Senco Gold share price jumps over 8%; Emkay Global sees 24% more upside
₹509.25 apiece on the BSE Thursday. Since listing in July, Seco Gold shares have rallied more than 18%. Senco Gold shares made a strong debut on the Indian stock market exchanges on July 14 as the stock was listed with more than 35% premium at ₹431 on BSE.
Analysts believe Senco Gold shares are still trading at a steep discount to its peers and have a scope for further upside. Emkay Global Financial Services initiated coverage on Senco Gold with a ‘Buy’ rating and a target price of ₹630 per share, implying an upside of around 24% from Thursday’s high price. Senco Gold boasts of being one of the top-2 as regards revenue share in the ₹800 billion eastern market, abetted by strongest brand accessibility versus peers, in terms of product, price and penetration.
Also Read: HDFC Bank share price extends decline; stock falls over 7% this week “Growth headroom is huge, as its market share is still at a mid-single-digit in the East, and focused efforts are afoot to capitalize on non-East prospects. Better access to capital, upbeat franchisee interest and shift to organized should drive a strong revenue-led EPS CAGR of >20% for Senco in FY23-26E," Emkay Global said in a report. It believes growth would be backed by near-equal input from new stores and SSG.
Senco follows hygiene practices for sourcing/hedging gold (50% stated policy), thus reducing the commodity’s volatility risk. While Senco logs 13-14% RoE in COCO (company-owned company-operated) stores, returns in FOFO (franchisee-owned franchisee-operated) stores are much higher, on nil inventory investment. Also Read: Gujarat Gas tops Motilal Oswal's picks in City Gas Distribution space; here's why Compared to peers, Senco’s return is aligned with Kalyan’s or better than most
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