 "Senco gold shines with Rs 1,000 cr festive sales despite record high prices")
Gold buyers in India defied record-high prices this festive season, helping Senco Gold achieve one of its best-ever sales performances. The Kolkata-based jeweller reported sales of over Rs 1,000 crore in October, fuelled by festive celebrations like Navratri, Diwali, and Dhanteras, reported The Economic Times.
Senco’s managing director and chief executive officer, Suvankar Sen, attributed this milestone to resilient consumer sentiment despite economic challenges. “The gold price had been at an all-time high during the festive season, which had a detrimental impact for many customers,” Sen said, acknowledging the hurdles faced by buyers.
The festive cheer translated to a 14-15 per cent Year-on-Year growth in sales during the period, while Senco’s Q2 revenue from operations jumped 31 per cent Quarter-on-Quarter. This uptick was partially driven by a government duty cut that made gold purchases more attractive.
Rural demand and diamond jewellery drive growth
A surge in demand from Tier-II, III, and IV cities played a pivotal role in Senco’s stellar performance, with the company reporting a 20 per cent same-store sales growth. For Q2, the jeweller saw a 31 per cent year-on-year increase in revenue, underpinned by a 7 per cent growth in gold volumes and a notable 30 per cent rise in gold value. Diamond jewellery also contributed significantly, recording a 9 per cent value growth.
Despite the high sales, Senco’s profit after tax rose modestly by 1 per cent to Rs 12.1 crore in the second quarter, with soaring gold prices limiting margin expansion.
Resilience amid record-breaking gold prices
India’s gold demand remained steadfast even as global prices reached historic highs this year. According to the World Gold Council, 2024 has seen 39 record highs for gold in dollar terms, driven by central bank purchases, robust Asian demand, geopolitical tensions, and economic uncertainties. Gold’s safe-haven appeal has strengthened amid a cooling stock market, encouraging Indian buyers to invest despite price surges.
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Wedding season and price fluctuations
However, the landscape is shifting. Following the US election results, gold prices on the Multi Commodity Exchange (MCX) have dropped by 6 per cent, falling Rs 4,750 per 10 grams since November 4. This dip has captured the attention of Indian consumers, with the upcoming wedding season—a period traditionally marked by substantial gold purchases—adding to the buzz.
Many buyers are now holding back, anticipating further price drops before committing to large purchases. Jewellers, too, are treading cautiously with restocking, wary of potential losses if prices fall further.
Industry experts predict a minor correction in gold prices, with a rebound likely in early 2025. This creates a limited window for buyers to make the most of current prices before they potentially climb again.