PCJ Share Price - 2019 to 2020 (Full Analysis)

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An Introduction to PC Jeweler
PCJ Share Price Analysis

1. An Introduction to PC Jeweler

PCJ share price refers to the share price of PC Jeweler, a company that currently engages in the manufacture, wholesale, export, and retail of gold and diamond jewelry in India. The Company sells hallmarked and certified jewelry.

Company Board of directors recently announced a share scheme of buying back to arrest the fall of their shares in the market but later reversed their decision, which led to massive loss of wealth to its shareholders.

PC Jeweller has 86 stores in 70 cities. The Company procures a significant portion of its gold under the Reserve Bank of India‘s Metal Loan policy. PC Jeweller had its primary public offering in December 2012. As of then, the Company planned to open 20 stores each year and start opening franchise stores.

To efficiently understand the PCJ share price analysis, it is first critical to understand what the term Share Price means. A share price is the price of any single share of several saleable stocks of a particular company or other financial assets. Plus, the stock price is the highest amount an individual is willing to pay for the stock. Stock prices are determined by matching the buy and sell orders. Stock prices are determined by matching buy and sell orders. Each buy order is an offer to buy a certain number of shares for a specific amount, called a bid. Each sell order is an offer to sell a certain number of shares to a particular price called ask.

Shares of PC Jeweler NSE, which was 4.91 %, hit an all-time low of INR 22.25 in trade-in December 2019 after it informed the sources that rating agency Crisil NSE -2.40 % downgraded the long-term and short-term ratings to the bank loan facilities of the Company to CRISIL D.

Earlier, shares of the Company opened at INR 24.70 and hit a high and then a low of INR 24.75 and INR 22.25, respectively.

The same has been reflected in the fact that the liquidity profile of the group has deteriorated in the past few months on account of cash flow mismatches.

The ratings reflect the instances of LC devolvement and overutilization in limits of working capital, and its large requirements with the risk of unfavorable regulatory changes. These weaknesses are partially offset by the PCJ group’s above the average capital structure and are especially helped by its strong market position in manufacturing.

The situation changed with the onset of the festive season from October 2019 onwards. The cash flows started, and the Company by the end of November 2019 adjusted 90% of the devolved standby letter of credit (SBLCs). But there was no further invocation of any SBLC.

The Company also clarified that there was no increase in the absolute amount of working capital limits even after SBLC invocations, and there was only an intro facility exposure mismatch. There was no increase in the bank borrowing of the Company, and there was also a decline of INR 248 crore between March 1, 2019, and September 30, 2019.

The promoter of the Company had infused INR 215 crore of his funds in the Company to improve its networking capital.

PC Jeweller has informed the sources that in terms of the Company’s Code of Conduct to Regulate, Monitor and Report Trading by Insiders, the Trading Window for trading or dealing in the shares of the Company will remain closed with effect from January 1, 2020, for consideration and of un-audited financial results of the Company for the quarter and nine months ending on December 31, 2019. The date of the re-opening of the Trading Window will be notified in due course of action.

The above information is just a part of the Company’s filings submitted to BSE.

PC JEWELLER LTD. has also informed the BSE that the meeting of the Board of Directors of the Company is scheduled on February 13, 2020, among other things, to consider and approve the un-audited standalone and consolidated financial results of the Company for the quarter and nine months ended December 31, 2019.

Share of PC Jeweller has lost 63.77% during the last one year that is 2019 and fallen 73.59% since the beginning of this year, that is 2020.

The micro-cap stock has lost 19% in four days.

Citing the weak liquidity profile of the jewelry firm, Crisil said, that the downgrade in the rating factors in the instances of devolvement of Letter of Credits (LC) and overutilization in working capital limits for more than 30 days. The same can be seen from the fact that the liquidity profile of the group has degraded in the past few months on account of cash flow mismatches and unaccountability.

But, the PC jewelry firm in a clarification said, “Indian jewelry demand during Q2 in 2019 at 101.6 tonnes was almost a third lower than the past years during weaker consumer sentiments towards the brand, and there was a decline of nearly 51% in Indian bullion imports on Q-o-Q basis.”

Even if we follow the current situation, the share price is 18.25 INR- 1.05 BSE live.

The share price in the stock market keeps on fluctuating. Some people and companies would still prefer to invest in the brand for its reliability and high name among the market plus stake holders. This renowned brand had a fantastic start alongside a journey of highs and lows but still is functioning at the top.