Senco Gold Limited Q4 FY26 Earnings Conference Call Summary

Key Financial Performance

Q4 FY26 Financial Highlights:

  • Revenue: ₹1,997 crores (45% YoY growth)
  • EBITDA: ₹274 crores (116% YoY growth)
  • PAT: ₹157 crores (151% YoY growth)
  • EBITDA Margin: 13.7% for Q4

FY26 Full Year Performance:

  • Revenue: ₹8,430 crores (33% YoY growth, 24% 5-year CAGR)
  • EBITDA Margin: 11.5% for full year
  • Coins & Bullion Sales: 6% of total revenue (balance entirely jewellery)
  • Stud Ratio: ~11% by value

Dividend Declaration

  • Proposed final dividend of 20%
  • Earlier interim dividend of 15% announced
  • Total dividend for FY26: 35%

Operational and Business Metrics

Sales Performance:

  • Diamond jewellery value growth: 32% YoY
  • Diamond volume growth: 9% YoY
  • Old gold exchange: ~44% of FY26 revenue, ~50% of Q4 FY26 revenue
  • Average Ticket Value (ATV): Increased ~30% YoY

Inventory Status:

  • Total inventory: ₹5,296 crores (61% YoY increase)
  • Inventory days: 186 days (increased from 166 days previous year)
  • Reasons for inventory buildup: Gold price increase, 7 new showroom launches, Poila Boishakh festival preparation, election-related logistics concerns

April 2026 Performance:

  • Akshaya Tritiya season growth: 67%
  • Primary level sales: ~₹1,500 crores
  • Regional growth: West Bengal 69%, East Bengal 78%, North Bengal 75%, Northeast 64%, Central 162%

Strategic Business Updates

Expansion Strategy:

  • Target 18-20 new store openings in FY27
  • Focus on franchise-led expansion in Tier 2, 3, and 4 towns
  • Geographic focus: 50-60% on East India (core strength), 30-40% on North and Central India
  • Recent expansions: Rajasthan (Bikaner), Western UP, Nagpur (Maharashtra)
  • FY27 pipeline skewed towards Bihar and UP

Product Innovation:

  • Over 1.5 lakh designs created during the year
  • Early adopter of 9-carat jewellery post government hallmarking approval
  • Focus on lightweight jewellery designs
  • Sennes brand (lab-grown diamonds): 12 exclusive stores, EBITDA positive in second year

Hedging and Risk Management:

  • Maintained hedging ratio of 40-50% during gold price volatility
  • International gold prices ranged from $4,400-$5,600 during Q4
  • INR gold price averaged ~₹1,51,000

Management Guidance for FY27

Financial Targets:

  • Revenue growth: 18-20%
  • EBITDA margin: 7.5-7.8% (sustainable)
  • PAT margin: 4.0-4.5%
  • ROE/ROCE target: North of 16-17% (ex-inventory gains)

Operational Targets:

  • Inventory days target: 160-180 days
  • Marketing spend: 1.8-2.2% of revenue
  • Old gold exchange target: 50-55% of revenue

Customs Duty Impact Analysis

Current Situation (6% to 15% hike):

  • Estimated inventory gain: ~9% of gold inventory value (~₹4,500 crores)
  • Gain expected to flow through Q1-Q2 FY27
  • Actual realization dependent on market competition and discounting

Risk Management:

  • Acknowledged difficulty in fully hedging customs duty risk via MCX (margins now 25-26%)
  • Previous duty reduction caused ₹57 crore impact in FY25
  • Need for cautious inventory management for potential future duty reductions

Current Market Conditions

Recent Trends (May 2026):

  • Post-PM appeal slowdown in last 7-10 days
  • Adhik Maas (inauspicious period) affecting demand
  • Heat wave impacting footfalls
  • May YTD performance broadly similar to last year

Wedding Season Outlook:

  • June-July wedding season expected to revive demand
  • Long-term optimism maintained despite near-term softness

Credit and Financing

Credit Rating:

  • Upgraded one notch by ClearEdge
  • ICRA renewal pending
  • Interest coverage ratio: 4.5%

Borrowing Costs:

  • GML borrowing cost: 3-3.5%
  • Overall borrowing costs increased in Q4 due to gold price spike and hedging position adjustments

Manufacturing and Procurement

Production Mix:

  • 70-75% through job workers/factories
  • 20% ready-made jewellery purchases
  • 4-5% own factory manufacturing (targeting 10% eventually)

Gold Procurement:

  • 50% from old gold
  • 20% from traders
  • Balance from GML and other sources

Free Cash Flow

  • Management acknowledged negative free cash flow due to inventory expansion and gold price rise
  • No specific guidance on when positive FCF might be achieved
  • Working on inventory optimization through technology-driven transfers