Senco Gold, a jewelry retailer’s consolidated profits after tax (PAT), rose by 1.6%, to Rs. 12.1 crores, in the quarter ending September 2024 – a steady improvement, although modest compared to the same quarter of the previous year, where PAT was Rs. 11.6 crores.
Operational revenue also increased significantly, up by 30.86% in the same quarter. The income generated in the same quarter of the previous fiscal year was Rs. 1,146.6 crores, compared to Rs. 1,500.5 crores this year. These impressive numbers only tell what the jewelry retailer is capable of in terms of navigating market challenges and demand. They also show the company’s dedication to catering to diverse customers, which span even rural areas and small towns, helping contribute significantly to this growth.
The growth trajectory recorded indicates the stock’s performance. On Friday, Senco Gold shares stood at Rs. 1,077.95 for one piece on the BSE, increasing by 1.71 percent.
So, what does all this mean? Let’s find out.
Analysts Bullish
Responses were not positive, as the shares plunged 4.7% to Rs. 1,078 in the week gone by, although the stock’s performance aligned with analyst predictions, earning a revenue of Rs. 15 billion and statutory of Rs. 23.98 a share. Analysts have updated their predictions and have been pretty bullish on the stock, owing to the jewelry retailer’s promising prospects.
Six analysts reviewed the situation, and according to their findings, the stock can generate Rs. 63.4 billion in revenue in 2025. If these predictions were to come true, that would only mean an 11% surge in revenue compared to the previous year. Earnings per share will also increase by 7.80% and touch Rs. 28.40. A revenue of Rs. 63.4 billion will be mostly in line with the analysts’ prediction of Rs. 63.2 billion. Estimations for the earnings per share were relatively high, at Rs. 32.60.
What this means for Investors?
Analysts increased the target price to Rs. 1,540, an 18% increase, even as they cut down on their earnings forecasts. However, this may not impact the stock’s value, at least not in the long term. According to one analyst, the most bullish value of the stock was Rs. 1,709, and the most bearish was Rs. 1,277 per share—a narrow spread that only indicates how easy it will be to value the stock.
One way to understand this analysis is to compare the stock’s performance in recent years and weigh it against industry standards. Analysts predict the stock to grow by 24% annually as 2025 approaches. These numbers align with the 23% annual growth achieved last year. The forecast also suggests that revenue will increase by 22% annually, and Senco Gold will maintain this steady growth rate.
Takeaway
There has been a decline in sentiment owing to analysts downgrading their estimations related to the earnings per share of Senco Gold. However, there haven’t been any real changes to revenue, and the company is expected to continue to maintain steady growth, which also coincides with the industry. The updated price target, though, has a different story to tell – one of the business’s intrinsic value, which, according to analysts, is bound to improve, given time.
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