Q1 2027 Senco Gold Ltd Earnings Call

August 12, 2026

Operator 2: Ladies and gentlemen, the conference will begin shortly. Please stay connected. Ladies and gentlemen, the conference will begin shortly. Please stay connected. Ladies and gentlemen, good day and welcome to Senco Gold Limited Q1 FY27 earnings call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Purohit from Elara Securities. Thank you, and over to you, sir.

Operator: Ladies and gentlemen, good day and welcome to Senco Gold Limited Q1 FY 2027 Earnings Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Purohit from Elara Securities. Thank you, and over to you, sir.

Speaker #1: As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Mr. Amit Purohit from Elara Securities. Thank you, and over to you, sir.

Speaker #2: Good morning, everyone. On behalf of Elara Securities, we welcome you all to the Q1 FY27 conference call of Senco Gold. I take this opportunity to welcome the management of Senco Gold, represented by Mr. Suvankar Sene, Managing Director and CEO. Along with him, we have Mr. Sanjay Bankerji, Group CFO and Head of Investor Relations.

Amit Purohit: Good morning, everyone. On behalf of Elara Securities, we welcome you all for the Q1 FY27 conference call of Senco Gold. I take this opportunity to welcome the management of Senco Gold, represented by Mr. Suvankar Sen, Managing Director and CEO. Along with him, Mr. Sanjay Banka, Group CFO and Head IR. We will begin the call with a brief overview by the management, followed by a Q&A session. I will now hand over the call to the management for opening remarks. Over to you, sir.

Speaker #2: We will begin the call with a brief overview by the management, followed by a Q&A session. I will now hand over the call to the management for opening remarks.

Speaker #2: Over to you, sir.

Speaker #3: Thank you, thank you very much. A very good morning to all the participants. Ladies and gentlemen, we are very pleased to inform you that, as we begin the financial year 2026–27 with a very positive mindset, we have been able to deliver a great performance in Q1, achieving record sales.

Suvankar Sen: Thank you. Thank you very much. A very good morning to all the participants. Ladies and gentlemen, we are very pleased to inform that as we begin the financial year 2026/2027 with a very positive mindset. We have been able to have a great performance in Q1, achieving record sales and crossing INR 3,000 crore on a single quarter. The momentum that we had achieved in the financial year 2025/2026 in terms of the performance continues to remain, and as a focus, as a thought process, we have always believed that the beginning of the year has to begin with a bang, as a growth-oriented company. We have tried our level best to achieve such a performance as we begin the financial year with a great quarter.

Speaker #3: And crossing ₹3,000 crores in a single quarter. In the financial year '25-'26, in terms of the performance, it continues to remain. And as a focus, as a thought process, we have always believed that the beginning of the year has to begin with the bank as a growth-oriented company.

Speaker #3: We have tried our level best to achieve such a performance as we begin the financial year with a great quarter. If you really look at it in terms of the revenue on a consolidated basis, you've seen that we've grown by almost 67%.

Suvankar Sen: If you really look at it in terms of the revenue on a consolidated basis, you've seen that we've grown by almost 67%, and it shows that there has been continued and renewed trust for the customers, for the brand. At the retail level, we've grown by more than 50%, which has been a wonderful performance, and especially we need to keep in mind that this particular quarter had great opportunities and also certain challenges that we had to overcome. Especially with almost 65% to 70% of our business coming from the Eastern India and the state of Bengal. This particular quarter, we were faced with elections, and we had to plan from the previous quarter itself to ensure that we achieve great performance for Poila Boishakh and Akshaya Tritiya.

Speaker #3: And it shows that there has been continued and renewed trust from customers for the brand at the retail level. We've grown by more than 50%, which has been a wonderful performance.

Speaker #3: And especially, we need to keep in mind that this particular quarter had great opportunities, and also certain challenges that we had to overcome.

Speaker #3: Especially with almost 65 to 70% of our business coming from Eastern India and the state of Bengal, this particular quarter we were faced with the elections, and we had to plan from the previous quarter itself to ensure that we achieve great performance for Paila Baisakh and Akshay Tritiya.

Speaker #3: And I'm happy to say, and I would like to congratulate my team, that the planning and execution which had started two to three months before the quarter began was executed and performed greatly.

Suvankar Sen: I am happy to say, and I would like to congratulate my team that the planning and the execution that had started two, three months back before the quarter had begun was greatly executed and performed. We also need to understand that in this particular quarter, there have been certain headwinds in terms of Adhik Maas. There have been headwinds in terms of the weather, the heat wave. But in spite of that, we had a wonderful month of April where we almost clocked sales of INR 1,500, 1,600 crore. In the month of May and June, we've seen that against all these headwinds, we still continued to have our sales, but the sales did fall to around INR 5,000, 6,000 crore on an average on each of the months.

Speaker #3: We also need to understand that, in this particular quarter, there have been certain headwinds in terms of Adhik Maas. There have been headwinds in terms of the weather—the heat wave.

Speaker #3: But in spite of that, we had a wonderful month of April where we almost clocked sales of ₹1,500–1,600 crore. And in the months of May and June, we've seen that against all these headwinds, we still continued to have our sales.

Speaker #3: But the sales did fall to around ₹5,600 crores on average in each of the months. However, there were certain supports in terms of the summer weddings, which were there, and we were continuously coming up with many schemes, discounts, and offers to have the customers keep coming into the store.

Suvankar Sen: However, there were certain supports in terms of the summer weddings, which were there, and we were continuously coming up with many schemes, discounts, offers to have the customers keep coming into the store. There were certain challenges in terms of footfalls, but with all our innovative schemes and attractive old gold exchange programs that we gave, I would say that it also helped a lot in terms of converting the customers' old gold into the sales of diamond jewelry, and all together, we had a wonderful quarter ahead. Now we need to see that along with the overall 50% year-on-year sales that we had in Q1, our same-store sales grew by almost 39%, which means that our existing stores continues to have strong relationships with our customers, engaging with them, and trying to make sure that with our innovative designs and new collections, we keep attracting the customers.

Speaker #3: There were certain challenges in terms of footfalls, but with all our innovative schemes and attractive old gold exchange programs that we gave, I would say that it also helped a lot in terms of converting the customers' old gold into the sales of diamond jewelry.

Speaker #3: And all together, we had a wonderful quarter ahead. Now, we need to see that along with the overall 50% year-on-year sales growth that we had in Q1, our same store sales growth grew by almost 39%. This means that our existing stores continue to have strong relationships with our customers, engaging with them and trying to make sure that with our innovative designs and new collections, we keep attracting customers.

Speaker #3: One observation that I would like to make is that, at these high gold prices compared to the last financial year, there has been a shift among customers toward lightweight, more delicate designs—jewelry that is more suited for daily wear, gifting items, and pieces that are more design-led rather than the normal, simple, standard, old-fashioned jewelry.

Suvankar Sen: One observation that I would like to make is that at these high gold prices compared to the last financial year, there has been a shift of the customers moving towards lightweight, more delicate designs, jewelry which is more for the daily wear, gifting items, and jewelry which are more design-led rather than normal, simple, standard, old-fashioned jewelry. We must mention that the diamond jewelry value we got sales increase of almost 43%, and in terms of volumes, we could grow by 18% in terms of diamond jewelry, which gives a very strong signal in terms of our design and development and the shift of the consumers and the long-term impact that these trends would have towards our margin in terms of our effort to increase the studded ratio. Another aspect is that the lower ticket-priced items were more in demand.

Speaker #3: We must mention that the diamond jewelry value saw a sales increase of almost 43%. And in terms of volumes, we could grow by 18% in diamond jewelry, which gives a very strong signal in terms of our design and development.

Speaker #3: And the shift of the consumers, and the long-term impact that these trends would have on our margin in terms of our effort to increase the stock ratio.

Speaker #3: But another aspect is that the lower ticket size items were more in demand. There was, I would say, the consumers' inclination to buy jewelry, even though all the headwinds were there.

Suvankar Sen: There was the consumer's inclination to buy jewelry against all the headwinds were there. What they really wanted is to have jewelry within their budget, and we continuously focused on analyzing the data, analyzing the consumer trends, and providing jewelry accordingly. We kept building up our 9 carat, 14 carat, lower caratage jewelry and lightweight jewelry throughout the quarter. Another aspect that we must keep in mind is the old gold exchange, which was almost 43% of the total sales quantity. On the appeal of our honorable prime minister that we must try our level best to reduce the gold imports into the country, I think that as an industry, we all stood together and we put our best efforts to ensure that we could encourage the consumers to exchange their old gold.

Speaker #3: But what they really wanted was to have jewelry within their budget. And we continuously focused on analyzing the data, analyzing the consumer trends, and providing jewelry accordingly.

Speaker #3: And we kept building up our 9-carat, 14-carat, lower-carat jewelry, and lightweight jewelry throughout the quarter. Another aspect that we must keep in mind is the old gold exchange, which was almost 43% of the total sales quantity.

Speaker #3: And on the appeal of our honorable Prime Minister that we must try our level best to reduce the gold imports into the country, I think that as an industry, we all stood together and we put our best efforts to ensure that we could encourage the consumers to exchange their old gold.

Speaker #3: And that has also been a great driver in terms of the overall numbers that we could achieve, and upgrade, and help the customers to upgrade their old jewelry.

Suvankar Sen: That has also been a great driver in terms of the overall numbers that we could achieve and help the customers to upgrade their old jewelry. We've seen that the gold price year-on-year has gone up by 61%, and on quarter-on-quarter, it has just gone up by 1%. That has been one of the overall drivers also when we see value growth in terms of sales. It has been largely led by the value of the gold going up as well. In terms of the new stores that we could add in this particular quarter, we've added three company-owned, company-operated stores. We've added four franchises and one Sennes showroom, which is focusing on lab-grown diamonds. The company remains to track and we will make sure that we open 12 to 15 more stores for the remaining of the financial year. They are very much in the pipeline.

Speaker #3: We've seen that the gold price year-on-year has gone up by 61%, and on quarter-on-quarter, it has just gone up by 1%. So that has been one of the overall drivers also when we see value growth in terms of sales.

Speaker #3: It has been largely led by the value of gold going up as well. In terms of the new stores that we could add in this particular quarter, we've added three company-operated stores.

Speaker #3: We've added four franchises and one Seness showroom, which is focusing on lab-grown diamonds. The company remains on track, and we will make sure that we open 12 to 15 more stores for the remainder of the financial year.

Speaker #3: They are very much in the pipeline. And I must also mention to all of you that, much in line with our strategy which we are working towards, the majority of the stores that we shall open will be franchisees focusing on the East and Northern Indian markets.

Suvankar Sen: I must also mention to all of you that much with our strategy that which we are working towards, the majority of the stores that we shall open shall be franchisees focusing on the east and the northern Indian markets. That is one of the strategic focus that we are continuing to do and achieve the results as well. Now looking ahead into Q2, we've seen that in all the overall financial year, Q1 is usually because of Akshaya Tritiya and New Years in various zones and the summer weddings, we have a great Q1. Q3 and Q4 are led by the festives and the weddings. So Q2 in terms of overall sales is on the lower side. However, Q2 is the particular quarter in which we do our planning, building up of the inventory so that we are gearing up well for the festive season.

Speaker #3: So that is one of the strategic focuses that we are continuing to work on and where we are achieving results as well. Now, looking ahead into Q2, we've seen that for the overall financial year, Q1 is usually strong because of Akshay Tritiya, the New Year celebrations in various zones, and the summer weddings. We have a great Q1.

Speaker #3: And Q3 and Q4 are led by the festivals and the weddings. So, Q2, in terms of overall sales, is on the lower side. However, Q2 is the particular quarter in which we do our planning and building up of inventory, so that we are gearing up well for the festive season.

Speaker #3: And another good thing that we are seeing at the market is that the way in the towards the end of May or June, we had seen the consumer footfalls of the overall sentiments on the lower side.

Suvankar Sen: Another good thing that we are seeing at the market is that the way towards the end of May or June, we had seen the consumer footfalls of the overall sentiments on the lower side. But as we move on to July and August, we are seeing a substantial improvement in terms of the consumer sentiments and the inclination of the consumer towards buying jewelry and building up for their needs and the wedding season as well. Also, one aspect is that Senco has always stood for innovation and coming up with new collections and designs. As I have mentioned before that every year we come up with more than 160,000 designs. This particular quarter and this particular year, we shall continue to come up with new designs.

Speaker #3: But as we move on to July and August, we are seeing a substantial improvement in terms of consumer sentiments and the inclination of the consumer towards buying jewelry and building up for their needs and the wedding season as well.

Speaker #3: And also, one aspect is that Senco has always stood for innovation and coming up with new collections and designs. As I've mentioned before, every year we come up with more than 150,000 designs.

Speaker #3: And this particular quarter and this particular year, we shall continue to come up with new designs. One particular thing I would like to really happily announce to all of you that along with the women-focused designs that we are coming up in lightweight jewelry, be it nine-carat where we were one of the first to launch and coming up with new collections in Everlight, very recently, we have also come up with a new design collection for men's jewelry under Aham.

