Senco Gold & Diamonds plans to reach ₹11,000 crore in revenue by FY27, backed by a store expansion drive. While revenue grew 67% in Q1 FY27, profitability faced headwinds from volatile gold prices and higher costs. The company is now balancing store additions in Tier II and III cities with efforts to manage operating margins.
Senco Gold and Diamonds has set an ambitious target to grow its revenue by over 25% in the current financial year, aiming for a range of ₹10,500 to ₹11,000 crore by FY27. This growth projection comes after a dynamic start to the fiscal year, where the company reported a 67% year-on-year jump in revenue to ₹3,056 crore for the first quarter of FY27.
Profitability Challenges Amid High Growth
While the top-line growth has been significant, investors are noting the pressure on profitability. In the same first quarter, the company’s net profit declined by 3% to ₹101 crore. This disconnect between strong sales and weaker profits is largely attributed to volatility in gold prices, which rose approximately 61% year-on-year. This price fluctuation, coupled with promotional discounting, compressed the company’s EBITDA margin to 7.0%, down from 10.1% in the corresponding quarter last year. For investors, the company's ability to protect margins while maintaining sales growth remains a key area to watch.
Expansion Strategy in Tier II and III Cities
To support its growth targets, the company is continuing to expand its retail footprint. As of June 30, 2026, the company operated 209 showrooms. The management plans to add 12 to 15 new stores throughout the remainder of FY27. The strategy focuses heavily on a franchise-led model, which helps the company expand into Tier II and III cities while keeping capital spending under control.
This franchise approach allows Senco Gold to enter smaller markets without the high upfront cost of buying real estate or carrying all the inventory risk. However, this model also requires careful inventory management to ensure consistency in product quality and customer experience across different locations.
Risks and Market Context
The jewellery retail sector is currently navigating significant challenges. High gold price volatility not only impacts inventory valuation but also changes consumer purchasing behavior. When prices spike, customers may delay purchases or shift toward lower-grammage jewellery, which can impact the average ticket size and overall profit margins. Furthermore, the company has paused its international expansion plans in West Asia due to regional instability, highlighting how geopolitical factors can affect long-term growth strategies.
As of the trading session on August 21, 2026, the company’s share price stood at ₹345.40. Looking ahead, investors are likely to monitor whether the company can normalize its operating margins, how effectively it manages its working capital with the new store additions, and whether demand remains steady despite the higher cost of gold.