Gold buyers in India flocked to make purchases during the recent festive season in India, helping Senco Gold cross one of its ‘best-ever sale’.
Senco reported one of its best months ever in October, achieving over Rs 1,000 crore in sales during the festive period which covered Navratri, Diwali Dhanteras, among other celebrations in India. Senco’s Managing Director and CEO, Suvankar Sen, said this success came in the festive season despite record-high gold prices.
Sen noted a 14-15% year-over-year growth in festive season sales, with Q2 revenue from operations witnessing a robust 31% increase from the previous quarter, partly due to a government duty cut that made gold purchases more accessible for consumers.
A surge in rural demand from Tier 2, 3, and 4 cities also bolstered Senco’s sales, with the company reporting a 20% same-store sales growth. For Q2, Senco saw a year-over-year revenue increase of 31%, primarily driven by a 7% growth in gold volumes and significant value growth in both gold (30%) and diamond jewelry (9%). Senco’s profit after tax rose 1% to Rs 12.1 crore for the quarter, as high gold prices limited profit growth.
“The gold price had been at an all-time high during the festive season, which had a detrimental impact for many customers,” Sen said.
India’s gold demand remained resilient during he festive season, even as global prices reached unprecedented highs this year. According to the World Gold Council, 2024 has been a record-breaking year for gold in dollar terms, with 39 new highs set by October, fueled by central bank purchases, strong Asian demand, geopolitical tensions, and economic uncertainties.
Gold’s appeal as a safe-haven asset has remained strong, particularly amid a cooling stock market, encouraging Indian consumers to invest despite price spikes.
However, following the U.S. election results, gold prices on the Multi Commodity Exchange (MCX) have dipped by 6%, falling Rs 4,750 per 10 grams since November 4. This recent drop has caught the eye of Indian consumers, especially with the country’s bustling wedding season on the horizon. Traditionally, weddings in India are marked by heavy gold purchases, but many buyers are now pausing to see if prices will drop further before committing to large purchases.
Jewellers, too, are cautious about restocking, as they risk potential losses if prices continue to decline. Industry experts predict another small correction, with prices expected to rebound in early 2025, creating a window of opportunity for buyers before prices potentially rise again.