Suvankar Sen: One particular thing I would like to really happily announce to all of you that along with the women-focused design that we are coming up in lightweight jewelry, be it 9 carat, where we were one of the first to launch and coming up with new collections in Everlite. Very recently, we have also come up with a new design collection for men's jewelry under Aham, which is titanium jewelry with gold and diamonds. Again, I can proudly say that much like the innovation that Senco has always been doing, we are among the first in the industry to have launched titanium jewelry.

Speaker #3: This is titanium jewelry with gold and diamonds. And again, I can proudly say that, much like the innovation that Senco has always been known for, we are among the first in the industry to have launched titanium jewelry.

Speaker #3: And the good part about it is that, while there is gold and diamonds incorporated in the jewelry, that shall lead to margins. But with the addition of titanium, overall, the jewelry prices—the range in which we are selling—starts from about ₹20,000 and is about ₹20,000 to ₹1 lakh, which is very much affordable by the consumers.

Suvankar Sen: The good part about it is that while there is gold and diamonds incorporated in the jewelry that shall lead to margins, but with the addition of titanium, overall the jewelry prices, the range in which we are selling starts from about INR 20,000 and is about INR 20,000 to INR 100,000, which is very much affordable by the consumers. One thing as our strategy, as our focus, as what we will drive for the upcoming financial year is that we will continue to prioritize on the lightweight jewelry collection. We are continuously analyzing the data, optimizing our inventory, and ensuring how we can improve our diamond jewelry sales, and the increase of our franchisee stores so that our margins are protected. We continue to be ensuring that, yes, how we can keep on improving our margins, and also to ensure that our return on capital is happening on the best optimal manner.

Speaker #3: One thing, as our strategy, as our focus, as what we will drive for the upcoming financial year, is that we'll continue to prioritize the lightweight jewelry collection.

Speaker #3: We are continuously analyzing the data, optimizing our inventory, and ensuring we can improve our diamond jewelry sales, along with the increase in our franchisee stores, so that our margins are protected.

Suvankar Sen: We are continuously analyzing the data, optimizing our inventory, and ensuring how we can improve our diamond jewelry sales, and the increase of our franchisee stores so that our margins are protected. We continue to be ensuring that, yes, how we can keep on improving our margins, and also to ensure that our return on capital is happening on the best optimal manner. We remain focused on achieving 20%+ growth in terms of value for this particular financial year, building the brand Senco across the nation so that we can reach out to more customers and open more stores and franchisees, and grow across with a geographical focus on East and Northern India with our own stores and our franchisee stores. With this, I would like to request Mr. Banka to say a few words before we start taking questions from all of you. Thank you very much.

Speaker #3: We continue to ensure that, yes, we can keep on improving our margins, and also to ensure that our return on capital is happening in the best and most optimal manner.

Suvankar Sen: We remain focused on achieving 20% plus growth in terms of value for this particular financial year, building the brand Senco across the nation so that we can reach out to more customers and open more stores and franchisees, and grow across with a geographical focus on East and Northern India with our own stores and our franchisee stores. With this, I would like to request Mr. Banka to say a few words before we start taking questions from all of you. Thank you very much.

Speaker #3: We remain focused on achieving 20%+ growth in terms of value for this particular financial year, building the Senco brand across the nation so that we can reach out to more customers and open more stores and franchisees.

Speaker #3: And grow across with a geographical focus on East and Northern India, with our own stores and our franchisee stores. So, with this, I would like to request Mr. Bankar to say a few words before we start taking questions from all of you.

Speaker #3: Thank you very much.

Speaker #2: Yes, good morning, sir. While sir has given a detailed background, we would like to clarify that the total growth is 67%, while the retail growth is 50%.

Sanjay Banka: Yes. Good morning, sir. While sir has given a detailed background, we would like to clarify that the total growth is 67%, while the retail growth is 50%. This retail growth of 50% has been observed in a secular trend across all the zones. We have seen very good growth even in the newly launched central region where we have seven stores. In Delhi NCR, we have got a good growth. Overall, we have a very good growth between own store and franchisee as well. The ASP has seen almost a 40% YOY increase from the last year, Q1. The APV has seen an increase of 38% YOY. When we look at EBITDA at 7% range, while obviously the comparison is against Q1, every quarter has its own unique characteristics, particularly in jewelry industry.

Speaker #2: And this retail growth of 50% has been observed in a circular trend across all the zones. So, we have seen very good growth even in the newly launched Central region.

Speaker #2: We have seven stores in Delhi and the NCR. We have achieved good growth, so overall, we are seeing very good growth. Between our own stores and franchisees as well, the ASP has seen almost a 40% year-over-year increase.

Speaker #2: But in the last year Q1, ATV has seen an increase of 38% year-over-year. So, when we look at EBITDA at a 7% rate—while obviously the comparison is against Q1—every quarter has its own unique characteristics, particularly in the jewelry industry.

Speaker #2: So Q1 last year was covered by price rise. And we had clarified in Q1 last year that while the real 7.1%, but look at our sustainable EBITDA between 7.5 to 7.8.

Sanjay Banka: Q1 last year was covered by a price rise, and we had clarified in Q1 last year that while the real estate 1%, look at our level EBITDA between 7.5% to 7.8%. That's what even with our Q1 results, we give the same guidance. The 7% EBITDA margin for the quarter is a very good margin which we feel at INR 213 crore. The PAT for the year is INR 101 crore consolidated. The PAT is partly lower against the standalones due to the impact of our three subsidiaries. Out of our three subsidiaries, the Taptik subsidiary, which is a Taptik powerhouse for design, Taptik powerhouse for supplying jewelry, that is doing very well and that is enabling us to launch almost 100 designs per day.

Speaker #2: And that's why, even with the Q1 results, we gave the same guidance. So, this 7% EBITDA margin for the quarter is a very good margin, which we feel.

Speaker #2: At 213 crore. And the PAT for the year is 101 crore consolidated. The PAT is partly lower compared to the standalone, due to the impact of our two or three subsidiaries.

Speaker #2: So, out of our three subsidiaries, the factory subsidiary, which is a captive powerhouse for design—a captive powerhouse for supplying jewelry—that is doing very well.

Speaker #2: And that is enabling us to launch almost 100 designs per day. However, the Senco brand, which is in the nature of a startup, is still working towards the lab-grown diamond, perfume, and leather batch.

Sanjay Banka: However, the Senis brand, which is in the nature of startup, is still working towards the lab-grown diamonds procurement and deliveries. Any new brand takes time, so this is partly impact of Senis Fashion Limited and the Dubai entity due to which the PAT is lower, but PAT is still at 3.3%. What we want to reiterate is that the quarter should be seen in larger perspective. We have already optimized our inventory with a direct improvement in the inventory days. We have already taken various actions to obtain operating leverage, and overall for the year, we continue to remain optimistic to give a guidance of 7.5% to 7.8% EBITDA level. With that, we can initiate the earning call and invite you all to ask your queries.

Speaker #2: Any new brand takes time, so this is partly why the impact of Senco has been limited. And the Dubai entity, due to which the price is lower.

Speaker #2: But that is still at 3.3%. So what we want to reiterate is that the quarter should be seen in a larger perspective. We continue, and we have already optimized our inventory.

Speaker #2: This has led to an improvement in the inventory days. We have already taken various actions to obtain operating leverage. Overall, for the year, we continue to remain optimistic and are maintaining our guidance of 7.5% to 7.8% EBITDA level.

Speaker #2: With that, we can initiate the earnings call and invite you all to ask your queries.

Speaker #3: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Operator 2: Thank you very much. This now begins the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to unmute handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Viraj Mehta from Enigma Investment. Please go ahead.

Operator: Thank you very much. This now begins the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to unmute handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Viraj Mehta from Enigma Investment. Please go ahead.

Speaker #3: If you wish to remove yourself from the question queue, you may press star and two. Participants, please use your handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Speaker #3: The first question is from the line of Veeraj Mehta from Enigma Investment. Please go ahead.

Speaker #4: Yeah. Hello, Mr. Senco and Bankar ji. Thank you so much for the update and very good performance. Sir, my first question is regarding the guidance that you gave for the year.

Viraj Mehta: Yeah. Hello, Mr. Sen and Banka Ji. Thank you so much for the update and very good performance. Sir, my first question is regarding the guidance that you gave for the year. We are still sticking with 20% growth for the year, which will mean that for the rest of the year we will not grow at all. So what am I missing here? You have had a spectacular Q1 in spite of whatever headwinds that we had. Now that Adhik Maas and election is behind us, why are we so negative for the growth for the rest of the year?

Speaker #4: We are still sticking with 20% growth for the year, which will mean that for the rest of the year, we will not grow at all.

Speaker #4: So, what am I missing here? You have had a spectacular Q1. In spite of whatever headwinds that we had, now that we are big mass and the election is behind us, why are we so negative for the growth for the rest of the year?

Speaker #2: No, I totally appreciate your question. And if you've seen our overall performance over the past two to three years, we have always been a little conservative in terms of giving the guidance.

Suvankar Sen: No, I totally appreciate your question. If you have seen our overall performance over the past 2, 3 years, we have always been a little conservative in terms of giving the guidance. Our range that we usually give to all of you is a growth of 20% to 25%. We have had a wonderful first quarter, and I am sure that this performance of Q2, Q3, Q4 will continue remain. We believe that after the end of Q3, we will be giving you any kind of revised performance. Yet, if you really look at it from a 20% plus guidance that we give you, maybe we will say 25% plus guidance.

Speaker #2: And our range that we usually give to all of you is a growth of 20–25 percent. We've had a wonderful first quarter, and I'm sure that this performance in Q2, Q3, and Q4 will continue to remain.

Speaker #2: But we believe that after the end of Quarter 3, we will be giving you any kind of revised performance. But yes, if you really look at it, from a 20% plus guidance that we give you, maybe we’ll say 25% plus guidance for the rest of the year.

Viraj Mehta: For the rest of the year.

Speaker #2: Yeah, for the rest of the year. And whatever it averages out to, you're totally logical in saying whatever you are saying. But for the whole year, from last year's performance of ₹8,400 crore, we can comfortably say that we should be crossing ₹10,000 crore for sure.

Suvankar Sen: Yeah, for the rest of the year and whatever it averages out. You are totally logically saying whatever you are saying. For the whole year, from last year's performance of INR 8,400 crores, we can comfortably say that we should be crossing INR 10,000 crores for sure. Our internal team endeavor is to have higher numbers as well. This is just something that you please appreciate that we will be conservatively guiding, and as the year ends, we will keep updating you with our performance.

Speaker #2: And our internal team endeavor is to have higher numbers as well. So this is just something that we kindly ask you to appreciate—that we'll be conservatively guiding.

Speaker #2: And as the year ends, we will keep updating you on our performance.

Speaker #4: Sure. And sir, you said April was a spectacular month. But obviously, in May and June, because of various reasons—plus also a little global uncertainty and the Prime Minister also being a little conservative on gold—we saw a decline in sales in both May and June.

Viraj Mehta: Sure. Sir, you said April, we had a spectacular month, but obviously May and June, because of various reasons, plus also little global uncertainties and Prime Minister also being a little conservative on gold, we saw a decline in sales both in May and June. But you said that July and August were very good in terms of footfalls. I am not asking for an absolute number, but have we gone back from 500 a month or 600, 700 a month to close to 800,000 a month in July, August, or at least July?

Speaker #4: Can you give us—because you said that July and August were very good in terms of footfalls—so just, I’m not asking for an absolute number.

Speaker #4: But have we gone back from 500 a month, or 600, 700 a month, to close to 800,000 a month in July, August? Or at least July?

Speaker #2: So I would say that, as a breakup of the quarterly numbers of Q1, we had almost 55% of the contribution of the total quarter coming in the month of April.

Suvankar Sen: I would say that as a breakup of the quarterly numbers of Q1, we had almost 55% of the contribution of the total quarter coming in month of April, and the remaining 45% coming in the month of May and June. That is how the overall quarter looked like. I would say that from the month of July, we are seeing that July, the footfalls were there, the consumer sentiments improved. So compared to June, we have seen a stronger traction in July and August. But again, I would say from July, August, we are up by 8% to 10% right now, and this will continue to be in this trend. Again, the buildup would again happen greatly in the month of October and November. That is how the seasonal trend looks like.

Speaker #2: And the remaining 45% came in the months of May and June. So that is how the overall quarter looked. I would say that from the month of July, we are seeing that the footfalls were there.

Speaker #2: Consumer sentiments have improved. Compared to June, we've seen stronger traction in July and August. I would say that from July to August, we are up by 8% to 10% right now.

Speaker #2: And this will continue to be in this trend. And again, the buildup would happen greatly in the months of October and November. That's how the seasonal trend looks like.

Speaker #4: So July, just to be sure, July you're saying 8 to 10 percent growth over last year's July?

Viraj Mehta: July, just to be sure, July, you are seeing 8% to 10% growth over last year's July.

Suvankar Sen: No. Last year's July, no. I am talking about July having an 8% to 10% growth over May, June. Just to update you guys on compared to where we stand previous to last year, we are about 25% growth or so. This is something that

Speaker #2: No, last year's July—no. I'm talking about July having an 8 to 10 percent growth over May, June. Just to update you guys, compared to where we stood previous to last year, we are at about 25% growth or so.

Speaker #2: So this is something that.

Speaker #4: Okay. So July was still 25% growth. Okay. Okay. And sir, as far as—so, and please break this up for me, Bankar ji. Last year, when we did a 10% margin, I'm assuming a reasonable portion also came from inventory gains in Q1 of last year.

