Senco Gold Limited, incorporated on August 22, 1994, is a prominent jewellery retail player in India with a rich history of over five decades. It holds the distinction of being the largest organised jewellery retail player in the eastern region of India in terms of the number of stores. Moreover, among jewellery retailers based in eastern India, Senco has the widest geographical footprint in non-eastern states. The company operates under the trade name "Senco Gold & Diamonds" and offers its extensive range of products through various channels, including its 70 Company Operated Showrooms, 57 Franchisee Showrooms (including 4 franchisees owned and company-operated showrooms), and various online platforms.
Senco Gold & Diamonds takes pride in its diverse catalogue, which features over 108,000 designs for gold jewellery and more than 46,000 designs for diamond jewellery. The company specialises in handcrafted jewellery and has a team of designers, comprising 20 members as of March 31, 2023, who collaborate closely with skilled local craftsmen (Karigars) in Kolkata and across the country to create most of the designs in-house. The manufacturing process primarily involves over 170 experienced Karigars who bring these designs to life.
Senco Gold IPO Objectives:
The company proposes to utilise the net proceeds from the issue towards the following objects:
- Funding the working capital requirements of the company.
- General corporate purposes.
Why should you invest in the Senco Gold IPO?
- The brand has been consistently performing to be the most trusted jewellery brand. From 4th place, they have been promoted to the second position for the most trusted jewellery brands by TRA’s Brand Trust Report
- The brand mainly focuses on quality, craftsmanship and original designs to continue its brand recognition and maintain its customer loyalty
- The revenue of the brand has been consistently higher in the last three Fiscal years
Senco Gold India Ltd Company Financials
| KPI | Fy 2019 | Eight months ended Nov 30, 2021 | Fy 2021 |
|---|---|---|---|
| Revenue from operations (₹ in million) | 24,842.63 | 24,672.59 | 26,603.7 |
| Profit after tax for the period/year (₹ in million) | 720.55 | 1,015.68 | 614.82 |
| Return on Capital Employed (in %) | 15.17 | 12.61* | 13.22 |
| Return on Equity (in %) | 16.66 | 15.62* | 10.65 |
| Revenue CAGR (Fiscal 2019 – Fiscal 2021) (in %) | - | - | - |
| Inventory Turnover Ratio | 2.91 | 2.07* | 2.50 |
Know before investing
Strengths
4Through various retail stores, the brand has reduced geographical concentration
The brand sells hallmark jewellery and certified diamonds, resulting in impeccable trust-building among the customers
The strong brand recollection among customers leads to higher investment in brand
The diverse product portfolio and constant introduction of new products help the brand to cater to evolving consumers
Risks
4Due to the presence of lots of different pan-India jewellery chains, there is higher competition.
Any adverse regulatory changes like hike in import duty, ban on the gold lease, etc. can affect the margins of the company
The preference of the younger consumer is more toward artificial/fashion jewellery
The business can be affected by highly working capital-intensive operations.
Peer Comparison
| Players | Store Count | Sector P/E | Market Cap | Dividend Yield |
|---|---|---|---|---|
| TBZ | 31 | Pan India; majorly Western India | - | - |
| Thangamayil Jewellery Ltd | 50 | Southern India (concentrated in Tamil Nadu) | - | - |
| Malabar Gold Pvt. Ltd | 243 | Pan India, international: Bahrain, the UAE, Kuwait, Malaysia, Oman, Qatar, Saudi Arabia, Singapore and the Us | - | - |
