Senco's stellar Q3 topline growth driven by gold price rally; likely to close FY with ₹8,000 cr revenue: MD

Senco Gold & Diamonds, one of India's leading jewelry retail chains, has delivered exceptional performance in the third quarter of FY26, posting a remarkable 39% same-store sales growth (SSSG) on the back of strong festive and wedding demand coupled with significant gold price appreciation.

Gold price rally fuels revenue growth

Speaking to ET Now, Suvankar Sen, MD & CEO of Senco Gold & Diamonds, attributed much of the stellar topline growth to the extraordinary surge in gold prices over the past year. Gold prices increased by approximately 65% over the last 9-12 months, with a sharp 20-23% jump during Q3 alone (September 30 to December 31).

"What we have seen in Q3, the high growth numbers in topline or SSSG is driven largely by the great increase in the price of gold," Sen explained. However, he noted that volume growth painted a different picture, with Q3 volumes down 3% year-on-year and nine-month volumes declining by 10%.


Despite the volume contraction, Senco maintained customer engagement by creating jewelry tailored to consumer budgets and requirements, which helped sustain business momentum during a period of elevated gold prices.

Realistic growth expectations

While the 39% SSSG figure appears impressive, Sen provided a more grounded perspective on sustainable growth rates. "A realistic SSSG whenever we do a business model and forecasting, we keep it at anything between 12% to 15%," he said. Combined with 4-5% growth from new store openings, the company typically targets an overall annual growth rate of 18-20%.

The company's topline guidance for FY26 remains in the 20-25% range. With FY25 revenues at ₹6,400 crore, Senco expects to close the current financial year at approximately ₹8,000 crore, representing a 25% year-on-year increase.

Strong margin performance with strategic hedging

Senco's EBITDA margins witnessed significant expansion in Q3, reaching 13.2%. However, Sen clarified that approximately 2.5-3% of this margin boost came from the company's hedging strategy, which was maintained at 55-60% of inventory.

"For Q3, a good 9.5% to 10.5% is what we see as actual EBITDA," Sen explained, with the remaining margin gain attributed to favorable gold price movements. The base business EBITDA, derived from making charges, diamond sales, and other standard income streams, remained robust at around 10%.

For the full year, the company has revised its sustainable EBITDA margin guidance upward to 7.5-7.8%, from the initial 7.2-7.5% projected at the beginning of FY26. This reflects improved operational efficiency and favorable product mix dynamics.

Diamond jewelry and channel mix drive profitability

Several factors contributed to Senco's enhanced margin profile in Q3. The company reported 34% growth in diamond jewelry sales, which typically carry higher margins than gold jewelry. Additionally, own-store sales grew faster than franchisee sales, with company-owned outlets commanding a larger share of overall business—a shift that positively impacted margins given the higher profitability of direct retail operations.

Strategic diversification: Melorra and lab-grown diamonds

Looking beyond traditional gold and diamond jewelry, Senco has made strategic investments to capture emerging consumer segments and lifestyle trends. The company recently acquired a stake in Melorra, a new-age jewelry brand focused on lightweight, contemporary designs.

"We are an 88-year-old legacy company. Our core competency is to work directly with handcrafted karigars, create handcrafted jewelry, with an element of trust associated with us," Sen said. "When we have to look at catering to the new generation, their demands and their culture, we need to have these new-age brands that would cater to the changing lifestyle."

While Senco's average transaction value currently stands at ₹90,000-95,000 (equivalent to 5-6 grams of gold at current prices), the Melorra partnership will help the company connect with younger consumers seeking lightweight jewelry options with contemporary designs.

Sennes: Betting on lab-grown diamonds

The company has also launched Sennes, a lifestyle brand focused on lab-grown diamonds (LGD). Sen positioned this initiative as both a business opportunity and a contribution to India's manufacturing ecosystem.

"Lab-grown diamonds is a made in India product. It is something that will help the nation overall as we put in more funds and put in more branding and make it a desirable object for the consumer," he noted. The Sennes brand will extend beyond jewelry to include perfumes and leather bags, reinforcing Senco's positioning as a "house of design."

The lab-grown diamond strategy aligns with global trends where LGD jewelry offers consumers design-forward options at more accessible price points compared to natural diamonds. With India emerging as a major hub for LGD production, Senco's entry into this segment appears well-timed.

Key Highlights:

• Q3 SSSG surges to 39% driven by festive demand and gold price rally
• EBITDA margins expand to 13.2% in Q3; sustainable margins guided at 7.5-7.8%
• Company targets ₹8,000 crore revenue for FY26, up from ₹6,400 crore in FY25
• Strategic investments in Melorra and lab-grown diamond brand Sennes mark diversification push

Navigating challenging market conditions

Senco's Q3 performance is particularly noteworthy given the challenging market environment characterized by record-high gold prices that dampened volume demand across the industry. The company's ability to maintain customer engagement through product innovation and price-point optimization demonstrates operational resilience.

The 55-60% hedging strategy proved effective in a volatile pricing environment, allowing Senco to benefit from price appreciation while managing inventory risks. This measured approach to hedging contrasts with the previous year's Q3, which saw losses due to duty cuts and adverse price movements.

Outlook and growth strategy

As Senco approaches the final quarter of FY26, the company remains focused on its 18-20% sustainable annual growth trajectory, balanced between same-store sales growth and new store additions. The revised EBITDA margin guidance of 7.5-7.8% signals management confidence in maintaining operational efficiency even as gold prices stabilize or potentially moderate.

The dual strategy of strengthening core gold and diamond jewelry operations while diversifying into contemporary brands and lab-grown diamonds positions Senco to capture multiple consumer segments across age groups and price points. With festive demand remaining strong and wedding season tailwinds expected to continue, the company appears well-positioned to achieve its ₹8,000 crore revenue target for the current financial year.