Viraj Mehta: Okay. July was still 25% growth. Okay. Sir, please break this up for me, Banka Ji. Last year when we did 10% margin, I am assuming a reasonable portion also came from inventory gains in Q1 of last year. If I have to think about just operational, and this quarter, obviously, there was no inventory gain because the price QOQ was like 1%, so it does not really matter. If I have to think about operational profit, would it be fair to say that probably INR 70 crore to INR 75 crore of PAT last year is now INR 100 crore of profit, which purely came from operations YOY?

Speaker #4: So, if I have to think about just operational and this quarter, obviously there was no inventory gain because the price QOQ was like 1%.

Speaker #4: So it doesn’t really matter. So, if I have to think about operational profit, would it be fair to say that probably ₹70–75 crore of PAT last year is now ₹100 crore of profit, which purely came from operations?

Speaker #4: Why or why?

Speaker #2: Yes, exactly. So, if you see the earnings call last year, we said that at least 1.5% to 2% can be ascribed to the inventory gains.

Sanjay Banka: Yes, exactly. If you see the earning call last year, we said that at least 1.5% to 2% can be ascribed to the inventory gain.

Speaker #4: Absolutely.

Viraj Mehta: Absolutely.

Speaker #2: So from that perspective, while we are not able to declare registered EBITDA inside every quarter, we can very comfortably assume that the registered PAT for last year's Q1 was around ₹70–75 crore.

Sanjay Banka: From that perspective, while we are not able to declare adjusted EBITDA inside every quarter, we can very comfortably assume that the adjusted PAT for last year's Q1 was around INR 70 crore to INR 75 crore, and INR 100 crore for this quarter should be seen from this perspective. While this PAT is 7%, once again, the adjusted PAT has to be computed and there are certain factors. Sorry, the reported EBITDA is 7%, but adjusted EBITDA will be a factor of the hedging factor, the discounting, and other competitive factors, custom duty gain as well. That is how we have to see. Effectively, we should look at 7.5% to 7.8% as a sustainable EBITDA, and it will accrue over two to three quarters normalized.

Speaker #2: And ₹100 crore for this quarter should be seen from this perspective. So, while this PAT is 7%, once again, this reported PAT has to be computed.

Speaker #2: And there are certain factors—sorry. The EBITDA, reported EBITDA, is 7%. But the registered EBITDA will be a factor of the hedging factor, the discounting, and other competitive factors; customs duty gain as well.

Speaker #2: So that's how we have to see it. So, effectively, we should look at 7.5 to 7.8 as a sustainable EBITDA, which will accrue over two to three quarters, normalized.

Speaker #4: Right. And so, just last thing on margins is: when you say seven and a half, but in one of your leanest quarters, you have done 7%?

Viraj Mehta: Right. Just last thing on margins is when you say 7.5%, but in one of your leanest quarters, you have done 7%. Obviously, December quarter is going to be double digit, just operationally EBITDA margin. On top line also you are conservative, on margins also you are conservative. Something is not adding up, right? Because with such sales growth, your cost is not going up in the same region. Shouldn't your margins be higher?

Speaker #4: Obviously, December quarter is going to be double digit. Just operationally, EBITDA margin. So why are you, like, on top line also, you're conservative; on margins also, you're conservative.

Speaker #4: I mean, something is not adding up, right? Because with such sales growth, your costs are not going up in the same region. Shouldn't your margins be higher?

Speaker #2: See, as MD sir just said, we are usually conservative in giving our guidance. This is the first quarter, and even last year, the same trend was observed.

Sanjay Banka: See, sir, as MD sir has just said, we are usually conservative in giving our guidance, especially Q1, and even last year the same trend was observed. We were giving a lower guidance, but actually top line as well as bottom line was higher. You see, this is beginning of the year, and since we have done a detailed planning, we look at sustainable EBITDA margin of 7.5% to 7.8% only. If anything more happens, it will be partly due to the other dynamics. So price discounting, improvement in stock ratio. But sustainable, let's look at 7.5% to 7.8% only.

Speaker #2: We were giving a lower guidance, but the actual top line, as well as bottom line, was higher. So, see, this is the beginning of the year.

Speaker #2: And since we have done detailed planning, we will look at a sustainable EBITDA margin of 7.5% to 7.8% only. And if anything more happens, it will be partly due to other dynamics.

Speaker #2: So, price rise, discounting, improvement in spread ratio. But for sustainability, let's look at 7.5 to 7.8 only.

Speaker #4: Right. Sir, thank you. Thank you so much.

Viraj Mehta: Right. Sir, thank you so much.

Speaker #1: Thank you. The next question. On the line of which is from ND Globe Group. Please go ahead.

Operator 2: Thank you. The next question on the line of Abhijit from Axis Stockbroking. Please go ahead.

Operator: Thank you. The next question on the line of Abhijeet from Antique Stock Broking. Please go ahead.

Speaker #3: Yeah. Hi, sir. Thanks for the opportunity. Sir, my first question is on your other income. Essentially, it has been in the region of ₹123–124 crore.

Abhijit: Yeah, hi, sir. Thanks for the opportunity. Sir, my first question was on your other expense. Essentially, it has been in the region of INR 123 crore, INR 124 crore generally, and it has suddenly gone up to INR 229 crore. If I have to just take the other expense normal run rate, then you could have achieved a far higher margin. I can understand the gross margin impacted by the decrease in stock in trade, the decrease in inventory, that has an impact. But when I look at your overall margins, this has made a big difference. So what is the reason behind it?

Abhijeet Kundu: Yeah, hi, sir. Thanks for the opportunity. Sir, my first question was on your other expense. Essentially, it has been in the region of INR 123 crore, INR 124 crore generally, and it has suddenly gone up to INR 229 crore. If I have to just take the other expense normal run rate, then you could have achieved a far higher margin. I can understand the gross margin impacted by the decrease in stock in trade, the decrease in inventory, that has an impact. But when I look at your overall margins, this has made a big difference. So what is the reason behind it?

Speaker #3: Generally, and it has suddenly gone up to ₹229 crores. Why has that happened? And if I just take the other expenses at the normal run rate, then you could have achieved a far higher margin.

Speaker #3: I mean, I can understand a gross margin impacted by the, I mean, the decrease in stock-in-trade—I mean, the decrease in inventory. That has an impact.

Speaker #3: But when I look at your overall margins, this has made a big difference. So, what is the reason behind that?

Speaker #2: So thank you. Thank you very much for the question. So, in terms of other expenses, I would attribute it to the effort that we have put in towards increasing our business.

Suvankar Sen: Thank you very much for the question. In terms of other expenses, I would attribute it towards the effort that we have put in terms of increasing our businesses. There could be marketing related expenses. There are a lot of expenses in terms of renovation of our stores that we did because it was a lean season. There are also certain efforts we have done in terms of our customer offers and schemes. Because of that effort, there are certain expenses that have been booked to mitigate certain risks. I would say that, yes, in terms of your other expenses, it has looked higher, and if we could control it more, then our margins would look much better.

Speaker #2: So there could be marketing-related expenses. There are a lot of expenses in terms of renovation of our stores that we did because it was a lean season.

Speaker #2: And there are also certain efforts we've undertaken in terms of our customer offers and schemes. Because of those efforts, there are certain expenses that have been booked to mitigate specific risks.

Suvankar Sen: Because of that effort, there are certain expenses that have been booked to mitigate certain risks. I would say that, yes, in terms of your other expenses, it has looked higher, and if we could control it more, then our margins would look much better. Again, I would say that let us look at the whole year, and I am sure that these kind of other expenses will not be happening every quarter, and that would be one of the reasons why our margins would also look better as the year progresses.

Speaker #2: So I would say that, yes, in terms, it has looked higher. And if we could control it more, then our margins would look much better.

Speaker #2: But again, I would say that let us look at the whole year. And I'm sure that these kinds of other expenses will not be happening every quarter.

Suvankar Sen: Again, I would say that let us look at the whole year, and I am sure that these kind of other expenses will not be happening every quarter, and that would be one of the reasons why our margins would also look better as the year progresses.

Speaker #2: And that would be one of the reasons why our margins would also look better as the year progresses.

Speaker #3: So okay. So we should not take this kind of other expenses because I will also looking at your marketing expenditure from the PPT. It has not seen a it has seen a growth, but the main driver has been other I mean, all the other expenditure.

Abhijit: Okay. We should not take this kind of because I was also looking at your marketing expenditure from the PPT. It has seen a growth, but the main driver has been all the other expenditure, ex the marketing expenditure. We should see a subsiding. It was more particular to the quarter, and going ahead, we should see other expenditure subside or normalize. Is that what the reading

Abhijeet Kundu: Okay. We should not take this kind of because I was also looking at your marketing expenditure from the PPT. It has seen a growth, but the main driver has been all the other expenditure, ex the marketing expenditure. We should see a subsiding. It was more particular to the quarter, and going ahead, we should see other expenditure subside or normalize. Is that what the reading

Speaker #3: ...the marketing expenditure. So, we should see it subsiding—I mean, it was more particular to the quarter. And going ahead, we should see other expenditure subside or normalize.

Speaker #3: Is that what the reason?

Suvankar Sen: Then to update, like the way for our men's jewellery brand, we have had one of our brand ambassador, and then we have launched a new collection. We have taken new brand ambassadors, spending money to build attraction and attract the new generation customers. Similarly, for the youth-oriented and young generation everyday wear jewellery, we will continue to have those kind of efforts to have more younger consumer segments coming to our store.

Speaker #2: And again, to update on the way for our men's jewelry brands, we've had one of our brand ambassadors, and then we have launched a new collection.

Speaker #2: We've taken on new brand ambassadors, spending money to build traction and attract the next-generation customer. Similarly, for youth-oriented and young generation everyday wear jewelry, we will continue to have those kinds of efforts to bring more younger consumer segments into our store.

Speaker #3: So, yeah. So my question is whether this other expenditure, 'X', of the marketing cost—because marketing cost, when I see the PPT, has declined by 19%.

Abhijit: So my question is that whether this other expenditure, ex of the marketing cost, because marketing cost, when I see the PPT, it has declined by 19%. Whereas from about INR 43 crores, it has come down to INR 35 crores roughly. Here it has grown from INR 80 crores to INR 195 crores. So would this run rate continue or would this have subside? It would be more about the quarter.

Abhijeet Kundu: So my question is that whether this other expenditure, ex of the marketing cost, because marketing cost, when I see the PPT, it has declined by 19%. Whereas from about INR 43 crores, it has come down to INR 35 crores roughly. Here it has grown from INR 80 crores to INR 195 crores. So would this run rate continue or would this have subside? It would be more about the quarter.

Speaker #3: Whereas, from about ₹43 crores, it has come down to ₹35 crores. Here, it has grown from ₹80 crores to ₹195 crores. So, would this run rate continue, or would this subside, right?

Speaker #3: It would be more about the quarter.

Speaker #2: Correct. Correct. Exactly. So, this kind of run rate would not continue, and it would be subsiding in the upcoming quarters.

Suvankar Sen: Correct. Exactly. So this kind of a run rate would not continue, and it would be subsiding in the upcoming quarters.

Speaker #3: Okay. My second question was on the finance cost, where there was a lack of availability of GML, and then that led to the increase in cost.

Abhijit: Okay. My second question was on the finance cost, where there was a lack of availability of GML, and then that led to the increase in cost. So what was the reason for the lack of availability of GML and what is the scenario currently?

Abhijeet Kundu: Okay. My second question was on the finance cost, where there was a lack of availability of GML, and then that led to the increase in cost. So what was the reason for the lack of availability of GML and what is the scenario currently?

Speaker #3: So, what is—I mean, what was the reason for the lack of availability of GML? And what is the scenario currently?

Speaker #2: No. So, if you remember, during the months of March and April, when there were certain issues—which we also discussed during that particular quarter's calls—the banks were not able to provide, and the gold imports were stuck.

Suvankar Sen: So if you remember during the month of March and April, when there were certain issues, which we also discussed during that particular quarter calls, that banks were not being able to provide with the gold imports was stuck. There were a lot of discussions happening around that. There was a panic because it was anyway the season was peak season, and we would have Akshaya Tritiya sales around, and we need to make sure that the raw materials were available. So that was a situation that happened during the month of April. With the duty changes that were supposed to happen, there was a lot of uncertainty from the bank side also, all triggered by the fact that this geopolitical scenario was leading to any kind of effort towards reducing import of gold into the country.

Speaker #2: And there were a lot of discussions happening around that, and there was a panic, because anyway, the season was the peak season, and we would have Akshaya Tritiya sales around.

Speaker #2: And we needed to make sure that the raw materials were available. So, that was a situation that happened during the month of April. And with the duty changes that were supposed to happen, there was a lot of uncertainty from the bank side also.

Speaker #2: All triggered by the fact that this geopolitical scenario was leading to any kind of effort towards reducing import of gold into the country. So, that was the reason why the gold metal loan was not as freely available during those first two months.

