Senco Gold share price extended rally and surged 12% in early trade on Tuesday after the company reported a robust business update for the March quarter. Senco Gold shares rallied as much as 12.03% to a record high of ₹1,065.65 apiece on the BSE.
Senco Gold, the pan-India jewelry retailer, reported 39% year-on-year (YoY) revenue growth in the fourth quarter of FY24. For the entire fiscal year, the revenue growth was 28% YoY. The company achieved volume growth of 13% in gold and 19% growth in diamond volumes compared to the previous fiscal year.
The Same Store Sales Growth (SSSG) during FY24 was 19% out of retail sales growth and 23% out of the total 30% retail sales growth during Q4.
Senco Gold shares reacted positively to the strong Q4 update and the stock jumped 18.59% on Monday. In one week, Senco Gold shares have spiked over 30%.
Read here: Senco Gold shares jump 19.5% to all-time high on strong Q4 business update
Analysts at Emkay Global Financial Services believe even after the strong run-up in Senco Gold share price, valuations are at a significant discount to listed jewelry peers, despite its resilient growth execution historically and similar medium-term growth prospects.
“An increasing studded mix should add to our estimate of ~20% topline growth and help deliver 23% and 27% EBITDA and PAT CAGR over FY24-26E,” said Devanshu Bansal, Research Analyst at Emkay Global Financial Services.
Despite similar growth prospects and return profile, Senco trades at a ~35% discount to Kalyan which is unwarranted; we believe strong execution/delivery should continue driving a re-rating going ahead, Bansal added.
Emkay Global maintained its ‘Buy’ rating on the stock and raised Senco Gold share price target by 19% to ₹1,100 per share, on the back of the 2-3% EPS change and 15% increase in its target price multiple to 29x FY26E EPS. The new target price implies an upside potential of over 15% from Monday’s closing price.
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Continued execution and traction in non-East geographies offer an added re-rating upside, it said.
Senco Gold share price has given multibagger returns since its stock market debut in July last year. Senco Gold shares were listed at ₹405.3 per share, a 28% premium over the issue price of ₹317.
Senco Gold stock price has jumped by a staggering 163% from its listing price and more than 236% from its issue price.
At 10:20 am, Senco Gold shares were trading 6.16% higher at ₹1,009.75 apiece on the BSE.
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 16 Apr 2024, 10:23 AM IST