Good morning, everyone. On behalf of Elara Securities, we welcome you all for the Q1 FY27 conference call of Senco Gold.

I take this opportunity to welcome the management of Senco Gold represented by Mr. Suvankar Sen, Managing Director and CEO, along with him Mr.

Sanjay Banka ji, Group CFO and Head IR. We will begin the call with a brief overview by the management followed by Q&A session.

I will now hand over the call to the management for his opening remarks. Over to you, sir.

Thank you.

Thank you very much. A very good morning to all the participants, ladies and gentlemen.

We are very pleased to inform that as we begin the financial year 2026-2027 with a very positive mindset, we have been able to have a great performance in quarter one achieving record sales and crossing ₹3,000 crores on a single quarter. The momentum that we had achieved in the financial year 2025-2026 in terms of the performance continues to remain.

As a focus, as a thought process, we have always believed that as the beginning of the year has to begin with a bang as a growth-oriented company, and we have tried our level best to achieve such a performance as we begin the financial year with a great quarter. If you really look at it in terms of the revenue on a consolidated basis, you've seen that we've grown by almost 67%, and it shows that there has been continued and renewed trust for the customers for the brand.

At the retail level, we've grown by more than 50%, which has been a wonderful performance. Specially, we need to keep in mind that this particular quarter had great opportunities and also a certain challenges that we had to overcome.

Specially with almost 65% to 70% of our business coming from the Eastern India and the state of Bengal, this particular quarter, we were faced with the elections, and we had to plan from the previous quarter itself to ensure that we achieve great performance for Poila Baisakh and Akshaya Tritiya. I'm happy to say, and I would like to congratulate my team, that the planning and the execution that had started two, three months back before the quarter had begun was greatly executed and performed.

We also need to understand that in this particular quarter, there have been certain headwinds in terms of Adhik Maas, there have been headwinds in terms of the weather, the heatwave. In spite of that, we had a wonderful month of April where we almost clocked sales of ₹1,500-1,600 crores.

In the month of May and June, we've seen that, against all these headwinds, we still continued to have our sales, but the sales did fall to around ₹500-600 crore on an average on each of the months. However, there was certain supports in terms of the summer weddings, which were there, and we were continuously coming up with many schemes, discounts, offers to have the customers keep coming into the store.

There were certain challenges in terms of footfalls, but with all our innovative schemes and attractive old gold exchange programs that we gave, I would say that it also helped a lot in terms of converting the customers' old gold into the sales of diamond jewellery. All together, we had a wonderful quarter ahead.

Now, we need to see that along with the overall 50% year-on-year sales that we had in quarter one, our same-store sales growth grew by almost 39%, which means that our existing stores continues to have strong relationship with our customers, engaging with them, and trying to make sure that with our innovative designs and new collections, we keep attracting the customers. One observation that I would like to make is that at these high gold prices compared to the last financial year, there have been a shift of the customers moving towards lightweight, more delicate designs, jewellery which is more for the daily wear, gifting items, and jewellery which are more design-led rather than normal, simple, standard, old-fashioned jewellery.

We must mention that the diamond jewellery value we got sales increase of almost 43%, and in terms of volumes, we could grow by 18% in terms of diamond jewellery, which gives a very strong signal in terms of our design and development and shift of the consumers and the long-term impact that these trends would have towards our margin in terms of our effort to increase the stud ratio. Another aspect is that the lower ticket size item were more in demand.

I would say the consumer's inclination to buy jewellery against all the headwinds were there, but what they really wanted is to have jewellery within their budget. We continuously focused on analyzing the data, analyzing the consumer trends, and providing jewellery accordingly.

We kept building up our 9-karat, 14-karat lower caratage jewellery and lightweight jewellery throughout the quarter. Another aspect that we must keep in mind is the old gold exchange, which was almost 43% of the total sales quantity.

On the appeal of our honorable Prime Minister that we must try our level best to reduce the gold import into the country, I think that as an industry, we all stood together, and we put our best efforts to ensure that we could encourage the consumers to exchange their old gold. That has also been a great driver in terms of the overall numbers that we could achieve and upgrade and help the customers to upgrade their old jewellery.

We've seen that the gold price year-on-year has gone up by 61%, and on quarter-on-quarter, it has just gone up by 1%. That has been one of the overall drivers also when we see a value growth in terms of sales.

It has been largely led by the value of the gold going up as well. In terms of the new store that we could add in this particular quarter, we've added three company-owned company-operated stores, we've added four franchisees, and one Sennes showroom, which is focusing on lab-grown diamonds.

The company remains to track, and we will make sure that we open 12 to 15 more stores for the remaining of the financial year. They are very much in the pipeline, and I must also mention to all of you that, much with our strategy that which we are working towards, the majority of the stores that we shall open shall be franchises focusing on the east and the northern Indian markets.

