ncorporated in 1994, Senco Gold is pan-India jewelry retail player with a history of more than five decades. They are the largest organized jewelry retail player in the Eastern India based on number of stores and among eastern India based jewelry retailers. They have the widest geographical footprint in non-eastern states. They primarily sell gold and diamond jewelry and also jewelry made of silver, platinum and precious and semi-precious stones and other metals. Their products are sold under the “Senco Gold & Diamonds” trade name, through multiple channels, including 70 Company Operated Showrooms and 57 Franchisee Showrooms.
The domestic gems and jewelry market is estimated at Rs 2,900 billion in fiscals 2020-21. Gold and diamond studded jewelry account for 75% share, whereas bars and coins account for 25%. Domestic jewelry demand has historically been dominated by gold. In fiscal 2021, the share of gold jewelry is estimated at 57%. Consumption of jewelry studded with diamond, pearls and other precious, semi-precious stones, has also been rising over the past five years due to changing consumer preferences, organised players and aggressive advertising campaigns. Diamond and other jewelry expanded at a CAGR of 14% over fiscals 2016-21, faster than both gold jewelry and bars and coins demand.
Strengths And Risks
+ Strong Brand Name:: The company has a strong brand name with heritage and legacy of over five decades.
+ Large Retail Network: : Senco is the largest organized jewelry retail player in the eastern region of India based on number of stores.
+ Franchisee Model: : Senco has a strong ‘Company Operated Showroom’ base complemented by an established asset-light ‘franchise’ model leading to operating leverage. They operate 70 Company Operated Showrooms and 57 Franchisee Showrooms.
+ Product Mix: : Company is focussed on light, affordable jewelry with the intention to cater to the upwardly mobile and younger generation.
+ Experienced Management: : Senco has an experienced management team and institutional investor support.
- Gold Prices:: Rising gold prices can impact demand from end consumers thus shrinking the overall market size and volumes.
- Competition: Senco : operates in highly competitive and fragmented markets, where demand is driven by market trends, pricing and customer preferences. Any loss in market share can impact business and revenues.
- Working Capital Requirements: : The company requires significant amounts of working capital. Inability to meet working capital on commercially acceptable terms, may have an adverse impact on business, financial condition and results of operations.
- Govt Regulations:: They source gold for our operations under the gold-metal loans through bullion banks on loan basis, which remains subject to RBI regulations. Any adverse change in the regulations governing gold on loan basis may adversely affect financial standing.
- Legal Cases:: Senco has been subject to a ‘search and seizure’ operation by the IT dept in the past, which has resulted in taxation and criminal proceedings being initiated against our Company and our Individual Promoter. They have also been subject to an on spot search from excise dept.
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