Senco Gold shares jump nearly 7% after Q1 business update; how strong is this upmove?

Shares of Senco Gold Ltd jumped in Monday's early trade after the jewellery retailer reported robust business growth for the June quarter (Q1 FY27).

The stock surged 6.63 per cent to hit a day high of Rs 348.10. It later gave up some gains and was last seen trading 3.91 per cent higher at Rs 339.20. At this level, the counter is still down 6.81 per cent over the past one year.

Today's upmove came after the Kolkata-based jewellery company announced its Q1 FY27 business update, stating that it delivered "another quarter of robust growth" across the business, building on the momentum established in FY26.

According to the update, total revenue grew 60 per cent year-on-year (YoY), supported by strong consumer demand across key categories. Retail revenue increased 48 per cent YoY, while same-store sales growth (SSSG) stood at 38 per cent.

The company's trailing twelve-month (TTM) sales also approached Rs 9,660 crore.

Diamond jewellery continued to be a key growth driver during the quarter. The segment recorded 40 per cent YoY growth in value, while diamond volumes surged 56 per cent sequentially. The company attributed the performance to higher volumes, an improved product mix, affordable collections priced below Rs 50,000 under the Everlite range and new product launches.

Senco Gold said domestic gold prices remained significantly higher on a YoY basis, although they softened sequentially amid evolving geopolitical developments. Gold prices also reflected the impact of the increase in customs duty to 15 per cent from 6 per cent.

While the higher customs duty is expected to support revenues during Q1 and Q2, the company said aggressive gold price discounting during the quarter and its 50 per cent hedging position are likely to put pressure on Q1 margins, delaying the full benefit of the duty increase.

Sharing its outlook, the company said, "Q2 FY27 is expected to be seasonally softer, while consumer demand will be driven by monsoon and festivals like gold booking for Q3. Our focus will remain on inventory optimisation, lightweight and 9K collections, and margin protection."

Commenting on the stock, Gaurav Sharma of Globe Capital said, "As far as earnings and basic financials are concerned, the company is doing exceptionally well and its margins are clearly going up and so is the profitability. If it is continue to deliver on this path, the stock, which has underperformed for quite some time, can see dome decent upside moves."

However, the expert highlighted that the brokerage doesn't have a coverage on the counter as of now, so he didn't recommend any 'Buy, sell or hold' call, but pointed that the company's financials looked impressive.

From a technical standpoint, AR Ramachandran, a Sebi-registered research analyst at Tips2trades, noted, "Senco Gold's stock is bullish on daily charts with strong support at Rs 329. A daily close above the resistance of Rs 349 could lead to an upside target of Rs 368 in the near term."