That is one of the strategic focus that we are continuing to do and achieve the results as well. Now looking ahead into quarter two, we've seen that, in all the overall financial year, quarter one is usually because of Akshaya Tritiya and the new years in various zones, and the summer weddings, we have a great quarter one, and quarter three and quarter four are led by the festives and the weddings.

Quarter two in terms of overall sales is on the lower side. However, quarter two is the particular quarter in which we do our planning, building up of the inventory so that we are gearing up well for the festive season.

Another good thing that we are seeing as the market is that towards the end of May or June, we had seen the consumer footfalls or the overall sentiments on the lower side. As we move on to July and August, we are seeing a substantial improvement in terms of the consumer sentiments and the inclination of the consumer towards buying jewellery and building up for their needs and the wedding season as well.

Also, one aspect is that Senco has always stood for innovation and coming up with new collections and designs. As I've mentioned before, that every year, we come up with more than 1,50,000 designs.

This particular quarter and this particular year, we shall continue to come up with new designs. One particular thing I would like to really happily announce to all of you that along with the women-focused designs that we are coming up in lightweight jewellery, be it 9-karat where we were one of the first to launch, and coming up with new collections in Everlite, very recently, we have also come up with a new design collection for men's jewellery under Aham, which is titanium jewellery with gold and diamond.

Again, I can proudly say that much like the innovation that Senco has always been doing, we are amongst the first in industry to have launched titanium jewellery. The good part about it is that while there is gold and diamonds incorporated in the jewellery that shall lead to margins, but with the addition of titanium, overall the jewellery prices, the range with which we are selling starts from about ₹20,000 and is about ₹20,000 to ₹1 lakh, which is very much affordable by the consumers.

One thing as our strategy, as our focus, as what we will drive for the upcoming financial year is that we'll continue to prioritize on the lightweight jewellery collection, we are continuously analyzing the data, optimizing our inventory, and ensuring how we can improve our diamond jewellery sales and the increase of our franchisee stores so that our margins are protected, we continue to be ensuring that, yes, how we can keep on improving our margins, and also to ensure that our return on capital is happening on the best optimal manner. We remain focused on achieving 20% plus growth in terms of value for this particular financial year, building the brand Senco across the nation so that we can reach out to more customers and open more stores and franchises and grow across with a geographical focus on east and northern India with our own stores and our franchisee stores.

With this, I would like to request Mr. Banka to say a few words before we start taking questions from all of you.

Thank you very much.

Yes, good morning, sir. While sir has given a detailed background, we would like to clarify that the total growth is 67%, while the retail growth is 50%.

This retail growth of 50% has been observed in a secular trend across all the zones. We have seen very good growth even in the newly launched central region where we have seven stores, or in Delhi NCR, we have got a good growth.

Overall, we have a very good growth between own store and franchisee as well. The ASP has seen almost a 40% YoY increase versus last year quarter one.

The ATV has seen an increase of 38% YoY. When we look at EBITDA at 7% range, while obviously the comparison is against Q1, but every quarter has its own unique characteristics, particularly in jewellery industry.

Q1 last year was covered by a price rise, and we had clarified in Q1 last year that while the result is 10.1%, but look at our sustainable EBITDA between 7.5% to 7.8%, and that's what even with the quarter one results, we give the same guidance. This 7% EBITDA margin for the quarter is very good margin which we feel at ₹213 crore, and the PAT for the year is ₹101 crore consolidated.

The PAT is partly lower against stand-alone due to the impact of our three subsidiaries. Out of our three subsidiaries, the factory subsidiary, which is a captive powerhouse for design, captive powerhouse for supplying jewellery, that is doing very well, and that is enabling us to launch almost 100 designs per day.

However, the Sennes brand, which is in the nature of start-up, and is still working towards the lab-grown diamond, perfume, and leather bags. Any new brand takes time.

There is partly impact of Sennes Fashions Limited and the Dubai entity due to which the PAT is lower, but PAT is still at 3.3%. What we want to reiterate is that the quarter should be seen in larger perspective.

We have already optimized our inventory, which has led to improvement in the inventory days. We have already taken various actions to obtain operating leverage, and overall for the year, we continue to remain optimistic to give a guidance of 7.5% to 7.8% EBITDA level.

With that, we can initiate the earning call and invite you all to ask your queries.

Hello, Mr. Sen and Banka ji.

Thank you so much for the update and very good performance. Sir, my first question is regarding the guidance that you gave for the year.

We are still sticking with 20% growth for the year, which will mean that for the rest of the year, we will not grow at all. What am I missing here?

You have had a spectacular Q1 in spite of whatever headwinds that we had. Now that the Adhik Maas and election is behind us, why are we so negative for the growth for the rest of the year?