Suvankar Sen: So that was the reason why the gold metal loan was not as freely available during those first 2 months, and we had to depend on procuring gold from the local markets. And in order to mitigate that risk, we had to reduce the metal gold loan at that point of time. And now that things are stabilizing, I think we are all praying that the geopolitical uncertainty and whatever rift is happening moves towards a solution. And with the crude oil price coming down, hopefully the pressure on the economy will also come down, and importing gold shall not be such a big problem for our nation at that point of time.

Speaker #2: And we had to depend on procuring gold from the local markets. And in order to mitigate that risk, we had to reduce the metal gold loan at that point of time.

Speaker #2: And now that things are stabilizing, I think we're all praying that the geopolitical happenings move toward a solution. And with the crude oil price coming down, hopefully the pressure on the economy will also come down.

Speaker #2: And importing gold shall not be such a big problem for our nation at that point in time.

Speaker #3: Okay. So now.

Abhijit: Okay. So now

Abhijeet Kundu: Okay. So now

Suvankar Sen: Sorry. So now it is much easier available, and we will start building up the metal gold loan portfolio once again.

Speaker #1: Sorry to interrupt.

Speaker #2: So now it is much more easily available, and we will start building up the metal gold loan portfolio once again.

Speaker #3: That's it from us.

Abhijit: That is it for me.

Abhijeet Kundu: That is it for me.

Speaker #2: That's it from us. Thank you.

Suvankar Sen: Thank you.

Speaker #1: Thank you. Ladies and gentlemen, to ensure that every participant gets an opportunity, please restrict your questions to two per participant. The next question is on the line of Sora Vaidya from Saniksha Capital.

Operator 2: Thank you. Ladies and gentlemen, to ensure that every participant gets an opportunity, please restrict your questions to two per participant. The next question is from the line of Saurabh Vedia from Sameeksha Capital. Please go ahead.

Operator: Thank you. Ladies and gentlemen, to ensure that every participant gets an opportunity, please restrict your questions to two per participant. The next question is from the line of Saurabh Beria from Sameeksha Capital. Please go ahead.

Speaker #1: Please go ahead.

Saurabh Vedia: Hi. Thanks for the opportunity. Am I audible?

Saurabh Beria: Hi. Thanks for the opportunity. Am I audible?

Speaker #2: Hi, thanks for the opportunity. Am I auditing?

Speaker #1: Yes, you are auditing.

Operator 2: Yes, you are audible.

Operator: Yes, you are audible.

Speaker #2: Yeah, so two questions. The first one is: What is the current hedging ratio? Second one, on the inventory side, have the supply chain issues been resolved?

Saurabh Vedia: Yeah. So two questions. The first one is, what is the current hedging ratio? Second one on the inventory side, have the supply chain issues been resolved, and what is the current inventory position and also the weighted average cost of that inventory?

Saurabh Beria: Yeah. So two questions. The first one is, what is the current hedging ratio? Second one on the inventory side, have the supply chain issues been resolved, and what is the current inventory position and also the weighted average cost of that inventory?

Speaker #2: And what is the current inventory position? And also the weighted asset price of that inventory? Yeah. See, so what we have explained is that while the supply chain issue was for GML unavailability, gold was available.

Suvankar Sen: Yeah. What we explained that while the supply chain issue was for GML unavailability, gold was available. Let's say, if you look at the old gold was available from the customers, while it is 43% blended for owned and franchised store. From the owned store, it was more than around 55%. Then we buy readymade jewelry, credit jewelry, that around 20%. Balance either we take from GML or from the bullion vendors.

Speaker #2: So, let's say, if you look at the old gold that was available from the customers, it is 43% blended for own and franchisee stores.

Speaker #2: From our own stores, it was more than around 55%. And then we buy readymade jewelry, traded jewelry—that is around 20% value. Either we take from GML or from the bullion vendors.

Speaker #2: So it's only a matter of how we function with the finance cost. But that unavailability was not a concern as far as availability is concerned.

Sanjay Banka: No, it's only a matter of it should be function of the finance cost, but that unavailability was not a concern as far as availability is concerned. We have been looking at our inventory base and inventory turnover versus the peer in the industry, and it's really an opportunity for us to improve. We have implemented a gold risk-based software, which we are evaluating the store performance. Based upon that performance of store one by one, we have reduced the inventory, in terms of kg and value both, and that's how it has led to improvement in the inventory days. We will continue to improve the inventory efficiency in line with the industry benchmarks.

Speaker #2: So we have been looking at our inventory base and inventory turnover. What says the peer in the industry, and it's really an opportunity for us to improve. We have implemented a gold risk-based software, which we are evaluating for store performance.

Speaker #2: And based on the performance of each store, one by one, we have reduced the inventory in terms of both kilograms and value. That is how it has led to an improvement in the inventory base.

Speaker #2: And we will continue to improve inventory efficiency in line with the industry benchmarks.

Speaker #3: And what is the current ratio? I might have missed that part.

Saurabh Vedia: What is the current ratio? Maybe I might have missed on that part.

Saurabh Beria: What is the current ratio? Maybe I might have missed on that part.

Speaker #2: Currently, it is coming to around 152 days. I think that it's stated in the written person as well—152. We'll continue to improve it further.

Sanjay Banka: Currently, it is coming to around 152 days. I think that is stated in the presentation as well.

Saurabh Vedia: So 152.

Saurabh Beria: So 152.

Sanjay Banka: We will continue to improve it further.

Speaker #3: Perfect. And how has the demand for this been so far? Also, nothing from why is retail and reported sales diverted by 19%?

Saurabh Vedia: Perfect. How has been the demand in the quarter so far? Also another part, why is retail and reported sales diverged by 19%?

Saurabh Beria: Perfect. How has been the demand in the quarter so far? Also another part, why is retail and reported sales diverged by 19%?

Speaker #2: Only can you repeat?

Sanjay Banka: Can you repeat?

Speaker #3: Yeah. First was on the demand, and the demand in the context of— and another key question: Why did retail and reported sales diverge by 19%?

Saurabh Vedia: First was on the demand in the quarter so far. The other question, why is retail and reported sales diverged by 19%?

Saurabh Beria: First was on the demand in the quarter so far. The other question, why is retail and reported sales diverged by 19%?

Sanjay Banka: Reported. Sorry. Somehow, is it our connection? If someone can please clarify what was the question, we could be.

Speaker #2: Sorry, reported. Sorry, how is it? Our connection—if someone can please clarify what was the question? Because it was clearly audible, sir.

Saurabh Vedia: It was clearly audible, sir. Am I audible now?

Saurabh Beria: It was clearly audible, sir. Am I audible now?

Speaker #3: Am I audible now?

Speaker #2: Yes, yes.

Sanjay Banka: Yes.

Speaker #3: So first, on the part of how has the demand been in the quarter so far? And secondly, a bookkeeping question: Why did the retail and the reported sales diverge by 19%?

Saurabh Vedia: First is on the part of how has been the demand in the quarter so far, and secondly, bookkeeping question it is.

Saurabh Beria: First is on the part of how has been the demand in the quarter so far, and secondly, bookkeeping question it is.

Sanjay Banka: Okay.

Saurabh Vedia: Why there is a retail and reported sales diverged by 19%?

Saurabh Beria: Why there is a retail and reported sales diverged by 19%?

Speaker #2: Some reported sales or something, 19%. So, I think you are talking about the business update, right? So, if you are referring to the business update, there I think we have reported 62.

Sanjay Banka: From reported sales or something, 19%.

Saurabh Vedia: Repeat.

Saurabh Beria: Repeat.

Sanjay Banka: I think you are talking about the business update, right?

Saurabh Vedia: Yeah.

Saurabh Beria: Yeah.

Sanjay Banka: So if you are referring to business update, there I think we have reported 62 and actually 67. As we have said, when we do the reporting, we are slightly conservative in reporting the number. That is why. At that point of time, certain adjustments are pending. The sales right to return, all the accounting adjustments are pending. That is how there is a gap between reported of business update of 62 versus 67 of now. These are the present numbers are interim numbers. What we give in the business update is the closure number. That can always vary upward or downward slightly.

Sanjay Banka: If you are referring to business update, there I think we have reported 62 and actually 67. As we have said, when we do the reporting, we are slightly conservative in reporting the number. That is why. At that point of time, certain adjustments are pending. The sales right to return, all the accounting adjustments are pending. That is how there is a gap between reported of business update of 62 versus 67 of now. These are the present numbers are interim numbers. What we give in the business update is the closure number. That can always vary upward or downward slightly.

Speaker #2: And it's only 67. So, as you have said, when we do the reporting, we are slightly conservative in reporting the number. That's why. And at that point in time, certain adjustments are pending.

Speaker #2: The sales right to return, all the accounting adjustments are pending. So that's how the gap between the reported business update of $62 million versus $67 million now.

Speaker #2: We are at present, numbers are limited to review numbers. So, what we give in the business upload update is the closure number. That can always vary.

Speaker #2: Upward or downward slightly.

Speaker #3: Right. And to add to your current quarter's performance.

Saurabh Vedia: Right. To add to your current quarter's performance.

Saurabh Beria: Right. To add to your current quarter's performance.

Speaker #1: Sorry to interrupt, Sorab. We have joined the queue for follow-up questions.

Operator 2: Sorry to interrupt, Saurabh.

Operator: Sorry to interrupt, Saurabh.

Saurabh Vedia: Okay.

Saurabh Beria: Okay.

Operator 2: Re-join the queue for follow-up questions.

Operator: Re-join the queue for follow-up questions.

Speaker #2: Yes, and your current quarter's performance is about 25% growth year-on-year. So that was the answer to your other question.

Sanjay Banka: Yeah. Your current performance is about 25% growth year-on-year. That was the answer to your other question.

Speaker #1: Thank you. The next question is from the line of Kirsh from Edna Investments. Please go ahead.

Operator 2: Thank you. The next question is from the line of Kiarsh from Edna Investment. Please go ahead.

Operator: Thank you. The next question is from the line of Yash Oswal from Yadnya Investment. Please go ahead.

Speaker #3: Hi. Thank you for the opportunity. Am I audible?

Kiarsh: Hi. Thank you for the opportunity. Am I audible?

Yash Oswal: Hi. Thank you for the opportunity. Am I audible?

Speaker #1: Yes.

Operator 2: Yes.

Operator: Yes.

Speaker #3: Yeah, so my question was regarding the operational aspect. When the management guides for a 7.5% to 7.8% EBITDA margin and around a 4% PAT margin,

Kiarsh: My question was regarding the operational thing. When the management, when you guide for 7.5% to 7.8% EBITDA margins and around 4% of PAT margin, is the hedging part also included or only the operational margins will be those?

Yash Oswal: My question was regarding the operational thing. When the management, when you guide for 7.5% to 7.8% EBITDA margins and around 4% of PAT margin, is the hedging part also included or only the operational margins will be those?

Speaker #3: So, like, is the hedging part also included, or should it be only the operational margin?

Speaker #2: So, 7.5 to 7.8 assumes a perfect situation—that there is no gold price rise, there is no gold price fall, and everything is properly hedged, right?

Sanjay Banka: So 7.5% to 7.8% assumes a perfect situation that there is no gold price rise, there is no gold price fall, and everything is properly hedged. Right? So it is assumed that there is no price rise or price fall and everything is perfect. So depending upon the percentage of hedging, 50% or 80% or 100%, the results can slightly vary. And that is exactly our intent, that based upon our present hedging level, how can we ensure and deliver 7.5% to 7.8% to you. We have delivered that in the past also.

Speaker #2: So it's assumed that there is no price rise or price fall, and everything is perfect. So now, depending upon the percentage of hedging—50, 80, or 100—the reverse can slightly vary.

Speaker #2: And that's exactly our intent. Based on our present hedging level, how can we ensure and deliver 7.5 to 7.8 to you?

Speaker #2: We have delivered that in the past as well.

Speaker #3: So, 7.5 to 7.8 will be only operational, right?

Kiarsh: So 7.5% to 7.8% will be only operational, right?

Yash Oswal: So 7.5% to 7.8% will be only operational, right?

Speaker #2: Only operational. Correct. Absolutely.

Sanjay Banka: Only operational. Correct. Absolutely.

Speaker #3: Okay. Second was on the inventory hedging only. Like, how do you decide what levels of hedging you will do for the quarter? Because, you know, the margins have been quite wide, right?

Kiarsh: Okay. Second was on the inventory hedging only. How do you decide what levels of hedging will you do for the quarter? Because the margins has been quite wide, right? It was 10% for the Q1 FY26. It has come down to 7%. So what factors do you consider for this hedging?

Yash Oswal: Okay. Second was on the inventory hedging only. How do you decide what levels of hedging will you do for the quarter? Because the margins has been quite wide, right? It was 10% for the Q1 FY26. It has come down to 7%. So what factors do you consider for this hedging?

Speaker #3: It was 10% for Q1 FY26. It has come down to 7%. So, what factors do you consider for this hedging?

Speaker #2: No. So we've been talking about our, you know, hedging strategy, and we have been guided by the board policy. So we are keeping our hedging percentage at approximately 50%.

Sanjay Banka: Well, we have been talking about our hedging strategy, and we have been guided by the board policy. Well, we are keeping our hedging percentage on approximately 50% because we have seen in the last financial year that there has been extreme volatility, and we said that we need to manage the risk of liquidity and the price movement. For now, till the gold prices really stabilize to a certain extent, we have been doing our hedging for approximately 50%. That has been the thought process. And we would like to maintain and gradually with more stability, take it upwards, but for now, the hedging percentage should be around 50%.

