Driven by a fall in gold prices and higher customer engagement, listed jewellery company Senco Gold & Diamonds has witnessed an increase of 36 percent in its net profit to Rs 11.9 crore in the second quarter of FY24 as compared to Q2 of FY23. The revenues from operations grew by 26 per cent to Rs 1,147 crore in the Q2 of FY24 as compared to FY23.
Suvankar Sen, managing director & CEO of the company said “The recently concluded quarter has been yet another positive one for us at Senco Gold & Diamonds, achieving continued robust momentum in both footfalls and revenue across all markets. Gold prices in Q1 were volatile versus Q4 and almost 15% higher YoY. This price volatility continued in Q2 as well, with a sudden fall in Aug-23 and again increasing trend by the quarter end with YoY price higher by 13% leading to above growth. We again achieved volume growth consistently in Q2, leading to H1 level YoY volume growth of 11% in gold and 33% in diamond.”
He added “We have continued to expand our showroom presence pan India and have rolled out 2 own and 1 franchisee stores in Q2 achieving 145 mark ending September 30, 2023. On revenue as well, we have been consistently growing with 19% CAGR since FY 2020; and continuing our growth track record, in Q2 also we achieved topline growth of 26% YoY leading to overall 28% YoY growth in H1 and the Same Store Sales Growth (SSSG) of 19%. The Q2 revenue was the highest ever at Rs 1,158 Cr and the growth had a secular trend across all zones and channels. The tailwind for the growth came from higher footfall based on enhanced customer engagement, higher wedding sales, the relaunch of the Rajwada wedding collection, new collection launches (Mariposa, Spectra, and Tria), and a higher old gold exchange of 35%. We have also achieved consistent improvement in stud ratio (Diamond Jewellery as a percentage of total turnover) attaining a 13.7% mark in our own showroom (showing improvement of 250 basis points over 11.2% last year H1), while the blended stud ratio rose to 11.4% as against 9.8% H1, last year.” The company has declared an interim dividend of 10% for its shareholders.
Elaborating on the financial performance, Sanjay Banka, the chief financial officer of the company said “Our financial performance underscores financial resilience and our strategy of sustainable profitable growth. The revenue for the quarter increased by 26% YoY to Rs 1158 cr and at H1 level YoY by 28% amounting to Rs 2473 cr. The gross margin % has remained muted in Q2 based on Product mix, Channel Mix, offers and schemes and higher old gold exchange in line with Q1 and H1 last year. At EBITDA level, we achieved 21% growth to Rs 39 cr and H1 level YoY growth of 21.7% to Rs 107cr. The EBITDA margin for the quarter was range-bound at 3.4% and at H1 level of 4.4%. The profit after tax for the quarter also demonstrated growth and improved to Rs 11.9 cr with 36% YoY growth and at H1 level 26% YoY growth. The funds raised from the IPO have been fully deployed for working capital purposes leading to an improvement in Inventory level from Rs 1,885 crore to Rs 2,060 crore as on quarter end. Our inventory turnover also improved to 2.4x in H1 indicating the efficient working capital management.”