No, I totally appreciate your question, and if you've seen our overall performance over the past two, three years, we have always been a little conservative in terms of giving the guidance. Our range that we usually give to all of you is a growth of 20%, 25%.

We've had a wonderful first quarter, and I'm sure that this performance of quarter two, quarter three, quarter four will continue to remain. We believe that after the end of quarter three, we will be giving you any kind of revised performance.

Yes, if you really look at it from a 20% plus guidance that we give you, maybe we'll say 25% plus guidance.

For the rest of the year,

and whatever it averages out. You're totally, logically saying whatever you're saying.

For the whole year, from last year's performance of ₹8,400 crores, we can comfortably say that we should be crossing ₹10,000 crores for sure. Our internal team endeavor is to have higher numbers as well.

This is just something that you please appreciate that we'll be conservatively guiding, and as the year ends, we will keep updating you with our performance.

Sure. Sir, you said April, we had a spectacular month, but obviously May and June because of various reasons plus also, little global uncertainties and Prime Minister also being a little conservative on gold, we saw decline in sales both in May and June.

Can you give us like but you said that July and August were very good in terms of footfalls. Just I'm I'm not asking for an absolute number, but like have we have we gone back from 500 a month or 600, 700 a month to close to 800, 1,000 a month in July, August, or at least July?

I would say that, as a breakup of the quarterly numbers of Q1, we had almost 55% of the contribution of the total quarter coming in month of April, and the remaining 45% coming in the month of May and June. That is how the overall quarter looked like.

I would say that from the month of July, we are seeing that July the footfalls were there, the consumer sentiments improved. Compared to June, we've seen a stronger traction in July and August, but again, I would say from July, August, we are up by 8% to 10% right now.

This will continue to be in this trend. Again, the build-up would again happen greatly in the month of October and November.

That's how the seasonal trend looks like.

Just to be sure, July you are saying 8% to 10% growth over last year's July?

No, last year's July, no. I'm talking about July having a 8% to 10% growth over May, June.

Just to update you guys on compared to where we stand up previous to last year, we are about 25% growth or so.

Okay. July was still 25% growth.

Okay. Sir, please break this up for me, Banka ji, last, sir, when we did 10% margin, I'm assuming reasonable portion also came from inventory gains in Q1 of last year.

If I have to think about just operational and this quarter obviously there was no inventory gains because the price QoQ was 1%, doesn't really matter. If I have to think about operational profit, would it be fair to say that probably ₹70-75 crore of PAT last year is now ₹100 crores of profit, which purely came from operations YoY?

Yes, exactly. If you see the earning call last year, we said that at least 1.5% to 2% can be ascribed to the inventory inventory gain.

Right?

Even if we So

from that perspective, the the while we are not able to declare the adjusted adjusted EBITDA and PAT every quarter, but we can safe very com- comfortably assume that the adjusted PAT for last year Q1 was around ₹70 to ₹75 crore, and ₹100 crore for this quarter should be seen from this perspective. While while this PAT is 7%, but once again, this adjusted PAT has to be computed, and there are certain factors.

Sorry, the the the the EBITDA reported EBITDA is 7%, but adjusted EBITDA will be will be a factor of the the hedging factor, the discounting, and other competitive factors, custom duty gain as well. That's how we have to see.

Effectively, we should look at 7.5% to 7.8% as a sustainable EBITDA, and which will occur which will accrue over two to three quarters normalized.

Right. Sir, just last thing on margins is when you say 7.5%, but in one of your leanest quarters, you have done 7%.

Obviously, December quarter is going to be double digit, just operationally EBITDA margin. On top line also, you are conservative, on margins also, you are conservative, something is not adding up, right?

Because with such sales growth, your cost is not going up in the same region, shouldn't your margins be higher?

See, sir, as MD sir has just said, we are usually conservative in giving our guidance, this being first quarter, and even last year, the same trend was observed. We were giving a lower guidance, but actual top line as well as bottom line was higher.

Since this is beginning of the year and since we have done a detailed planning, we look at sustainable EBITDA margin of 7.5% to 7.8% only. If anything more happens, it will be partly due to the other dynamics.

Price rise, discounting, improvement in stud ratio, but sustainable, let's look at 7.5% to 7.8% only.

Right. Sir, thank you so much.

Hi, sir. Thanks for the opportunity.

Sir, my first question was on your other expenses. Essentially, it has been in the region of ₹123, ₹124 crores generally, and it has suddenly gone up to ₹229 crores.

If I have to just take the other expense normal run rate, then you could have achieved a far higher margin. I can understand the gross margin impacted by the decrease in inventory, that has an impact.

When I look at your overall margins, this has made a big difference. What is the reason behind it?

Thank you very much for the question. In terms of other expenses, I would attribute it towards the effort that we have put in terms of increasing our businesses.

