Senco Gold share price jumps over 7% as Emkay Global raises target price after Q3 results; Should you buy?

livemint.com:

₹818.05 apiece on the BSE. Senco Gold reported a consolidated net profit of ₹109.32 crore for the quarter ended December 31, a rise of 5.8% from ₹103.35 crore during the corresponding quarter of the previous fiscal. The company’s revenue from operations in Q3FY24 rose 23.3% to ₹1,652.20 crore from ₹1,339.63 crore, year-on-year (YoY), led by strong 17% SSG and 11% increase in average store count.

The jewellery maker’s EBITDA during the quarter increased 11.3% to ₹181.1 crore from ₹162.7 crore, while its EBITDA margin declined to 11% from 12.1%, YoY, due to one-offs in the base and high competition, in line with peers. “We continue to focus on enhancing the GML % (presently 60%) in our total bank borrowing to reduce our blended borrowing cost which presently is about 6%. The new showroom launches of 18 so far have also led to investment in working capital out of our internal accruals, IPO funds and incremental borrowing," said Sanjay Banka, CFO, Senco Gold.

Also Read: Glenmark Pharma share price jumps over 6% after Q3 result Senco Gold Q3 results were in-line with Emkay Global Financial Services’ estimates. “Senco is seeing an accelerated shift from unorganized players, with 70% of Gold exchange sales (~33% revenue mix), and 35-40% of billing mix, coming from new buyers. Non-east expansion is also progressing well, with the North region (22 stores) running at an avg.

of ₹0.25 - 0.30 billion revenue run-rate, higher than PBT breakeven run-rate of ~ ₹0.20 billion," Emkay Global said. With over 30% valuation discount versus peers, Senco provides a strong re-rating opportunity as it delivers on our expectations (20% CAGR), the brokerage added. It maintained a ‘Buy’ rating on the stock and raised the target price to ₹900 per