Speaker #2: Because we have seen in the last financial year that there has been extreme volatility, we said that we need to manage the risk of liquidity and price movement.

Speaker #2: So for now, till the gold price is really stabilized to a certain extent, we have been doing our hedging for approximately 50%. So that's been the thought process.

Speaker #2: And we would like to maintain it and gradually, with more stability, take it upwards. But for now, the hedging percentage should be around 50%.

Speaker #3: Okay. Just one last question.

Kiarsh: Okay. Just one last one.

Yash Oswal: Okay. Just one last one.

Speaker #1: Sorry to interrupt. Yes, please rejoin the queue for follow-up questions. Ladies and gentlemen, please restrict your questions to two per participant. The next question is from the line of Amish from Novice.

Operator 2: Sorry to interrupt, Yash. Please rejoin the queue for follow-up questions. Ladies and gentlemen, anyone, please restrict your question to two per participant. The next question is from the line of Amish from Novae. Please go ahead.

Operator: Sorry to interrupt, Yash. Please rejoin the queue for follow-up questions. Ladies and gentlemen, anyone, please restrict your question to two per participant. The next question is from the line of Amish from Novae. Please go ahead.

Speaker #1: Please go ahead.

Speaker #3: Yeah. Hi, sir. Congrats on a good operation. Sir, I just also wanted to understand—you know, May, April was very good, and May and June were a little softer.

Amish: Yeah. Hi, sir. Congrats on a road operations from Novae. Sir, I just also wanted to understand, April was very good and May and June was little softer. The question, sir, is that and our operating margin has come down to 7%, sir. The question, sir, is, one, there was this increase in customs duty, which also resulted in some inventory gain and losses. If you can explain us the hedging part of the-

Abneesh Roy: Yeah. Hi, sir. Congrats on a road operations from Novae. Sir, I just also wanted to understand, April was very good and May and June was little softer. The question, sir, is that and our operating margin has come down to 7%, sir. The question, sir, is, one, there was this increase in customs duty, which also resulted in some inventory gain and losses. If you can explain us the hedging part of the-

Speaker #3: The question, sir, is that our operating margin has come down to 7%. The question, sir, is, one, you know, there was this increase in customs duty, which also resulted in some inventory gain and losses.

Speaker #3: So if you can explain to us, you know, the hedging part of the—you know, hello.

Operator 2: Uh-

Amish: Hello?

Abneesh Roy: Hello?

Speaker #1: Just a second. The management line got disconnected. Please stay connected while we reconnect.

Operator 2: Just a second. The management line got disconnected. Please stay connected while we reconnect.

Operator: Just a second. The management line got disconnected. Please stay connected while we reconnect.

Speaker #3: Sure.

Amish: Sure.

Abneesh Roy: Sure.

Speaker #1: Ladies and gentlemen, the management is disconnected. Amish, please go ahead.

Operator 2: Ladies and gentlemen, the management is connected. Amish, please go ahead.

Operator: Ladies and gentlemen, the management is connected. Abneesh, please go ahead.

Speaker #3: Okay. Yeah, sorry. Sir, I'll quickly repeat my question. Sir, what we have seen is, you know, April was very good and then, you know, May and June were softer.

Amish: Yeah. Sorry. Sir, I'll quickly repeat my question. What we have seen is April was very good and then May and June was softer. The question, sir, is, one, we had built quite a bit of inventory ahead of the quarter. How have we used the inventory and how have we used the hedging part of the overall gold sales because of which this 7% EBITDA margins have come. How much of it, if at all, is there an inventory loss that we have had because there was a customs duty increase, whether we were able to gain out of this or kind of lose it? There's a reference in the presentation or a press release that we will get the benefit of increased customs duty over our Q3.

Abneesh Roy: Yeah. Sorry. Sir, I'll quickly repeat my question. What we have seen is April was very good and then May and June was softer. The question, sir, is, one, we had built quite a bit of inventory ahead of the quarter. How have we used the inventory and how have we used the hedging part of the overall gold sales because of which this 7% EBITDA margins have come.

Speaker #3: The question, sir, is: One, we had built quite a bit of inventory, you know, ahead of the quarter. So, one, how have we used the inventory?

Speaker #3: And how have we used the hedging part of, you know, the overall gold sales? Because of which, you know, these 7% EBITDA margins have come.

Speaker #3: Do you know how much of it, if at all, is there an inventory loss that we have had? Because there was a customs duty increase, whether you know, we were able to gain out of this or you know, kind of lose it.

Abneesh Roy: How much of it, if at all, is there an inventory loss that we have had because there was a customs duty increase, whether we were able to gain out of this or kind of lose it? There's a reference in the presentation or a press release that we will get the benefit of increased customs duty over our Q3. If you can give us some flavor of this 7% margin, is it despite the losses and/or hedges and the price volatility?

Speaker #3: There's a reference in the presentation or a press release that we will get the benefit of increased customs duty over Q3. So if you can give us some flavor of, you know, this 7% margin—is it despite the losses and/or hedges and, you know, the price volatility?

Amish: If you can give us some flavor of this 7% margin, is it despite the losses and/or hedges and the price volatility?

Speaker #2: So first of all, you know, what we would like to clarify is that the buildup of the inventory that we did for the business of, you know, Pella, Baishak, and Akshaya Tritiya was a great, I would say, initiative.

Suvankar Sen: First of all, what we would like to clarify is that the buildup of the inventory that we did for the business of Pahela Baishakh and Akshaya Tritiya was a great, I would say, initiative, and it did help in achieving the numbers in April in terms of our sales. It was that which really helped us to grow our business, make sure that stock was available when consumers were in a mood to buy. That was one part of it. Over the quarter, what we have seen is that with the demand not being as much, we have tried to ensure that whatever inventory we had built up and whatever inventory was selling to focus on that and to sell the inventory buildup and lowering it down.

Speaker #2: And it did help in achieving the numbers in the month of April in terms of our sales. So it was that which really helped us to grow our business, make sure that stock was available when consumers were, you know, moved to buy.

Speaker #2: So that was one part of it. And over the quarter, what we have seen is that with the demand not being as much, we've tried to ensure that whatever inventory we had built up, and whatever inventory was selling, to focus on that and to sell the inventory buildup and lower it down.

Speaker #2: And I think that as we ended the quarter, we could see that our stock turnover ratio has improved substantially. But again, we need to keep in mind that as we move towards the festive season of October, so towards September onwards, we will be building up the inventory for the festive season.

Suvankar Sen: I think that as we ended the quarter, we could see that our stock turnover ratio has improved substantially. Again, we need to keep in mind that as we move towards the festive season of October, towards September onwards, we will be building up the inventory for the festive season. Over a period of the festive season, we will again try to lower it down. That is the general strategy with which we shall be following in terms of building up of the inventory and then further on use the season to sell it. I would say, Pankajji, that this 7% to 7.5% is operational.

Speaker #2: And over a period during the festive season, we will again try to lower it down. So that's the general strategy that we shall be following in terms of building up the inventory and then further using the season to sell it.

Speaker #2: And I would say, Bankerji, that this 7, 7 and a half percent is the optional primarily what we—

Sanjay Banka: Yes. See that primarily what we are saying is that obviously that which I have clarified that 7.5% to 7.8% is an operational EBITDA, and whenever the gold price rise, there will be some gain, and in case of any gold price fall, there will be some losses. If you have seen our comments, we have said that this quarter gold price fall competitiveness, discounting, they had impacted the margins and increased by the custom duty impact. That is how you should see the 7% in that larger perspective.

Suvankar Sen: Yes. See that primarily what we are saying is that obviously that which I have clarified that 7.5% to 7.8% is an operational EBITDA, and whenever the gold price rise, there will be some gain, and in case of any gold price fall, there will be some losses. If you have seen our comments, we have said that this quarter gold price fall competitiveness, discounting, they had impacted the margins and increased by the custom duty impact. That is how you should see the 7% in that larger perspective.

Speaker #3: What you are saying is correct. Obviously, as I have clarified, that ₹7 to ₹7.5 to ₹7.8 crore is operational EBITDA. And whenever the gold price rises, there will be some gain.

Speaker #3: And in case of any gold price fall, there will be some some losses. So if you have seen our our our comments we've said that this quarter gold price fall had gold price fall competitiveness discounting they had impacted the the margins.

Speaker #3: And increased by the customs duty impact. So that's how you should see the 7% in that larger perspective. Okay, sir. So you're saying there is some impact, okay.

Amish: Okay, sir. We are seeing there is some impact out. Okay. Sir, also if I was observing that you said our retail sales was 50% higher, our reported sales is more than 60% higher, and the average gold price as reflected in our press release is up by more than 60%. The question, sir, is are we seeing a grammage reduction in sales? Should we be worried about despite our network growing?

Abneesh Roy: Okay, sir. We are seeing there is some impact out. Okay. Sir, also if I was observing that you said our retail sales was 50% higher, our reported sales is more than 60% higher, and the average gold price as reflected in our press release is up by more than 60%. The question, sir, is are we seeing a grammage reduction in sales? Should we be worried about despite our network growing?

Speaker #3: And sir, I was also observing that, you know, you said our retail sales were 50% higher. Our reported sales are more than 60% higher.

Speaker #3: And the average gold price, as reflected in our press release, is up by more than 60%. So the question, sir, is: Are we seeing a grammage reduction in sales?

Speaker #3: And should we be worried about it despite, you know, our network growing?

Speaker #2: See, grammage reduction is not a factor at all. I think when we talk about grammage, we talk about converted grammage into 24-carat purity.

Sanjay Banka: See, grammage reduction is not a factor at all. I think when we talk about grammage, we talk about converting grammage into 24 carat purity. We will start talking about the mixed purity, right? In the mixed purity, certainly grammage has increased. Okay? In a 24 carat purity level, a slight, I think, around 1% reduction is there. As we have always reiterated, the retail jewelry business is not about the volume. Customers do not consume gold by volume, but by value. The current volume, not only for Senco, but for India at large, has remained, you know, around 1,050 to 1,800 tons. That has been the size of import by India, and of that, 60% is jewelry, 40% is organized sector. That number largely remains the same. Within that only company has grown four to five times.

Speaker #2: We will start talking about the mixed purity, right? So, in mixed purity, certainly grammage has increased, okay? Now, in a 24-carat purity level, it's slight.

Speaker #2: I think around a 1% reduction is there. But as you've always reiterated, the jewelry retail business is not about the volume—customers do not consume gold by volume.

Speaker #2: But by value. So, the current volume, not only for Senco but for India at large, has remained, if you know, around 750 to 800 tons.

Sanjay Banka: The current volume, not only for Senco, but for India at large, has remained, you know, around 1,050 to 1,800 tons. That has been the size of import by India, and of that, 60% is jewelry, 40% is organized sector. That number largely remains the same. Within that only company has grown four to five times. We look at grammage as a lesser part of our business. We focus more on making charges, which are a percentage of value and not per gram. I hope it clarifies your query.

Speaker #2: That has been the size of import by India. And of that, 60 percent is jewelry, 40 percent is organized sector. That number largely remains the same.

Speaker #2: And within that, only the company has grown four to five times. So, if we look at grammage again, that's a lesser part of our business. We focus more on making charges, which are a percentage of value and not per gram.

Sanjay Banka: We look at grammage as a lesser part of our business. We focus more on making charges, which are a percentage of value and not per gram. I hope it clarifies your query.

Speaker #2: I hope this clarifies your query.

Speaker #3: Yes, sir. Appreciate it. Sir, last couple of good picking questions, sir. Cash flow from operations—is it possible to share for the first quarter? It should be positive because we have used our inventory.

Amish: Yes, sir. Appreciate. Sir, last quick picking question, sir. Cash flow from operation, is it possible to share for the first quarter? It should be positive because we have used the

Abneesh Roy: Yes, sir. Appreciate. Sir, last quick picking question, sir. Cash flow from operation, is it possible to share for the first quarter? It should be positive because we have used the

Sanjay Banka: Sorry. The cash flow from operation will be sharing in next one. As you would have seen for the last year, it is an accounting, I don't want to call it anomaly, it is accounting optics. If the GML is lesser, it will be impacted by the GML. This quarter, since the GML borrowing is lesser, to my understanding, cash flow from operation from accounting perspective will be negative. Let the Q2 span out, and when we publish cash flow, it will become clear. It is more of an accounting concept, not the business reality. The business is generating the sales, 67% growth is there. Customers are coming, we are making profit. The only thing is that we are investing and plowing back the money in the business itself.

Speaker #2: See, cash flow from operation will be sharing in H1. But as you would have seen for the last year it's a it's an accounting I don't want to call it anomaly.

Speaker #2: It is accounting optics. So if the level is lesser, it will be impacted by the GML. So this quarter, since the GML borrowing is lesser, to my understanding, cash flow from operations from an accounting perspective will be negative.

Speaker #2: So let Q2 span out, and when we publish, cash flow will become clear. So it is more of an accounting concept, not the business reality.

Speaker #2: The business is generating sales. There is 67% growth. Customers are coming, and we are making profit. The only thing is that we are investing and flowing back the money into the business itself.

Speaker #2: Thank you.

Amish: Okay.

Abneesh Roy: Okay.