There could be marketing-related expenses, there are a lot of expenses in terms of renovation of our stores that we did because it was a lean season, and there are also certain efforts we've done in terms of our customer offers and schemes. Because of that effort, there are certain expenses that have been booked to mitigate certain risks.

I would say that, yes, in terms of your other expenses, it has looked higher, and if we could control it more, then our margins would look much better. Again, I would say that let us look at the whole year, and I'm sure that these kind of other expenses would not be happening on every quarter, and that would be one of the reasons why our margin would also look better as the year progresses.

Okay. We should not take this kind of other expense, right?

Because I was also looking at your marketing expenditure from the PPT. It has seen a growth, but the main driver has been other expenditure ex the marketing expenditure.

It was more particular to the quarter, and going ahead, we should see other expenditure subside or normalized? Is that what the reason

Then to update, the way for our men's jewellery brand, we've had one of our brand ambassador, and then we have launched a new collection, we've taken new brand ambassador, spending money to build attraction and attract the new-generation customer. Similarly, for the youth-oriented and young-generation everyday wear jewellery, we will continue to have those kind of efforts to have more younger consumer segments coming to our store.

Yes,

my question is that whether this other expenditure ex of the marketing cost Because marketing cost when I see in the PPT, it has declined by 19% whereas from about ₹43 crores, it has come down to ₹35 broadly. Here, it has grown from ₹80 crores to ₹195 crores.

Would this run rate continue, or has it subsided, right? It would be more about a quarter.

Correct. Exactly.

This kind of a run rate would not continue, and it would be subsiding in the upcoming quarters. Okay.

My second question was on the finance cost where there was a lack of availability of GML and that led to the increase in cost. What was the reason for the lack of availability of GML, and what is the scenario currently?

No, if you remember during the month of March and April, when there were certain issues which we also discussed during that particular quarter calls that banks were not being able to provide with the gold, imports were stuck, and there were a lot of discussions happening around that, and there was a panic because anyway the season was peak season, and we would have Akshaya Tritiya sales around, and we need to make sure that the raw materials were available. That was a situation that happened during the month of April, and with the duty changes that was supposed to happen, there was a lot of uncertainty from the bank side also, all triggered by the fact that this geopolitical scenario was leading to any kind of effort towards reducing import of gold into the country.

That was a reason why the gold metal loan was not as freely available during those first two months, and we had to depend on procuring gold from the local markets. In order to mitigate that risk, we had to reduce the metal gold loan at that point of time.

Now that things are stabilizing, I think we're all praying that the geopolitical uncertainty and whatever rift is happening moves towards a solution, and with the crude oil price coming down, hopefully the pressure on the economy will also come down, and importing gold shall not be such a big problem for our nation at that point of time.

Okay. Now

Now it is much easier available, and we will start building up the metal gold loan portfolio once again.

That's it from my side.

Thank you.

Hi, thanks for the opportunity. Am I audible?

Yes, you are audible.

Yeah. Two questions.

The first one is what is the current hedging ratio? Second one on the inventory side, have the supply chain issues been resolved, and what is our current inventory position and also the weighted average cost of that inventory?

See. What we've explained that while the supply chain issue was for GML unavailability, but gold was available.

Let's say if you look at the old gold was available from the customers while it is 43% blended for own and franchisee store. From the own store, it was more than around 50%, 55%.

Then we buy readymade jewellery, traded jewellery, that is around 20%, balance either we take from GML or from the bullion vendors. It's only a function of the finance cost, but that unavailability was not a concern as far as availability is concerned.

We have been looking at our inventory days and inventory turnover versus the peer in the industry, and it's really a opportunity for us. We have implemented a gold rate based software which we are evaluating the store performance, and based upon that performance of store one by one, we have reduced the inventory in terms of kg and value both.

That's how it has led to improvement in the inventory days, and we will continue to improve the inventory efficiency in line with the industry benchmarks.

What is the current hedging ratio? I'm not sure if I missed on that part.

Currently, it is coming to around 152 days. I think that is stated in the presentation as well.

152

days. We'll continue to improve it further.

Okay. How has been the demand [unclear] part, and also another bookkeeping part.

Why did retail and reported sales diverge by 19%?

Can you repeat?

First was on the [unclear] demand in the current quarter, and another bookkeeping question. Why did retail and reported sales diverge by 19%?

How is it our connection? If someone can please clarify what was the question, we could be

It was not clearly audible, sir.

Am I audible now?

Yes.

First is on the part of how has been the demand in the quarter so far? Secondly, bookkeeping question it is.

Why did the retail and the reported sales diverge by 19%?

Some reported sales or something 19%.

I think you are talking about the business update, right? If you referring to business update, there I think we reported 62 and actually 67.

