Why Senco Gold shares slumped nearly 15% despite strong Q1 revenue growth
Motilal Oswal Financial Services Ltd (MOFSL) said Senco reported consolidated revenue of Rs 3,100 crore in Q1 FY27, marking a 67 per cent YoY increase and exceeding the brokerage's estimate of Rs 2,900 crore.
- Aug 12, 2026,
- Updated Aug 12, 2026 3:18 PM IST
Shares of Senco Gold Ltd witnessed a sharp decline during Wednesday's afternoon trading session, sliding 14.64 per cent to hit a low of Rs 342.45 on BSE, even as the Kolkata-based jewellery retailer reported strong year-on-year (YoY) revenue growth in the June quarter.
Motilal Oswal Financial Services Ltd (MOFSL) said Senco reported consolidated revenue of Rs 3,100 crore in Q1 FY27, marking a 67 per cent YoY increase and exceeding the brokerage's estimate of Rs 2,900 crore.
The brokerage attributed the strong revenue performance to a favourable festive calendar, including Akshaya Tritiya and Poila Baisakh, along with the onset of the summer wedding season.
Same-store sales growth (SSSG) stood at 38 per cent YoY, compared with 33 per cent for Titan, 28 per cent for Kalyan and 46 per cent for PN Gadgil, MOFSL said.
Why did Senco Gold shares fall?
Despite the strong topline growth, the company's margins came under pressure in Q1 FY27. "Senco in its pre-quarter business update indicated that gold prices remained elevated YoY but declined QoQ, while the customs-duty increase resulted in ~9 per cent higher domestic gold prices. The benefit from higher gold prices is expected to accrue over Q1-Q2, supported by the company's ~50 per cent hedging position. However, the decline in gold prices and heavy discounting during Q1 are likely to limit the benefit and weigh on margins in Q1. As inventory is liquidated and hedges unwind, Senco expects the benefit to be more visible in Q2," MOFSL stated.
"Consolidated gross margin contracted sharply by 300bps YoY to 16.1 per cent (vs. est. 16 per cent; 22.4 per cent in Q4 FY26). We do note that quarterly margins remain volatile. Employee expenses rose 22 per cent YoY, while other expenses grew 86 per cent YoY. EBITDA margin contracted 300bps YoY and 680bps QoQ to 7 per cent (est. 8.7 per cent, 13.7 per cent in Q4 FY26) due to the sharp fall in gross margins," it also said.
"EBITDA grew 16 per cent YoY to Rs 210 crore (est. Rs 250 crore). APAT declined 3 per cent YoY to Rs 100 crore (est. Rs 140 crore, Q4 FY26 Rs 160 crore)," MOFSL further stated.
MOFSL maintained its 'Neutral' rating on Senco Gold with a 12-month target price of Rs 430.
Separately, Ravi Singh, Chief Research Officer at Master Capital Services, also noted that the company's profit declined despite the strong topline growth.
"The Q1 numbers indicate that margin pressure is currently offsetting the benefit of higher sales. Investors should therefore wait for better clarity on profitability before adding aggressively. The stock may retest its support around Rs 320, which could offer a more attractive entry point if the support holds," Singh added.
Shares of Senco Gold Ltd witnessed a sharp decline during Wednesday's afternoon trading session, sliding 14.64 per cent to hit a low of Rs 342.45 on BSE, even as the Kolkata-based jewellery retailer reported strong year-on-year (YoY) revenue growth in the June quarter.
Motilal Oswal Financial Services Ltd (MOFSL) said Senco reported consolidated revenue of Rs 3,100 crore in Q1 FY27, marking a 67 per cent YoY increase and exceeding the brokerage's estimate of Rs 2,900 crore.
The brokerage attributed the strong revenue performance to a favourable festive calendar, including Akshaya Tritiya and Poila Baisakh, along with the onset of the summer wedding season.
Same-store sales growth (SSSG) stood at 38 per cent YoY, compared with 33 per cent for Titan, 28 per cent for Kalyan and 46 per cent for PN Gadgil, MOFSL said.
Why did Senco Gold shares fall?
Despite the strong topline growth, the company's margins came under pressure in Q1 FY27. "Senco in its pre-quarter business update indicated that gold prices remained elevated YoY but declined QoQ, while the customs-duty increase resulted in ~9 per cent higher domestic gold prices. The benefit from higher gold prices is expected to accrue over Q1-Q2, supported by the company's ~50 per cent hedging position. However, the decline in gold prices and heavy discounting during Q1 are likely to limit the benefit and weigh on margins in Q1. As inventory is liquidated and hedges unwind, Senco expects the benefit to be more visible in Q2," MOFSL stated.
"Consolidated gross margin contracted sharply by 300bps YoY to 16.1 per cent (vs. est. 16 per cent; 22.4 per cent in Q4 FY26). We do note that quarterly margins remain volatile. Employee expenses rose 22 per cent YoY, while other expenses grew 86 per cent YoY. EBITDA margin contracted 300bps YoY and 680bps QoQ to 7 per cent (est. 8.7 per cent, 13.7 per cent in Q4 FY26) due to the sharp fall in gross margins," it also said.
"EBITDA grew 16 per cent YoY to Rs 210 crore (est. Rs 250 crore). APAT declined 3 per cent YoY to Rs 100 crore (est. Rs 140 crore, Q4 FY26 Rs 160 crore)," MOFSL further stated.
MOFSL maintained its 'Neutral' rating on Senco Gold with a 12-month target price of Rs 430.
Separately, Ravi Singh, Chief Research Officer at Master Capital Services, also noted that the company's profit declined despite the strong topline growth.
"The Q1 numbers indicate that margin pressure is currently offsetting the benefit of higher sales. Investors should therefore wait for better clarity on profitability before adding aggressively. The stock may retest its support around Rs 320, which could offer a more attractive entry point if the support holds," Singh added.