Buy Senco Gold; target of Rs 1350: Motilal Oswal

BUY

Motilal Oswal's research report on Senco Gold

SENCO’s consolidated revenue grew 8% YoY to INR14,039m (est. INR15,469m) in 1QFY25. SSSG decelerated to 4% (vs. 23% in 4QFY24, 19% in FY24), impacted by heatwaves, general elections, fewer wedding days and gold inflation. The management noted that demand has bounced back after the reduction in customs duty. Demand for both wedding and non-wedding jewelry saw a spike. The share of studded jewelry was lower at 10% compared to 11% in 1QFY24. Studded revenue declined ~3% YoY.

Outlook

We estimate a CAGR of 18%/22%/27% in revenue/EBITDA/adj. PAT over FY24-26. The stock is currently trading at 30x FY26E EPS, with RoE/RoIC of 17%/13% in FY26E. We reiterate our BUY rating with a TP of INR1,350 (based on 35x Jun’26 P/E).

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Senco Gold_20082024_Motilal Oswal