As we have said, when we do the reporting, we are slightly conservative in reporting the number. That's why, and at that point of time, certain adjustments are pending.

The sales right to return, all these accounting adjustments are pending. That's how there is a gap between reported of business update of 62 versus 67 as of now.

The present numbers are limited review numbers. What we give in the business of note update is the closure number.

That can always vary upward or downward slightly.

Right. To add to your current quarter's performance

Yeah.

Your current quarter performance is about 25% growth year-on-year, so that was the answer to your other question.

Hi. Thank you for the opportunity.

Am I audible?

My question was regarding the operational thing. When you guide for 7.5% to 7.8% EBITDA margins and around 4% of PAT margin, is the hedging part also included, or only the operational margins will be those?

So 7.5% to 7.8% assumes a perfect situation that there is no gold price rise, there is no gold price fall, and everything is properly hedged, right? It's assumed that there's no price rise or price fall, and everything is perfect.

Now, depending upon the percentage of hedging, 50 or 80 or 100, the results can slightly vary. That's exactly is our intent that based upon our present hedging level, how can we ensure and deliver 7.5 point 7.5% to 7.8% to you.

We've delivered that in the past also.

So 7.5% to 7.8% will be only operational, right?

Only operational, correct. Absolutely.

Okay. Second was on the inventory hedging only.

How do you decide what levels of hedging will you do for the quarter because the margins has been quite wild, right? It was 10% for the Q1 FY26, it has come down to 7%.

What factors do you consider for this hedging?

No, we've been talking about our hedging strategy and we have been guided by the board policy. Where we are keeping our hedging percentage on approximately 50% because we have seen in the last financial year that there has been extreme volatility, and we said that we need to manage the risk of liquidity and the price movement.

For now, till the gold prices really stabilize to a certain extent, we have been doing our hedging for approximately 50%. That's been the thought process, and we would like to maintain, and gradually with more stability take it upwards, but for now, the hedging percentage should be around 50%.

Okay. Just one last

Hi, sir. Congrats on a good

Sir, I just also wanted to understand, April was very good, and May and June was softer. Our operating margin has come down to 7%, sir.

The question, sir, is one, there was this increase in customs duty, which also resulted in some inventory gain and losses. If you can explain us the hedging part of the Hello?

Sure.

Okay. Sorry.

Sir, I'll quickly repeat my questions. What we have seen is April was very good, and then May and June was softer.

The question, sir, is one, we had built quite a bit of inventory ahead of the quarter. One, how have we used the inventory, and how have we used the hedging part of the overall gold sales, because of which this 7% EBITDA margins have come?

How much of it if at all is there a inventory loss that we have had because there was a customs duty increase, whether we were able to gain out of this or kind of lose it? There's a reference in the presentation or a press release that we will get the benefit of increased customs duty over a Q3.

If you can give us some flavor of this 7% margin, is it despite the losses and/or hedges and the price volatility?

What we would like to clarify is that the build-up of the inventory that we did for the business of Poila Baisakh and Akshaya Tritiya was a great, I would say, initiative, and it did help in achieving the numbers in the month of April in terms of our sales. It was that which really helped us to grow our business, make sure that stock was available when consumers were in a mood to buy.

That was one part of it. Over the quarter, what we have seen is that with the demand not being as much, we've tried to ensure that whatever inventory we had built up, and whatever inventory was selling, to focus on that, and to sell the inventory build-up, and lowering it down.

I think that as we ended the quarter, we could see that our stock turnover ratio has improved substantially. Again, we need to keep in mind that as we move towards the festive season of October, towards September onwards, we will be building up the inventory for the festive season, and over a period of the festive season, we will again try to lower it down.

That's the general strategy with which we shall be following in terms of building up of the inventory and then further on use the season to sell it. I would say, Banka ji, that this 7%, 7.5% is In fact,

primarily what we are saying is that obviously that which I've clarified that 7% to 7.5% to 7.8% is the operational EBITDA, and whenever the gold price rise, there will be some gain, and in case of any gold price fall, there will be some losses. If you've seen our comments, we've said that this quarter, gold price fall, competitiveness, discounting, they had impacted the margins, and increased by the custom duty impact.

That's how you should see the 7% in that larger perspective.

Sir. Sir, also if I was observing that you said our retail sales was 50% higher, our reported sales is more than 60% higher, and the average gold price, as reflected in our press release, is up by more than 60%.

The question, sir, is are we seeing a grammage reduction in sales, and should we be worried about despite our network growing?

See, grammage reduction is not a factor at all. I think when we talk about grammage, we talk about converting grammage into 24-karat purity.

We will start talking about the mixed purity, right? In a mixed purity, certainly grammage has increased.

Okay? Now, in a 24-karat purity level, a slight I think around 1% reduction is there, but as we've always iterated, that the retail jewellery business is not about the volume.