Speaker #3: That explains it. Thanks a lot, and all the best.

Sanjay Banka: Thank you.

Amish: That explains. Thanks a lot and all the best, sir.

Abneesh Roy: That explains. Thanks a lot and all the best, sir.

Speaker #1: Thank you. The next question is from the line of Arvind, an individual investor. Please go ahead.

Operator 2: Thank you. The next question is from the line of Arvind, an individual investor. Please go ahead.

Operator: Thank you. The next question is from the line of Arvind, an individual investor. Please go ahead.

Speaker #4: Hi. Good morning everyone. I just have a couple of questions. First of all regarding the inventory days congratulations it has come down meaningfully. But can we expect it to at least if not reduce further but can we expect it to maintain at these levels?

[Company Representative]: Hi. Good morning, everyone. I just have a couple of questions. First of all, regarding the inventory days, congratulations, it has come down meaningfully. Can we expect it to at least, if not reduce further, but can we expect it to maintain at these levels?

Arvind Dureja: Hi. Good morning, everyone. I just have a couple of questions. First of all, regarding the inventory days, congratulations, it has come down meaningfully. Can we expect it to at least, if not reduce further, but can we expect it to maintain at these levels?

Speaker #2: See, Arvindji, while we are taking all efforts to improve the inventory days, as a business we are really concerned about business efficiency, improving return on capital employed, and return on equity.

Sanjay Banka: Arvind-ji, while we are taking all effort to improve the inventory days as a business,

Sanjay Banka: Arvind-ji, while we are taking all effort to improve the inventory days as a business, we are equally concerned about business efficiency, improving return on capital employed and return on equity. Now we are bracing for, let's say, 35% to 50% growth. We've already achieved 60% growth in Q1. Now, when the entire business is growth driven, one has to be clear that you have to provide the customer with choices.

Sanjay Banka: we are equally concerned about business efficiency, improving return on capital employed and return on equity. Now we are bracing for, let's say, 35% to 50% growth. We've already achieved 60% growth in Q1. Now, when the entire business is growth driven, one has to be clear that you have to provide the customer with choices. Choices, larger range, larger designs, and that becomes possible only with the inventory. So we have to maintain a very tight rope balance. So we prefer to see return on equity and return on capital employed as the most important and sole criteria, and with factors like inventory days as a subsidiary criteria.

Speaker #2: But now we are bracing for let's say 25 to 30 percent growth. We have already achieved 60 percent growth in quarter one. Now when the entire business is growth driven one has to be one has to be clear that you have to provide the customer with choices.

Speaker #2: Choices, larger range, larger designs. And that becomes possible only with the inventory. So, we have to—we have to maintain a very tightrope balance.

Sanjay Banka: Choices, larger range, larger designs, and that becomes possible only with the inventory. So we have to maintain a very tight rope balance. So we prefer to see return on equity and return on capital employed as the most important and sole criteria, and with factors like inventory days as a subsidiary criteria. So we take your question and concern with utmost respect and importance, but we will like to grow and not at the cost of one or two parameters, and focus on improving overall shareholder wealth creation in the form of return on equity.

Speaker #2: So, we prefer to see return on equity and return on capital employed as the most important and sole criteria, and these factors like inventory days as a subsidiary criteria.

Speaker #2: So, we take your feedback on and concern with utmost respect and importance. But we would like to grow, and not at the cost of one or two parameters, and focus on improving overall shareholder wealth creation in the form of return on equity.

Sanjay Banka: So we take your question and concern with utmost respect and importance, but we will like to grow and not at the cost of one or two parameters, and focus on improving overall shareholder wealth creation in the form of return on equity.

Speaker #4: Okay. Well, I hope you also benchmark your performance with some of the listed peers. And if I look at their inventory turns, it's closer to three or three plus.

[Company Representative]: Well, I hope you also benchmark your performance with some of the listed peers. If I look at their inventory turns, it's closer to three or three plus for some of the newly listed companies like PN Gadgil, and their return ratios are significantly higher, closer to 25% to 30%. So, where are we lacking?

Arvind Dureja: Well, I hope you also benchmark your performance with some of the listed peers. If I look at their inventory turns, it's closer to three or three plus for some of the newly listed companies like PN Gadgil, and their return ratios are significantly higher, closer to 25% to 30%. So, where are we lacking?

Speaker #4: For some of the newly listed companies like PM Guard Gill, their return ratios are significantly higher—closer to 25–30 percent. So, I mean, where are we lacking?

Speaker #2: No, no sir, we don't want to comment on our competitor feed. Every business has a certain unique customer base and certain unique product design. We are also tracking all our competitors with utmost respect and with equal curiosity.

Sanjay Banka: No, sir, we don't want to comment on our competitor. Every business has certain unique customer base, certain unique product design. We are also tracking all our competitors with utmost respect and with equal curiosity. As a general, we can say that I don't think it is lacking. It is a business model, market, business strategy. While these terms may appear generic, let me assure you, sir, that we look at all factors, and in the initial part you said that we've implemented a very AI-based software, where we are looking at inventory productivity by jewelry, by range, by design, by metal, by customer base. Everything possible that we are doing. We have to look at the. We are creating the traction in the market. That is all I can.

Speaker #2: So at this juncture we can say that I don't think it is lacking. It is a business model market business strategy while these terms may appear generic but let me assure you sir that we look at all factors and in the in the part you said that we have implemented a a very AI based software.

Speaker #2: We are where we are, looking at inventory productivity by jewelry, by range, by design, by metal, by customer base—everything possible that we are doing.

Speaker #2: But we have to look at creating traction in the market. That is all I can say without divulging too much on this forum.

[Company Representative]: Okay

Arvind Dureja: Okay

Sanjay Banka: divulging too much on this forum.

Sanjay Banka: Divulging too much on this forum.

Speaker #4: Okay. Thank you, Mr. Banke. And finally, I want to...

[Company Representative]: Okay. Thank you, Mr. Banka. And finally, I want to.

Arvind Dureja: Okay. Thank you, Mr. Banka. And finally, I want to.

Speaker #1: Sorry to interrupt, Mr. Arvind. Please rejoin the queue for the follow-up question. The next question is from the line of Yash from Edelweiss.

Operator 2: Sorry to interrupt, Mr. Arvind. Please rejoin the queue for the follow-up question. The next question is from the line of Yash from Edelweiss. Please go ahead.

Operator: Sorry to interrupt, Mr. Arvind. Please rejoin the queue for the follow-up question. The next question is from the line of Yash from Edelweiss. Please go ahead.

Speaker #1: Please go ahead.

Speaker #3: Hi. Thank you, team, for taking my questions. I have a few questions. I hope I'm audible.

Yash: Hi. Thank you, team, for taking my questions. I have few questions. I hope I am audible.

Yash Sonthaliya: Hi. Thank you, team, for taking my questions. I have few questions. I hope I am audible.

Speaker #1: Yes.

Operator 2: Yes.

Operator: Yes.

Speaker #3: Yeah. So my first question is, sir, basically the gold prices ran up a lot in the last one year. So, on a steady-state basis, what is the inventory we search to have per store, and what is the revenue per store we are looking for?

Yash: Yeah. My first question is, sir, basically the gold prices ran up a lot in last one year. On a steady state basis, what is the inventory we envisage to have per store and what is the revenue per store we are looking for? What is the inventory turn we will have focused on? See, this is a very strategic question, but just to give a broad idea based on the market and based on where we are, the inventory that we keep can range between maybe 15 to 18 kgs to about 35, 40. It all depends on the market potential and the market requirement. Also, what is the competition that where they are keeping what. It will be dynamic. You cannot fix it to one particular number, but it will be an average of the range that we spoke about.

Yash Sonthaliya: Yeah. My first question is, sir, basically the gold prices ran up a lot in last one year. On a steady state basis, what is the inventory we envisage to have per store and what is the revenue per store we are looking for? What is the inventory turn we will have focused on? See, this is a very strategic question, but just to give a broad idea based on the market and based on where we are, the inventory that we keep can range between maybe 15 to 18 kgs to about 35, 40. It all depends on the market potential and the market requirement. Also, what is the competition that where they are keeping what. It will be dynamic. You cannot fix it to one particular number, but it will be an average of the range that we spoke about.

Speaker #3: Like, what is the inventory turn we will be focused on?

Speaker #2: So so see this is a very in a strategic question but just to give a broad idea based on the market and based on the you know where we are.

Speaker #2: The inventory that we keep can range between maybe 15 to 18 kgs, to about 35 or 40. So it all depends on the market potential and the market requirement.

Speaker #2: And also, what is the competition and where are they keeping what. So, it will be dynamic. You cannot fix it to one particular number, but it will be an average of the range that we spoke about.

Speaker #2: At the same time, let us assure you all that we are also conscious that we do not want to block our inventory unnecessarily.

Yash: At the same time, let us assure you all that we are also conscious that we do not want to block our inventory unnecessarily. We are looking at the consumer budget. We are introducing various types of purity, 9 karat, 14 karat, 18 karat, along with the traditional 22 karat, just so that we could fulfill the requirement of product as per the budget of the customer. This is one aspect of it. The second aspect is that along with the gold jewelry, there has to be a substantial availability of the diamond, platinum, and these kind of modern, high profitable jewelry are kept at the store as well. We have got a whole optimum stock store-wise that we maintain and we try to fulfill. This is how one has to look at the overall picture.

Yash Sonthaliya: At the same time, let us assure you all that we are also conscious that we do not want to block our inventory unnecessarily. We are looking at the consumer budget. We are introducing various types of purity, 9 karat, 14 karat, 18 karat, along with the traditional 22 karat, just so that we could fulfill the requirement of product as per the budget of the customer. This is one aspect of it. The second aspect is that along with the gold jewelry, there has to be a substantial availability of the diamond, platinum, and these kind of modern, high profitable jewelry are kept at the store as well. We have got a whole optimum stock store-wise that we maintain and we try to fulfill. This is how one has to look at the overall picture.

Speaker #2: We are looking at the consumer budget. We are introducing various types of purity—9 carat, 14 carat, and 18 carat—along with the traditional 22 carat, just so that we can fulfill the requirement of products as per the budget of the customer.

Speaker #2: So this is one aspect of it. And the second aspect is that along with the gold jewelry, there has to be a substantial, you know, availability of diamond, platinum, and these kinds of modern, high-profitable jewelry kept at the store as well.

Speaker #2: And we are also we've got a whole optimum stock store wise that we maintain and we try to fulfill. So this is how one has to look at the overall picture.

Speaker #3: Yes, please. There is an inventory value which is appearing in the balance sheet as of March 26th. Out of that, let's say 10% to 15%—if you exclude inventory in transit or in various stages of tagging, etc.—then if you divide the remaining inventory by the number of stores, you can find out the average inventory per store.

Sanjay Banka: Yes, see. There is an inventory value which is appearing in the balance sheet as on 26 March. Out of that, let us say 10% to 15%, if you exclude being in transit or in various stages of tagging, et cetera. That if you divide by the number of stores, you can find out average inventory per store. But that, once again, will be a slightly narrower approach because the inventory which we maintain is, we have talked about here hub and spoke model. The inventory at our own store, let us say in West or in Mumbai, that is also meant for my Nagpur store. Or something in Indore may be meant for Gwalior store, or one in Patna may be meant for Jabalpur store. In a narrower approach, you can take 10%, 15% inventory being in transit and tagging and divide that by number of stores.

Speaker #3: But that, once again, will be a slightly narrower approach, because the inventory which we maintain is— we have talked about your hub-and-stock model.

Speaker #3: So the inventory at our own store, let's say in the West or in Mumbai, that is also meant for my Nagpur store.

Sanjay Banka: The inventory at our own store, let us say in West or in Mumbai, that is also meant for my Nagpur store. Or something in Indore may be meant for Gwalior store, or one in Patna may be meant for Jabalpur store. In a narrower approach, you can take 10%, 15% inventory being in transit and tagging and divide that by number of stores. Out in larger context, the inventory per store is more of a strategic number.

Speaker #3: Or something in Indore may be meant by Gwalior store, or one in Patna may be meant for Pavilpur store. So, in a narrower approach, you can take 10–15% inventory being in transit and tagging, and divide that by the number of stores.

Speaker #3: But in the larger context, the inventory per store is more of a strategic number. Got it. Got it. So, sir, I will tell you where I am coming from.

Sanjay Banka: Out in larger context, the inventory per store is more of a strategic number.

Yash: Got it. Sir, I will tell you where I am coming from. Basically, the vision we gave INR 20,000 crore revenue with 300 stores by 2030. So which broadly means doing around INR 60, 65 crore revenue per store. And at 2.5x inventory turns, that means around INR 25, 30 crore of inventory per store. I was not able to understand the math over there.

Yash Sonthaliya: Got it. Sir, I will tell you where I am coming from. Basically, the vision we gave INR 20,000 crore revenue with 300 stores by 2030. So which broadly means doing around INR 60, 65 crore revenue per store. And at 2.5x inventory turns, that means around INR 25, 30 crore of inventory per store. I was not able to understand the math over there.

Speaker #3: Basically, the region will give ₹20,000 crore in revenue with 300 stores by 2030, which broadly means doing around ₹60-65 crore revenue per store.

Speaker #3: And at two to two-and-a-half times inventory turns, that means around 25 to 30 crore of inventory per store. So I was not able to understand the math over there.

