KOLKATA: Jewelery retail major Senco Gold Ltd on Friday said the recent sharp rise in gold prices due to geopolitical reasons has dampened demand, and the industry's first quarter performance has taken a hit amid festive and auspicious New Year celebrations. It depends on the buying trend.
The Kolkata-based retail chain said it has taken several measures to deal with the demand situation with an emphasis on diamond studded gold jewelery and consumer-centric schemes.
However, a top company official said these cannot compensate for the 15-20 per cent decline seen in terms of volumes in March and April.
“In the last 30 days, the price of gold has increased by about 10 per cent, and in the last six months, it has become costlier by 23-25 per cent. This sharp fluctuation has affected the retail buying sentiment.Volume has declined by 15-15 percent. “20 per cent for the industry,” said Suvenkar Sen, managing director and CEO of Senco Gold.
Eid, Bengali New Year, Akshaya Tritiya and regional New Year festivals are expected to help bring demand to stores, but restrictions on movement of cash due to the election code of conduct could be a hindrance for some retailers.
Senco had reported a 23 per cent rise in its consolidated net profit to Rs 27.6 crore for the quarter ending June 2023, driven by revenue expansion of 30 per cent to Rs 1,305 crore.
However, he admitted that the market is expected to remain flat "in value terms" as gold is around Rs 70,000 per 10 grams.Sen expects a flat year-on-year sales performance for the fourth quarter ending in March 2024.
The company is in a quiet period for the results, and so Sen declined to provide more specific details.
Senco said it has launched a price guarantee scheme for six months under the Marigold scheme, which the industry offers only for one month till Aksha Tritiya, where the customer books gold and gets immunity from price rise.
The company is also giving discount in making charges during this period to increase sales. The company also has DigiGold, which allows customers to invest in gold for as low as Rs 300.Sen mentioned that the company is focusing more on diamond studded round jewelery which has either reduced the gap or the jewelery has become less expensive as they are made of 14 karat gold.
He expects diamonds including lab diamonds, which account for 11 per cent of the total revenue, to grow by at least 15 per cent in the next 2-3 years.
The company's revenue for the nine months ended December 24 was Rs 4,104 crore and net profit was Rs 148.8 crore.
The Kolkata-based retail chain said it has taken several measures to deal with the demand situation with an emphasis on diamond studded gold jewelery and consumer-centric schemes.
However, a top company official said these cannot compensate for the 15-20 per cent decline seen in terms of volumes in March and April.
“In the last 30 days, the price of gold has increased by about 10 per cent, and in the last six months, it has become costlier by 23-25 per cent. This sharp fluctuation has affected the retail buying sentiment.Volume has declined by 15-15 percent. “20 per cent for the industry,” said Suvenkar Sen, managing director and CEO of Senco Gold.
Eid, Bengali New Year, Akshaya Tritiya and regional New Year festivals are expected to help bring demand to stores, but restrictions on movement of cash due to the election code of conduct could be a hindrance for some retailers.
Senco had reported a 23 per cent rise in its consolidated net profit to Rs 27.6 crore for the quarter ending June 2023, driven by revenue expansion of 30 per cent to Rs 1,305 crore.
However, he admitted that the market is expected to remain flat "in value terms" as gold is around Rs 70,000 per 10 grams.Sen expects a flat year-on-year sales performance for the fourth quarter ending in March 2024.
The company is in a quiet period for the results, and so Sen declined to provide more specific details.
Senco said it has launched a price guarantee scheme for six months under the Marigold scheme, which the industry offers only for one month till Aksha Tritiya, where the customer books gold and gets immunity from price rise.
The company is also giving discount in making charges during this period to increase sales. The company also has DigiGold, which allows customers to invest in gold for as low as Rs 300.Sen mentioned that the company is focusing more on diamond studded round jewelery which has either reduced the gap or the jewelery has become less expensive as they are made of 14 karat gold.
He expects diamonds including lab diamonds, which account for 11 per cent of the total revenue, to grow by at least 15 per cent in the next 2-3 years.
The company's revenue for the nine months ended December 24 was Rs 4,104 crore and net profit was Rs 148.8 crore.