Customers do not consume gold by volume, but by value. The current volume, not only for Senco, but for India at large, has remained around 750 to 800 tons.

That has been the size of import by India, and of that 60% is jewellery, 40% is organized sector. That number largely remains the same.

Within that only, company has grown four to five times. We look at grammage as a lesser part of our business.

We focus more on making charges, which are a percentage of value and not per gram. I hope it clarifies your query.

Yes, sir. Appreciate.

Sir, last quick bookkeeping question, sir. Cash flow from operation, is it possible to share for the first quarter?

It should be positive because we have used our inventory.

See, cash flow from operation will be sharing in H1. As you would have seen for the last year, it's an accounting optics.

If the GML is lesser, it will be impacted by the GML. This quarter, since the GML borrowing is lesser, to my understanding, cash flow from operation from accounting perspective will be negative.

Let the quarter two span out, and when we publish, cash flow statement will become clear. It is more of an accounting concept, not the business reality.

The business is generating the sales, 67% growth is there, customers are coming, we are making profit. The only thing is that we are investing and ploughing back the money in the business itself.

Thank you.

That explains. Thanks a lot, and all the best, sir.

Hi. Good morning, everyone.

I just have a couple of questions. Regarding the inventory days, congratulations.

It has come down meaningfully. Can we expect it to at least if not reduce further, but can we expect it to maintain at these levels?

See, Arvind ji, while we are taking all effort to improve the inventory days, as a business, we are equally concerned about business efficiency, improving return on capital employed and return on equity. Now we are bracing for, let's say, 25% to 30% growth.

We've already achieved 60% growth in quarter one. Now, when the entire business is growth-driven, one has to be clear that you have to provide the customer with choices.

Choices, larger range, larger designs, and that becomes possible only with a inventory. We have to maintain a very tightrope balance.

We prefer to see return on equity and return on capital employed as a most important and sole criteria, and these factors like inventory days as a subsidiary criteria. We take your suggestion and concern with utmost respect and importance, but we will like to grow and not at the cost of one or two parameters and focus on improving overall shareholder wealth creation in the form of return on equity.

Okay. I hope you also benchmark your performance with some of the listed peers.

If I look at their inventory turns, it's closer to three or 3+ for some of the newly listed companies like P N Gadgil, and their return ratios are significantly higher, closer to 25%, 30%. Where are we lacking?

No, sir. We don't want to comment on our competitors.

See, every business has certain unique customer base, certain unique product design. We are also tracking all our competitors with utmost respect and with equal curiosity.

At this juncture, we can say that I don't think it is lacking. It is a business model, market, business strategy.

While this terms may appear generic, but let me assure you, sir, that we look at all factors, and in the initial part, we said that we have implemented a very AI-based software where we are looking at inventory productivity by jewellery, by range, by design, by metal, by customer base, everything possible that we are doing. We have to look at creating the traction in the market.

That is all I can without divulging too much on this forum.

Okay. Thank you, Mr.

Banka. Finally, I want to

Hi. Thank you, team, for taking my questions.

I have a few questions. I hope I'm audible.

Yeah. My first question is, sir, basically, the gold prices ran up a lot in last one year.

On a steady-state basis, what is the inventory we envisage to have per store, and what is the revenue per store we are looking for? What is the inventory turn we will have focused on?

See, this is a very strategic question, but just to give a broad idea, based on the market and based on where we are, the inventory that we keep can range between maybe 15 to 18 kgs to about 35, 40. It all depends on the market potential and the market requirement, and also what is the competition, that where they are keeping what.

It will be dynamic. You cannot fix it to one particular number, but it'll be an average of the range that we spoke about.

At the same time, let us assure you all that we are also conscious that we do not want to block our inventory unnecessarily. We are looking at the consumer budget.

We are introducing various types of purity: 9-karat, 14-karat, 18-karat, along with the traditional 22-karat, just so that we could fulfill the requirement of product as per the budget of the customer. This is one aspect of it.

The second aspect is that along with the gold jewellery, there has to be a substantial availability of the diamond, platinum, and these kind of modern high-profitable jewellery are kept at the store as well. We've got a whole optimum stock store-wise that we maintain, and we try to fulfill.

This is how one has to look at the overall picture.

Yes, see there's an inventory value which is appearing in the balance sheet as on March '26. Out of that, let's say 10% to 15% if you exclude, being in transit or in various stages of tagging, etc., that if you divide by the number of stores, you can find out average inventory per store.

That once again will be a slightly narrower approach because we've talked about our hub-and-spoke model. The inventory at our own store, let's say, in West or in Mumbai, that is also meant for my Nagpur store.

Or something in Indore may be meant for Gwalior store, or one in Patna may be meant for Bhagalpur store. In a narrower approach, you can take 10%, 15% inventory being in transit and tagging and divide that by number of stores.

