Senco Gold has captured the attention of investors with its impressive share price surge over the past four trading sessions. The jewellery stock has recently reached its upper circuit limit, showcasing a remarkable 19% gain just within the week. Closing at ₹288.85 per share on Friday, this marks a nearly 27% increase from the 52-week low of ₹227.40 recorded on the NSE.
Recent Performance Insights
Market analysts have observed that despite solid underlying fundamentals, Senco Gold experienced significant selling pressure during the recent stock market downturn. The unexpected spike in gold prices has dampened jewellery demand, contributing to the stock’s decline. Moreover, the company’s Q3 FY25 results were underwhelming, which has kept Senco Gold in a phase of consolidation this year.
- Recent Share Price: ₹288.85
- 52-Week Low: ₹227.40
- Weekly Gain: 19%
- Net Profit Decline: 69.4%
Expert Opinions on Share Price Movements
Gaurav Goel, the Founder-Director of Fynocrat Technologies, commented on the latest figures: “Senco Gold’s consolidated net profit fell dramatically by 69.4% to ₹33.4 crore, down from ₹109.3 crore in the same quarter last year. Additionally, the company’s EBITDA dropped 56%, now at ₹79.96 crore, compared to ₹181.1 crore in Q3 FY24. The disappointing quarterly results, combined with broader market corrections, have caused Senco Gold to retract from its peak values.”
Investors should monitor Senco Gold’s upcoming quarterly results closely before making any new investment decisions.
Increased Volatility and Market Measures
Due to the recent disappointing earnings, both the BSE and NSE have placed Senco Gold under the short-term Additional Surveillance Measure (ASM) framework. This classification highlights increased volatility and serves as a warning sign for investors.
Future Price Projections
Looking ahead, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, stated, “Initially, as gold prices climbed, jewellery stocks like Senco Gold saw a boost due to anticipated advantages from their inventory. However, after a prolonged bullish period, the market corrected, leading to selling pressure on Senco Gold and other jewellery stocks.”
He explained that while a dead cat bounce was anticipated, the fundamentals of these jewellery companies remain solid. “Currently, Senco Gold’s share price is testing the 20-day EMA at ₹300. A successful breakout above this level could push prices towards the 50-day EMA at ₹379, which also coincides with a bearish gap. Therefore, the ₹375 to ₹380 range represents significant resistance,” Jain added.
Conclusion
In summary, while Senco Gold is experiencing a short-term recovery, caution is advised as the broader market trend appears weak. Investors should stay informed and be prepared for potential fluctuations in the stock’s performance.
