This beaten down stock of a jewellery company has zoomed over 100% in July

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Shares of PC Jeweller (PCJ) were locked at 10 per cent upper circuit band for a second straight day, at Rs 47.35, on the BSE in Friday’s trade on heavy volumes. The stock of the jewellery company was trading at its highest level since June 2019.


Thus far in July, the stock has more-than-doubled, rising 106 per cent from a level of Rs 23 hit on June 30, 2022. In comparison, the S&P BSE Sensex was up 0.77 per cent during the same period.


Till 11:18 AM, a combined 13.6 million equity shares had changed hands and there were pending buy orders for 1.03 million shares on the NSE and BSE, the exchanges data shows. The stock had hit a record high of Rs 601 on January 16, 2018. It tanked to an all-time low of Rs 7.80 on March 25, 2020.


PCJ, on July 11, clarified to the exchanges that, at present, the company is not having any such information, which may have a bearing on the price of the scrip and requires disclosure.


PCJ is engaged in the business of manufacturing, sale and trading of gold and diamond studded jewellery as well as silver items and offers wide range of jewellery including 100 per cent hallmarked gold jewellery with a focus on certified diamond jewellery and jewellery for weddings. The Company operates in different geographical areas i.e. domestic and export sales.


For the financial year 2021-22 (FY22), PCJ’s revenue from operations declined 41 per cent year on year (YoY) at Rs 1,574 crore from Rs 2,669 crore in FY21. The company’s earnings before interest, taxes, depreciation, and amortization (ebitda) margin stood at (2.8 per cent) as compared to 16.2 per cent in FY21.


PCJ said the decline in the turnover has been mainly on account of restriction in operations and liquidity constraints after becoming NPA. However, the situation has now improved with a positive effect on company’s operations.


“The company has submitted its resolution plan to its consortium lenders and they have agreed to move ahead with processing the same,” the company said in its March quarter business update.


Liquidity of the company continues to remain stressed as reflected by overutilization of the fund-based limits for more than 30 days. Average fund based and non -fund based limits of the company have remained almost fully utilized and average of month end utilization for the past 12 months ending May, 2019 stood at 91.13 per cent, the rating agency CARE Ratings said in March 2022 rationale. CLICK HERE FOR FULL DETAILS

Further, significant erosion in its market capitalization since the beginning 2018 had a weakening effect on PCJ’s financial flexibility and its liquidity. The market capitalization of the company reduced significantly from Rs 12,606 crore as on March 31, 2018 to Rs 3,256 crore as on March 31, 2019 and further to Rs 1,015.34 crore as on December 31, 2020 and Rs 930.81 crore as on March 25, 2022. Currently, PCJ market cap stands at Rs 2,204 crore, the BSE data shows.

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