In larger context, the inventory per store is a more of a strategic number.

Got it. Sir, I will tell you where I am coming from.

Basically, the vision we gave ₹20,000 crores revenue with 300 stores by 2030, which broadly means doing around ₹60-65 crores revenue per store. At 2-2.5x inventory turns, that means around ₹25-30 crore of inventory per store.

I was not able to understand the math over there. No,

that number is correct. There are many stores which have crossed ₹200 crore.

We have stores in the range of ₹50 crore, ₹100 crore, ₹150 crore, ₹200, and ₹250 also. In one of the call, I think I gave a blended number of ₹37 crore average.

You can take the total and divide by number, you will get the number. It's very very conservative number.

I'm saying that this vision which we have given is very much achievable given the growth. Obviously, it will entail increase in the inventory as well.

Let's say currently when we are looking at a ₹5,000 crore inventory to achieve the ₹20,000 crore top line, you will certainly require ₹8,000 to ₹9,000 crore of inventory. If you do the peer benchmarking for the competitor who are doing around 10 doing around ₹20,000 crore, you will find a similar number.

You can find inventory of around ₹12,000 crore for a ₹20,000 crore company. Oh,

got it.

That's why instead of giving those details, we've said that we will be looking at improving the return on equity and return on capital employed to 20% range. Inventory will be subset of that efficiency.

Makes sense, sir. Thanks a lot for the answers.

Thank you.

Hi. Thank you for taking my question.

Just one question, if I may have missed out on the answer already, I'm sorry. I just wanted to understand that this margin, the EBITDA margin that we've reported in this quarter, right, what would be this number removing all the one-offs that were there?

Let's say removing the custom duty rate change impact and whatever the impact would have been because of the gold price movement, et cetera, what would our core business operating margin would have looked like in this quarter and the comparable margin for the previous quarter as well, please?

See, Vaishnavi, we have said that sustainable EBITDA margin is 7.8%, 7.5% to 7.8%. This quarter number, we are impacted by the hedge position.

We've said 50% hedge. It means that there will be certain impact on the realization due to price fall, then the discounting in the market due to the custom duty increase, then there are the old gold scheme which we offer, that also impacts the margin which other jewellers have also said.

Custom duty gain has come in. Similarly, when we offer customer schemes and advances to promote the sale, we have to give certain benefits to them.

This 7% is net of all of that. This is only quarter-specific.

We have to see the performance over three to four quarters, and let us look for the entire year where we are confident to deliver 7.5% to 7.8%.

Which I understand. For example, if we're talking about peers, right, Titan explicitly stated what was the positive impact of the custom duty benefit on their overall EBITDA.

If I want to say that what was the positive impact of the custom duty rate change on our numbers, what would that number be approximately?

That number we have not called out as yet. Okay.

Is there any chance of us getting this number, sir? Because then that would help us in terms of building our steady-state business margins going forward without any of the one-offs.

Basically, how to look at the business on an operating performance basis instead of all the hedging numbers, et cetera, all of that also coming in the picture. No.

Vaishnavi, in terms of the one-off gains, we believe that whatever gains would be coming from the duty rise will be achieved over the coming two, three quarters. On an estimate basis, maybe the gain that we have achieved in the first quarter because we had 45 days more or less 45 days after the announcement, in our estimate, it stays about ₹12 to ₹15 crore.

That is the kind of range with which we should be expecting the gain to come in. Again, the gain that we have achieved and received will be mitigated or based on whatever offers, schemes, discounts, blah, blah, blah, we are giving.

Yes, from that particular custom duty gain, we can estimate that yes, this particular quarter could be anything between ₹12 to ₹15 crore. That's just an estimate that we are thinking is what we have achieved in this particular quarter.

As the quarters progress, we will see that whatever gains have come in we'll keep kind of estimating and calling it out as and when we feel. That's

Because I think previously when the custom duty rate

Thank you, sir. My question is how does management intend to optimize the 50% hedging strategy going forward?

Particularly, if the gold prices are expected to rise. Am I audible, sir?

Yes. We are listening to you, madam.

Okay. My question was if the gold prices are expected to rise and the higher import duty, it provides some cushion in the margin, how is the management planning to adjust the hedging margin?

No, actually, we have no thought in our hedging margin or anything. What you're talking about the margin that we give to banks and MCX, that is one part of it.

From a perspective of a policy, because of this uncertainty and volatility, we believe that a 50% is a very stable, manageable hedging percentage in this volatile scenario where we can balance between risk of price movement and the liquidity available in the company so that the growth trajectory continues to happen. That's where we are managing it and keeping it at these kind of levels.

That is number one. Again, I would like to say that there were times that the company were hedged at 75%, 80%, 85% also when the prices were much more stable, and overall, the margin requirement by these exchanges and banks were at a lower level.