Speaker #2: So, no, that number is correct. There are many stores which have crossed ₹200 crore. We have stores in the range of ₹50 crore, ₹100 crore, ₹150 crore, ₹200 crore, and ₹250 crore also.

Sanjay Banka: No, that number is correct. There are many stores which have crossed INR 200 crore. We have stores in the range of INR 50 crore, INR 100 crore, INR 150 crore, INR 200, and INR 250 also. And in one of the call, I think I gave a blended number of INR 37 crore average. I mean, you can take the total and divide by number, you will get the number. It is a very conservative number. We can say I am saying that this vision which we have given is very much achievable given the growth. Obviously, it will entail increase in the inventory as well. Well, let us say currently when we are looking at a INR 5,000 crore inventory, to achieve the INR 20,000 crore top line, you will certainly require INR 8,000 to 9,000 crore of inventory.

Speaker #2: And in one of the calls, I think I gave a blended number of ₹37 crore average. So, I mean, you can take the total and divide by the number, you will get the number.

Speaker #2: So it's a very, very conservative number. I mean, I can say that the region which you have given is very much achievable, given the growth.

Speaker #2: Obviously it will it will entail increase in the inventory as well. So when let's say currently when we are looking at a 5,000 crore inventory to achieve the to achieve the 20,000 crore top line you will certainly require 8 to 9,000 crore of inventory.

Sanjay Banka: Obviously, it will entail increase in the inventory as well. Well, let us say currently when we are looking at a INR 5,000 crore inventory, to achieve the INR 20,000 crore top line, you will certainly require INR 8,000 to 9,000 crore of inventory. If you do the peer benchmarking for the competitor who are doing around INR 20,000 crore, you will find a similar number. You can find inventory around INR 12,000 crore for a INR 20,000 crore company.

Speaker #2: And if you do the tier benchmarking for the competitors who are doing around ₹20,000 crore, you will find a similar number.

Sanjay Banka: If you do the peer benchmarking for the competitor who are doing around INR 20,000 crore, you will find a similar number. You can find inventory around INR 12,000 crore for a INR 20,000 crore company.

Speaker #2: You can find inventory around ₹12,000 crore or ₹20,000 crore company.

Speaker #3: So, got it. Got it. Got it.

Yash: Got it.

Yash Sonthaliya: Got it.

Sanjay Banka: That is why instead of giving those details, we have said that we will be looking at improving the return of equity and return of capital employed to 20% range. Inventory will be subset of that efficiency.

Speaker #2: Yes. Instead of giving those details, we have said that we will be looking at improving the return on equity and return on range.

Speaker #2: Inventory will be a subset of that efficiency.

Speaker #3: Makes sense, sir. Makes sense, sir. Thanks a lot for the answers.

Yash: Makes sense, sir. Thanks a lot for the answers.

Yash Sonthaliya: Makes sense, sir. Thanks a lot for the answers.

Speaker #2: Thank you.

Sanjay Banka: Thank you.

Speaker #1: Thank you. Ladies and gentlemen, to ensure that every participant gets an opportunity, please restrict your questions to one per participant. The next question is from the line of Vaishnavi from Anantharati Investments.

Operator 2: Thank you. Ladies and gentlemen, to ensure that every participant gets an opportunity, please restrict your questions to one per participant. The next question is from the line of Vaishnavi from Anand Rathi Investments. Please go ahead.

Operator: Thank you. Ladies and gentlemen, to ensure that every participant gets an opportunity, please restrict your questions to one per participant. The next question is from the line of Vaishnavi from Anand Rathi Investments. Please go ahead.

Speaker #1: Please go ahead.

[Analyst] (Anand Rathi Investments): Hi. Thank you for taking my question. Sir, just one question. If I may have missed out on the answer already, I am sorry. I just wanted to understand that this margin, the EBITDA margin that we have reported in this quarter, right? What would be this number, removing all the one-offs that were there? So let us say removing the custom duty rate change impact and whatever the impact would have been because of the gold price movement, et cetera. What would our core business operating margin would have looked like in this quarter and the comparable margin for the previous quarter as well, please.

Vaishnavi Mandhaniya: Hi. Thank you for taking my question. Sir, just one question. If I may have missed out on the answer already, I am sorry. I just wanted to understand that this margin, the EBITDA margin that we have reported in this quarter, right? What would be this number, removing all the one-offs that were there? So let us say removing the custom duty rate change impact and whatever the impact would have been because of the gold price movement, et cetera. What would our core business operating margin would have looked like in this quarter and the comparable margin for the previous quarter as well, please.

Speaker #4: Hi, thank you for taking my question. Just one question—if I may have missed out on the answer already, I'm sorry. I just wanted to understand: the margin, the EBITDA margin that we've reported in this quarter, right?

Speaker #4: What would this number be after removing all the one-offs that were there? So, let's say, removing the custom duty rate change impact and whatever the impact would have been because of the gold price movement, etcetera, etcetera.

Speaker #4: What would our core business operating margin have looked like in this quarter? And the comparable margin for the previous quarter as well, please.

Speaker #3: See, Vaishnavi, we have said that sustainable EBITDA margin is 7.5% to 7.8%. This quarter's number was impacted by the hedge position.

Sanjay Banka: Vaishnavi, we have said that sustainable EBITDA margin is 7.5% to 7.8%. This quarter number, we are impacted by the hedge position. So we have said 50% hedge, which means that there will be certain impact on the realization due to price fall. Then the discounting in the market due to the custom duty increase. Then there are the old gold scheme which we offer, that also impacts the margin, which other analysts have also said. Custom duty gain has come in. Similarly, when we offer customer schemes and advances To promote the sale, we have to give certain benefits to them. So this 7% is net of all of that, but this is only quarter spacing, so we have to see the performance over three to four quarters and let us look for the entire year where we are confident to deliver 7.5% to 7.8%.

Speaker #3: So we have said 50 percent hedge which means that then with certain impact on the reliance and due to price price fall then the discounting in the market due to the custom duty increase then then then they are the old gold scheme which we offer that also impacts the margin which with other jewelers have also said.

Speaker #3: Custom duty gain has come in. Similarly, when we offer customer schemes and advances to promote the sale, we have to give certain benefits to them.

Suvankar Sen: To promote the sale, we have to give certain benefits to them. So this 7% is net of all of that, but this is only quarter spacing, so we have to see the performance over three to four quarters and let us look for the entire year where we are confident to deliver 7.5% to 7.8%.

Speaker #3: So this 7% is net of all of that. But this is only quarter-specific, so we have to see the performance over three to four quarters and look at the entire year, where we are confident to deliver.

Speaker #3: 7.5 to 7.8.

Speaker #4: Which I understand. For example, if we are talking about peers, right: Titan explicitly stated what was the positive impact of the custom duty benefit on their overall EBIT.

[Analyst] (Anand Rathi Investments): Which I understand. For example, if we are talking about peers, Titan explicitly stated what was the positive impact of the custom duty benefit on their overall EBIT. If I want to say that, what was the positive impact of the custom duty rate change on our numbers, what would that number be approximately?

Vaishnavi Mandhaniya: Which I understand. For example, if we are talking about peers, Titan explicitly stated what was the positive impact of the custom duty benefit on their overall EBIT. If I want to say that, what was the positive impact of the custom duty rate change on our numbers, what would that number be approximately?

Speaker #4: So, if I want to say what was the positive impact of the customs duty rate change on our numbers, how would I—like, what would that number be, approximately?

Speaker #2: So, that number we have not called out as yet.

Suvankar Sen: That number we have not called out as yet.

Speaker #4: Okay. Is there any chance of us getting this number sir because then that would help us in terms of you know building our steady state business margins going forward without any of the one offs and basically how to look at the business on an operating performance basis instead of looking at you know instead of all the hedging numbers etcetera all of that also coming in the picture.

[Analyst] (Anand Rathi Investments): Okay. Is there any chance of us getting this number, sir? Because then that would help us in terms of building our steady state business margins going forward without any of the one-offs and basically how to look at the business on an operating performance basis instead of all the hedging numbers, et cetera, all of that also coming in the picture.

Vaishnavi Mandhaniya: Okay. Is there any chance of us getting this number, sir? Because then that would help us in terms of building our steady state business margins going forward without any of the one-offs and basically how to look at the business on an operating performance basis instead of all the hedging numbers, et cetera, all of that also coming in the picture.

Speaker #2: No, so Vaishnavi, in terms of the one-off gains, we believe that whatever gains would be coming from the duty rise will be achieved over the coming two to three quarters.

Suvankar Sen: Vaishnavi, in terms of the one-off gains, we believe that whatever gains would be coming from the duty rise will be achieved over the coming 2, 3 quarters. On an estimate basis, maybe the gain that we have achieved in the first quarter because we had more or less 45 days after the announcement. In our estimate, it says about 12 to 15 crores. That is the kind of range with which we should be expecting the gain to come in. Again, the gain that we have achieved and received will be mitigated or based on whatever offers, schemes, discounts, blah, blah, we are giving. But yes, from that particular custom duty gain, we can estimate that, yes, this particular quarter could be anything between 12 to 15 crores.

Speaker #2: So, on an estimate basis, maybe the gain that we have achieved in the first quarter—because we had about 45 days after, more or less, 45 days after the announcement.

Speaker #2: So, in our estimate, it says about ₹12 to ₹15 crore—that is the kind of range in which we should be expecting the gain to come in.

Speaker #2: Again, the gain that we have achieved and received will be mitigated or, you know, based on whatever offers, schemes, discounts, blah, blah, blah, we are giving.

Speaker #2: But yes, from that particular custom duty gain, we can estimate that this particular quarter could be anywhere between ₹12 to ₹15 crores. So that's just an estimate that we are thinking is what we have achieved in this particular quarter.

Suvankar Sen: That is just an estimate that we are thinking is what we have achieved in this particular quarter.

Speaker #2: And the quarter's progress, we will see that whatever gains have come in, whether we shall, you know, we'll keep you, you know, updated as and when.

[Analyst] (Anand Rathi Investments): Yes.

Vaishnavi Mandhaniya: Yes.

Suvankar Sen: As the quarters progress, we will see that whatever gains have come in, we will keep kind of estimating and calling it out as and when we feel so.

Speaker #2: We feel so.

Speaker #4: Because I think previously, when the customs duty rate...

[Analyst] (Anand Rathi Investments): Because I think previously when the custom duty rate-

Vaishnavi Mandhaniya: Because I think previously when the custom duty rate-

Speaker #1: Oh, I'm sorry. Sorry to interrupt, Vaishnavi. Please, please join the queue for the follow-up question. The next question is from the line of Gunjan from GB Investments.

Operator 2: Sorry to interrupt, Vaishnavi. Please rejoin the queue for the follow-up question. The next question is from the line of Gunjan from GB Investments. Please go ahead.

Operator: Sorry to interrupt, Vaishnavi. Please rejoin the queue for the follow-up question. The next question is from the line of Gunjan from GB Investments. Please go ahead.

Speaker #1: Please go ahead.

Speaker #4: Thank you, sir. My question is, how does management intend to optimize the 50% hedging strategy going forward, particularly if gold prices are expected to rise and the—

[Analyst] (GB Investments): Thank you, sir. My question is, how does management intend to optimize the 50% hedging strategy going forward? Particularly if the gold prices are expected to rise. Am I audible, sir?

Speaker #4: Am I audible sir?

Speaker #2: Yes, yes, we are listening to you, madam.

Suvankar Sen: Yes, yes. We are listening to you, madam.

Speaker #4: Okay, so my question was: If gold prices are expected to rise and the higher import duty provides some cushion in the margin, how is the management planning to adjust the hedging margins?

Rachelle Smith: Okay. My question was, if the gold prices are expected to rise and the higher import duty, it provides some cushion in the margin. How is the management planning to adjust the hedging margins?

[Analyst] (GB Investments): Okay. My question was, if the gold prices are expected to rise and the higher import duty, it provides some cushion in the margin. How is the management planning to adjust the hedging margins?

Speaker #2: No, actually, we have no, you know, thought in our hedging margin or anything. What you are talking about, the margin that we give to banks and MCX, that is one part of it.

Suvankar Sen: No, actually we have no thought in our hedging margin or anything. You are talking about the margin that we give to banks and MCX, that is one part of it. But from a perspective of a policy, because of this uncertainty and volatility, we believe that a 50% approach is a very stable, manageable hedging percentage in this volatile scenario where we can balance between risk of price movement and the liquidity available in the company so that the growth trajectory continues to happen. That is where we are managing it and keeping it at these kind of levels. That is number one. But again, I would like to say that there were times that the company was hedged at 75%, 80%, 85% also, when the prices were much more stable and overall the margin requirements by these exchanges and banks were at a lower level.

Speaker #2: But from a perspective of policy, because of this uncertainty and volatility, we believe that a 50 percent approach is a very stable and manageable hedging percentage in this volatile scenario, where we can balance between the risk of price movement and the liquidity available in the company, so that the growth trajectory continues to happen.

Speaker #2: So that's where we are managing it, and keeping it at these kinds of levels. That is number one. But again, I would like to say that there were times that the company was hedged at 75%, 80%, 85% also.

