Target: ₹630

CMP: ₹469.60

Senco Gold boasts of being one of the top-2 as regards revenue share in the ₹80,000 crore eastern market, abetted by strongest brand accessibility vs peers, in terms of product, price & penetration. Growth headroom is huge, as its market share is still at a mid-single-digit in the East, and focused efforts are afoot to capitalise on non-East prospects.

Better access to capital, upbeat franchisee interest and shift to organised should drive a strong revenue-led EPS CAGR of over 20 per cent for Senco in FY23-26. Growth would be backed by near-equal input from new stores and SSG. Senco follows hygiene practices for sourcing/hedging gold (50 per cent stated policy), thus reducing the commodity’s volatility risk.

Unit metrics are better than/in line with peers’ (ex Titan Company) and should further improve with rise in franchisee mix. Despite similar growth prospects, Senco’s 19x 1-yr fwd P/E is at a major discount to peer valuations, offering scope for rerating.

We initiate coverage on Senco with Buy and Target Price of ₹630 (20x Sep-25E EPS).