The average target price of SENCO.BO is 617 and suggests 125% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 854.5. This translates into 211% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 400.0. This suggests 46% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Senco Gold Limited manufactures and trades in jewelry and articles made of gold, silver, platinum, and other precious and semi-precious stones in India. It sells gold and diamond jewelry. The company also offers costume jewelry, gold and silver coins, and utensils made of silver. The company sells its products under the Senco Gold & Diamonds trademark. The company operates owned and franchised showrooms, as well as online platforms. The company was incorporated in 1994 and is based in Kolkata, India.

India

Senco Gold Limited

Consumer Cyclical

The company pays dividends irregularly. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. 

SENCO.BO reported revenue of INR 52 414mn in the last 12 months, up 29% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 17% from FY23 to INR 23.98. Market expects EPS to reach INR 11.39 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 61ppts over six months and grown 14ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is slightly negative.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 6.2% in the last 12 months, a decline from 8.0% in FY23. 

Historically, SENCO.BO has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 2.1%, down from 3.6% in FY23. 

Senco Gold Limited reported a return on equity (RoE) of 9.3% in the last 12 months, down from 15.1% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 3.3% in the last 12 months, a decrease from 5.3% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 7.9%, below the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.8 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

SENCO.BO has poor trading liquidity. The average private investor can sell his common position in the stock in a single trading day under normal market conditions. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth and low margin volatility, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, poor working capital management, poor cash flow generation, and an unfavourable capital structure.

In highly turbulent market conditions, SENCO.BO is volatile. In other words, the stock will fall much more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be large. 

In normal market circumstances, SENCO.BO is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from moderate to notable. We would also like to highlight the average intraday volatility of the instrument. 

Based on key historical and expected multiples, the stock is fairly valued relative to its peers. Specifically, the stock is fairly valued on P/E, neutral on EV/EBITDA, overpriced on P/FCF. 

Senco Gold Limited

₹ 274.8

4

Senco Gold Limited

₹ 274.8

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

₹ 274.8

About

About

About

About