Again, God willing, that when things will stabilize, and the liquidity availability to the company shall be adjusted to this current scenario of the gold price, we will move towards a higher percentage of hedging. However, for now, we would like to state that it will be in the range of 50%.

That is how one has to look at it and plan for the future.

Okay. Thank you, sir.

My other question is

Hello.

Am I audible? Yes, you're audible.

Yeah. Sir, I strongly believe that the management is not shareholder friendly.

I am saying this because your quarterly results throws a lot of uncertainties. Sometimes your margin comes at 13%, sometimes 5%, sometimes 8%, and I know the hedging policies and the inventory then, but this is unique to Senco Gold one only.

Because no other listed jewellery company have so much unpredictability. The result is that your share has been the worst performer in the jewellery sector despite all reporting all-time highs revenue and the blockbuster sales and all.

I believe that you should seriously need to become more predictable regarding margin and be shareholder friendly.

Yes, we really appreciate your feedback, sir, and we keep guiding on a 7.5% to 7.8% for the whole year, and we shall continue to work towards achieving these numbers. We shall continue to look at 20%, 25% growth on the top line.

These quarterly uncertainties is something that we all are having to deal with. Rest assured that we want to be shareholder friendly, that is our intent, and we also want to be transparent and create a tool and a platform so that we can get the predictability as much as possible also.

Kindly bear with us. The last two, three years, we know how much there has been uncertainty, geopolitically, liquidity-wise, gold price have moved.

All these things have happened, and we are in a growth phase. We really take your inputs, and maybe that is what it is.

Our intent is to keep growing the company, keep growing the profits, keep having return on capital for our shareholders, and building on the business. We will take your points, and we will continuously work on it.

Yeah. Sir, as a

Hello. Am I audible?

Yes, you're audible.

Just on the hedging thing again. We have been guiding for 50% type hedging policy.

Have we considered going to 100% hedging, benchmarking ourselves against the bigger players, someone like Titan or Kalyan? I know this is the board policy for 50% to 70% of hedging.

Can we go to 100% of hedging? It is

something that we would ideally like to happen. If you look at it, it is about, say, ₹5,000 crore, and our turnover is, say, ₹10,000 crores.

In effect, you are protected yourself for six months of sales. There are a lot of these methods in terms of the hedging.

We are saying that we are hedging about 50% of our inventory. We would like to say that we want to mitigate the risk by hedging 50% of the inventory.

If that mitigates the risk of any kind of margin volatility for the quarter or one quarter, two quarter, then so be it. Ultimately, our objective is to mitigate the margin volatility and any kind of risk on the price.

We will move towards that. 100% is a very ideal number, and we would move closer to that.

I would say that 75%, 80% because this 20% is something that we should always keep in buffer, and we want to disclose it to you as and when so that we have the flexibility. That's from our side.

Yes, we would like to hedge as much as possible in the long run.

Okay. Thank you.

Thank you, ladies and gentlemen, for your time, for all your questions. We would like to reinstate that this quarter two will be a quarter for planning, for ensuring that we are all moving towards building up for a great quarter three.

The good aspect is that after a slow May and June, July, August, we continue to see a 25% growth year-on-year, which is a good sign, and I'm confident that as we move on to the festive season, we shall be seeing higher levels of growth. We can see a renewed interest in the consumers in terms of buying and planning and preparing for the festive and the upcoming wedding season.

Another aspect that we would, before the closing, like to reiterate that while we are looking at every quarter and excelling on our performance and the team is working on it, but broadly speaking with a long-term vision from a ₹8,400 crores that we achieved in this particular financial year, as a team over the coming four to five years, we are all working towards ensuring that how do we take our company to a ₹20,000 crore plus company from a 200-odd stores that we have right now which we shall be achieving for Senco in the upcoming one or two quarters, how do we take our company to a 300+ store company. We are having multiple models, whether it be Senco, it could be Everlite, big format, small format based on the market requirement and the opportunities.

Also, we all know that ultimately we are driving business where we want customer satisfaction as well as driving profits for organization and the shareholders. From a current 7.5% to 7.8% that we keep guiding, our endeavor is to take our profitability through maybe higher stud ratio, through other initiatives towards 8% and have a PAT percentage of about 4.5% to 5%.

I think that is something that should be sustainable, which will balance between growth and profitability. As Banka ji has been kept saying that we need to look at a return on equity, return on capital.

We are very conscious of that. We're optimizing our stocks, we're driving efficiency, and we shall continue to work towards building the best possible return on capital for our business and for our shareholders.

Thank you very much for all your best wishes and blessings, and we take all your inputs in the right spirit and in the positive way so that we can improve ourselves, and we'll continue to perform with our team. Thank you very much.