 am.
However, the company’s top line remained solid, with sales reaching a new high of Rs 2,100 crore, up 27% year over year.
In Q3, gold prices fluctuated significantly, rising 22% year over year and 20% since April 2024. The management said that despite this, customer demand was still high and that the Q2 customs duty cut helped Q3 sales, especially during Dhanteras and Diwali.
“We reached our highest-ever Q3 revenue of Rs 2,000 crore and a record single-month revenue of Rs 1,000 crore during the Dhanteras month, reflecting a solid 22 percent on-year growth,” stated Suvankar Sen, Managing Director & CEO of Senco Gold, in an exchange filing. “This quarter was a milestone for us.”
Senco Gold’s CFO, Sanjay Banka, stated that he is confident the company would achieve an annualized EBITDA margin of 7-8 percent, excluding one-time events, due to the long-term development potential of the Indian gem and jewelry business.
“With the help of our excellent brand positioning and operating leverage, we should reach an EBITDA margin of 7-8 percent in Q4 and beyond. Furthermore, we want to increase sales further by providing premium pricing and creative products,” Banka continued.
