In the last two-three years, gold inventory hedging has been in the range of 80 per cent for the Kolkata-based jewellery retailer
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REUTERS/SAHIBA CHAWDHARY
Jewellery retailer Senco Gold, which has been keeping a gold inventory hedging ratio at 55-60 per cent in the last six months amid high gold prices, would go back to 80-90 per cent hedging to protect inventory losses once gold prices are on a downward trend and become stable.
Until that price stability is achieved, the company would continue to hedge 55-65 per cent of its gold inventory value.
In the last two-three years, gold inventory hedging has been in the range of 80 per cent for the Kolkata-based jewellery retailer. This has gone up to 90 per cent earlier, to manage any adverse movement in gold prices.
“In the last six months, in the high gold prices volatility, there has been pressure on liquidity. There have been pressures on maintaining the margin. And, in this kind of a dynamic, volatile scenario, based on our hedging policy and guidance, we said that let us keep it at 55-60 per cent. That would ensure that we continue to focus on our business, we continue to manage our inventory well,” Senco Gold & Diamonds Managing Director and CEO Suvankar Sen told analysts during an earnings conference call for Q3FY26 on Friday.
“If gold prices are on a downward trend, there is an amount of stability that our balance sheet and liquidity is allowing us, we will go back to 80-90 per cent (of gold inventory hedging). But till that stability is achieved, it will range between 55 and 65 per cent,” Sen said.
High price-induced de-growth
Senco Gold on Thursday reported nearly eight-fold jump in its consolidated net profit to ₹264 crore for the third quarter this fiscal, backed by around 50 per cent year-on-year (y-o-y) increase in its revenue.
Revenue from operations during the third quarter this fiscal rose to ₹3,070.98 crore from ₹2,045.98 crore in the corresponding period last fiscal, buoyed by healthy growths in both average transaction value and average selling price. On a quarter-on-quarter (q-o-q) basis, revenue growth was 30 per cent. However, very high gold prices impacted volume, which saw a de-growth of around 3 per cent q-o-q.
During Q3FY26, average gold prices rose 63 per cent y-o-y and 23 per cent q-o-q, peaking at a historic high of ₹1,40,000 per 10 gm.
Dealing mechanism
“It is not that the high gold prices are discouraging consumers. Rather their faith and trust in the commodity (gold or silver) is increasing. It is only up to us as jewellers as to fit into the budget of the consumers, create products, whether it be in 22 carat, 18 carat, 14 carat, or even 9 carat,” Sen said, adding the company has been one of the first few jewellery brands to have introduced nine carat jewellery in gold and diamond jewellery.
In order to counter price volatility, the company launched almost 100 new designs daily, totalling over 6,000 in gold and 3,300 in diamond for the third quarter.
For Q3FY26, adjusted EBITDA margins expanded by 792 basis points to 13.2 per cent, driven by rising gold price, improved product mix, operating leverage and lightweight jewellery.
The company’s sustainable EBITDA margins guidance for the next financial year stands at 7.5-7.8 per cent.
Published on February 13, 2026