Suvankar Sen: That is where we are managing it and keeping it at these kind of levels. That is number one. But again, I would like to say that there were times that the company was hedged at 75%, 80%, 85% also, when the prices were much more stable and overall the margin requirements by these exchanges and banks were at a lower level. So again, God willing, that when things will stabilize and the liquidity availability to the company shall be adjusted to this current scenario of the gold price, we will move towards a higher percentage of hedging. However, for now, we would like to say that it will be up in the range of 50%. That is how one has to look at it and plan for the future.

Speaker #2: When the prices were much more stable and overall the margin requirements by these exchanges and banks were at a lower level. So again God willing that when things will stabilize and you know the liquidity availability to the company shall be adjusted to this current scenario of the gold price we will move towards a higher percentage of hedging.

Suvankar Sen: So again, God willing, that when things will stabilize and the liquidity availability to the company shall be adjusted to this current scenario of the gold price, we will move towards a higher percentage of hedging. However, for now, we would like to say that it will be up in the range of 50%. That is how one has to look at it and plan for the future.

Speaker #2: However, for now, we would like to say that it will be in the range of 50 percent. So that is how one has to look at it.

Speaker #2: And plan for the future.

Speaker #4: Okay, thank you, sir. My other question is:

Rachelle Smith: Okay. Thank you, sir. My other question is-

Operator: Okay. Thank you, sir. My other question is-

Speaker #1: Oh, sorry to interrupt, Gunjan. Please, please join the queue for the follow-up question. The next question is from the line of Madhuandra, from an individual investment.

Operator 2: Sorry to interrupt, Gunjan. Please rejoin the queue for the follow-up question. The next question is from the line of Madhu Vanda from Individual Investment. Please go ahead.

Operator: Sorry to interrupt, Gunjan. Please rejoin the queue for the follow-up question. The next question is from the line of Madhu Vanda from Individual Investment. Please go ahead.

Speaker #1: Please go ahead.

Speaker #3: Yeah hello.

Madhu Vanda: Yeah, hello.

Speaker #2: Yes yes you are audible.

Suvankar Sen: Yes. You are audible.

Speaker #3: Yeah. Sir please means I matlab I strongly believe that your the management is not shareholder friendly because I am saying this because you are thought early results throws a lot of uncertainty.

Madhu Vanda: Sir, I strongly believe that the management is not shareholder friendly. I am saying this because your quarterly results show a lot of uncertainties. Sometimes your margins come at 13%, sometimes 5%, sometimes 8%. I know the hedging policies and the inventory then. This is you need to Senco Gold only, because no other listed jewelry company has so much unpredictability. The result is that your share has been the worst performance in the jewelry sector, despite reporting all-time highest revenue and blockbusters in sales and all. So I believe that you should seriously need to become more predictable regarding margin and be shareholder friendly.

Speaker #3: Sometimes your margin comes at 13 percent, sometimes 5 percent, sometimes 8 percent. And I know the hedging policies and the inventories are in, but this issue needs to be sent to them only because no other listed jewelry company has so much unpredictability.

Speaker #3: And the result is that your share has had the worst performance in the jewelry set, despite reporting all-time high revenue and blockbuster same-store sales and all.

Speaker #3: So, I believe that you seriously need to become more predictable regarding margin and be more shareholder-friendly.

Speaker #2: Yes I I we we really appreciate your feedback sir and you know we will we keep guiding on a seven and a half to seven point eight percent for the whole year and we shall continue to work towards achieving these numbers.

Suvankar Sen: Yes. We really appreciate your feedback, sir. We keep guiding on a 7.5% to 7.8% for the whole year, and we shall continue to work towards achieving these numbers. We shall continue to look at 20% to 25% growth on the top line. These quarterly uncertainties is something that we all are having to deal with. But rest assured that we want to be shareholder friendly. That is our intent. We also want to be transparent and create a tool and a platform so that we can get the predictability as much as possible also. Kindly bear with us. The last two, three years, we know how much there has been uncertainty geopolitically, liquidity-wise, gold price have moved. All these things have happened, and we are in a growth phase. So we really take your inputs and maybe that is what it is.

Speaker #2: We shall continue to look at 20–25 percent growth on the top line. These quarterly uncertainties are something that we all are having to deal with.

Speaker #2: But the rest assure that we want to be shareholder friendly that is our intent. And we also want to be transparent and and create a tool and a platform so that we can get the predictability as much as possible also.

Speaker #2: Kindly bear with us. The last two to three years, we know how much there has been uncertainty—geopolitically, liquidity-wise, gold prices have moved. All these things have happened.

Speaker #2: And we are in a growth phase, so we really take your inputs, and maybe that is what it is. But our intent is to keep growing the company, keep growing the profits, and keep having return on capital for our shareholders.

Suvankar Sen: Our intent is to keep growing the company, keep growing the profits, keep having return on capital for our shareholders and building on the business. We will take your points and we will continuously work on it.

Speaker #2: And building on the business. But we will take your points, and we will continuously work on it.

Speaker #3: Yeah, sir. Sir, I am means as a—

Madhu Vanda: Yeah. Sir, I am means as a-

Speaker #1: Sorry to interrupt, Madhuandra. Please, please join the queue for the follow-up question. The next question is from the line of Yash from 89 Investments.

Operator 2: Sorry to interrupt, Madhu Vanda. Please rejoin the queue for the follow-up question. The next question is from the line of Yash from Yadnya Investment. Please go ahead.

Operator: Sorry to interrupt, Madhu Vanda. Please rejoin the queue for the follow-up question. The next question is from the line of Yash from Yadnya Investment. Please go ahead.

Speaker #1: Please go ahead.

Speaker #5: Hello. Am I audible?

Yash: Hello, am I audible?

Yash Oswal: Hello, am I audible?

Speaker #1: Yes.

Operator 2: Yes.

Operator: Yes.

Speaker #2: Yes yes you are audible.

Suvankar Sen: Yash, you are audible.

Speaker #5: Thank you for that. Yeah, just on the hedging thing again—so, like, we have been guiding for a 50 percent-type hedging policy. So, have we considered going to 100 percent hedging, like benchmarking ourselves against the bigger players, someone like Titan or Kalyan?

Kiarsh: Thank you for that. Yeah, just on the hedging thing again. We have been guiding for 50%-type hedging policy. Have we considered going to 100% hedging, like benchmarking ourselves against the bigger players, someone like Titan or Kalyan Jewellers? I know this is the board policy for 50% to 70% of hedging. But can we go to 100% of hedging?

Yash Oswal: Thank you for that. Yeah, just on the hedging thing again. We have been guiding for 50%-type hedging policy. Have we considered going to 100% hedging, like benchmarking ourselves against the bigger players, someone like Titan or Kalyan Jewellers? I know this is the board policy for 50% to 70% of hedging. But can we go to 100% of hedging?

Speaker #5: I know this is the board policy for 50 to 70 percent of hedging. But, like, can we go to 100 percent of hedging?

Speaker #2: Something that we would ideally like to happen. If you look at it, you know the inventory that we have, and you know it is about, say, ₹5,000 crore.

Suvankar Sen: Something that we would ideally like to happen. If you look at it, the inventory that we have, it is about, say, INR 5,000 crore and our turnover is, say, INR 10,000 crore. So in effect, if you have protected yourself for six months of sales. There are a lot of these methods in terms of the hedging. We are saying that we are hedging about 50% of our inventory. We would like to say that we want to mitigate the risk by hedging 50% of the inventory. If that mitigates the risk of any kind of margin volatility for the quarter or one quarter, two quarters, then so be it. Ultimately, our objective is to mitigate the margin volatility and any kind of risk on the price. We will move towards that. 100% is a very ideal number, and we would move closer to that.

Speaker #2: And our turnover is, say, ₹10,000 crore. So, in effect, you know, you are protected for six months of sales. So there are a lot of these methods, in terms of the hedging.

Speaker #2: So, we are saying that we are hedging about 50 percent of our, you know, inventory. So, we would like to say that we want to mitigate the risk by hedging 50 percent of the inventory. If that mitigates the risk of any kind of margin volatility for the quarter—or one quarter, two quarters—then so be it.

Speaker #2: So, ultimately, our objective is to mitigate margin volatility and any kind of risk on the price, and we will move towards that. One hundred percent is a very ideal number, and we would move closer to that.

Speaker #2: I would say that 75–80, because this 20 percent is something that we should always keep in buffer, and we want to disclose it to you as and when.

Suvankar Sen: I would say that 75%, 80%, because this 20% is something that we should always keep in buffer, and we want to disclose it to you as and when, so that we have the flexibility. That's from our side. But yes, we would like to hedge as much as possible in the long run.

Speaker #2: So that you know, we have the flexibility. So that's from our side. But yes, we would like to hedge as much as possible in the long run.

Speaker #5: Okay. Thank you.

Kiarsh: Okay. Thank you.

Yash Oswal: Okay. Thank you.

Speaker #1: Thank you, ladies and gentlemen. Due to time constraints, that was the last question. I would now like to hand the conference over to management for closing comments.

Operator 2: Thank you. Ladies and gentlemen, due to time constraints, that was the last question. I would now like to hand the conference over to the management for closing comments. Please begin.

Operator: Thank you. Ladies and gentlemen, due to time constraints, that was the last question. I would now like to hand the conference over to the management for closing comments. Please begin.

Speaker #5: Closing comments.

Speaker #2: Thank you, ladies and gentlemen, for your time and for all your questions. We would like to reiterate that this Q2 will be a quarter for planning, ensuring that we are all moving towards building up for a great Q3.

Suvankar Sen: Thank you, ladies and gentlemen, for your time, for all your questions. We would like to reinstate that this Q2 will be a quarter for planning, for ensuring that we are all moving towards building up for a great Q3. The good aspect is that after a slow May and June, July, August, we continue to see a 25% growth year-on-year, which is a good sign. I am confident that as we move on to the festive season, we shall be seeing higher levels of growth. We can see a renewed interest in the consumers in terms of buying and planning and preparing for the festive and the upcoming wedding season.

Speaker #2: The good aspect is that after a slow May and June, July and August we continue to see 25% growth year-on-year, which is a good sign.

Speaker #2: And I'm confident that as we move on to the festive season, we shall be seeing higher levels of growth. We can see a renewed interest from consumers in terms of buying, planning, and preparing for the festive and the upcoming wedding season.

Speaker #2: Another aspect that we would like you to know before closing, we’d like to reiterate that while we are looking at every quarter and excelling in our performance, the team is working on it.

Suvankar Sen: Another aspect that we would like to, before the closing, like to reiterate that while we are looking at every quarter and excelling on our performance, and the team is working on it, but broadly speaking, with a long-term vision from INR 8,400 crores that we achieved in this particular financial year. As a team over the coming four to five years, we are all working towards ensuring that how do we take our company to an INR 20,000 crore plus company from 200 odd stores that we have right now, which we shall be achieving for Senco in the upcoming one or two quarters. How do we take our company to a 300-plus store company? We are having multiple models, whether it be Senco, it could be Everlite, big format, small format based on the market requirement and the opportunities.

Speaker #2: But broadly speaking with the long term vision from a 8400 crores that we achieved in this particular financial year as a team over the coming four to five years we are all working towards ensuring that how do we take our company to a 20000 crore plus company from a 200 odd stores that we have right now which we shall be achieving for Senko in the upcoming one or two quarters.

Speaker #2: How do we take our company to a 300-plus-store company? We are having multiple models, whether it be Senco, it could be Everlight, big format, small format, based on the market requirement and the opportunities.

Speaker #2: And also, we all know that ultimately we are driving business where we want customer satisfaction, as well as driving profit for the organization and the shareholders.

Suvankar Sen: Also we all know that ultimately we are driving business where we want customer satisfaction as well as driving profit for organization and the shareholders. So from a current 7.5% to 7.8% that we keep guiding, our endeavor is to take our profitability through maybe higher stock ratio, through other initiatives towards 8% and have a PAT percentage of about 4.5% to 5%. I think that is something that should be sustainable, which will balance between growth and profitability. As Banka Ji has been kept saying that we need to look at a return on equity, return on capital. We are very conscious of that. We are optimizing our stock, we are driving efficiency, and we shall continue to work towards building the best possible return on capital for our business and for our shareholders.

Speaker #2: So from a current 7.5% to 7.8% that we keep guiding, our endeavor is to take our profitability through maybe higher stud ratio, through other initiatives, towards 8%.

Speaker #2: And have a bad percentage of about 4.5 to 5%. I think that is something that should be sustainable, which will balance between growth and profitability.

Speaker #2: And as Bankarji has been saying, we need to look at return on equity and return on capital. We are very conscious of that.

Speaker #2: We are optimizing our stocks. We are driving efficiency. And we shall continue to work towards building the best possible return on capital for our business and for our shareholders.

Speaker #2: So, thank you very much for all your best wishes and blessings. We take all your inputs in the right spirit and in a positive way so that we can improve ourselves.

Suvankar Sen: Thank you very much for all your best wishes and blessings. We take all your inputs in the right spirit and in the positive way so that we can improve ourselves and will continue to perform with our team. Thank you very much.

Speaker #2: And we'll continue to perform with our team. Thank you very much.

Operator 2: Thank you. On behalf of Elara Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Operator: Thank you. On behalf of Elara Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

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Q1 2027 Senco Gold Ltd Earnings Call

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