PC Jewellers


(LTInvestor) #234

To be fair to PCJ, I really cannot see much dirt in the financials. My bias is restricted to one lot of F&O at 210 protected by 150 PE, so max loss of 70. So maybe I will be happy if it goes to the dogs today again. But coming back to the financials:

  • Cash tax of 189/139/128 crs over the last three years.
  • The company shows interest income on deposits, so cash balance is not fake.
  • For march ending 2017 (year of demon), no abnormal increase in sales or receivables (something which should be there if there were fake sales?)
  • There is a sharp increase in the purchase of stock in trade. Do not understand that much. Are those wash transactions (buy from another jeweller and resell it with wafer margins)? Maybe.
  • No increase in debt (rather decrease in 2017 from 2016). Cash of 822cr
  • Really not gone into days receivables analysis. Not worth for 1 lot.

Thinking of adding in cash today.


(Pankaj181) #236

Brother reputaion of mgmt & their actions are more important during time of crisis here i see none.


(LTInvestor) #238

In Indian context, in time of crisis only three things really matter…A.) Do they have cash flows and are they real? B.) Are there are pledged shares C.) Are they overleveraged with debt payments in near short term.

If you are clear on these three you will have a hard time finding a share which has totally collapsed. Not saying this will not be down 25% again today, but you can short a decent stock only that much.


(Pankaj181) #239

As per your First two lines one name comes to my mind Vakrangee. All ingredients where their in this company but than also everyone knows what happened. They spoke on Buyback & its more than a month & no talks on buyback by Vakrangee.

In PC Jeweller case what bothers is to whom where the shares gifted ?? may be latter on we get to hear its some one from Vakrangee mgmt.

My thoughts only . Dont take them seriously cozz if after May 25 the share reaches 1k than u will abuse me .LOL


(shyamutty) #240

PC Jeweller
To Consider Buyback on May 25th
MCAP: 7015 Cr
Networth (Sep-17): 3642 Cr
Cash, Bnk & Crnt Inv (Sep-17): 1398 Cr

How Much Can they Buy?
With Board Approval: 364 Cr
With S/H Approval: 911 Cr


(Pankaj181) #241

Its all mgmt milla bhagat.

If u see none of their stores are in Mumbai. This what makes me doubt on them. Their one new store is in pune & other in Nagpur. But how come a Jewellery seller doesnt have any outlet in Mumbai or Navi mumbai might be scared of Titan.


(LTInvestor) #242

@Pankaj181…Haha no hard feelings in the stock market. You marry a stock, you divorce your wife.

But to my defense, in case of Vakrangee, my feeling is that the cash flows are not real. Maybe real, but politician money moving in and out. In this case unless every second piece of jewellery sale was non-existent and every second store in non-existent, difficult to see how the cash flows are fake.


(Ashwini Damani) #243

Can we try to point out , what Red Flags were there…What all should we have been careful of


(Pankaj181) #244

U may be right with ur views. But I am still not confident with PCJ mgmt . For me the biggest red flag was selling of shares by one of the promoter Krishna Devi that too 10lakhs just few days before the Gifting story started. It clearly means she knew something. And at present her holding is NIL.

Have you ever" heard of anyone saying shaadi may jwellery PCJ se liya hai"

I heard of PC Chandra jewellers but about PCJ i heard only in Forums or in media news.


(Mridul) #245

Some basics -

As pointed out by @phreakv6, even i find sudden rise in CFO in 2017 just after demo intriguing. Working capital requirements suddenly turned around (became positive) completely…all receivables received all of a sudden! Cash rose from 300 cr -> 1120cr. :wink:

Reg financials, 10 yr cPAT (2500 cr) vs cCFO(640 cr). That too aided by demonetization (839 cr in FY17) a big red flag!

Another related point is it’s huge receivables, which they say is because of exports business. Why a B2C company got this kind of receivables? In comparison, Titan got not much receivables! Are the profits real? Why would a company, which claims there is such huge market domestically with superior B2C margins, even try going for exports with these kind of receivables?

My jeweler friends had intimated about wrong practices that were prevalent with this brand. They never spoke highly of the promoters or its products. Many of them have been dealing with PCJ from last many years.

Share gift to non promoter #Hindsight bias

When both scuttlebutt and financials puts question mark on corporate governance & mgmt, i tend to stay away from such companies. One must look beyond numbers. Scuttlebutt helped me stay away from many value traps such as Kwality, Vakrangee. One should always look for ‘quality of earnings’ rather than ‘mere earnings’. Promoters must be ethical, else would destroy shareholder wealth in long run.


(manivannan.g) #247

Any idea why these guys does this ? Seeing Way2wealth doing this since last week.


(LTInvestor) #252

To be sure, Titans CFO also went from 598cr to 1790cr from 2016 to 2017. So the jump in CFO in 2017 is not unique in PCJ. Surely you are not saying Titan also did some demon hera-pheri.


(Pankaj181) #253

nono u are getting me wrong. i am aware of the cfo going from 598 to 1790cr

i wrote for titan cozz only of its better brand recall value .
also see the dividen payout over the last few years & compare it with pcj .


(srikanthg) #254

per March 2017 balance sheet, Cash and bank balance is Rs 1,191.68 cr. If half of that will be used for buyback of 10% shares(looks like stock price will stay in lower levels till then? it will be a confidence booster. But not sure about current cash position ?


Disclosure : Interested, never invested.


(LTInvestor) #255

Just thought will do some 36000 feet comparison with Titan. All numbers are from moneycontrol, but looks good. Did check few with reports.

  1. OCF/EBITDA %s do not differ substantially. Also you have to keep in mind PCJ grew by 102% vs 25% from Titan.
  2. Dividend payout if lower but again not substantially lower, adjusted for the expansion.
  3. Jump in 2017 is not abnormal for PCJ neither is the negative OCF in 2013-2014 when both had negative OCF.

To come back to my earlier point, there is a stink but does not look rotten.

Edit: Read OCF/EBITDA as OCF/profit. Incorrect labelling at my end.
TvsP


(jajushobhit) #256

I had pointed something similar, in my earlier post.


(atul1082) #257

Can you explain your observations a little more in layman’s​ manner for my understanding and the relationship between off and profit and your conclusion.it will help me to understand


(manivannan.g) #259

It’s finding good support at 150 range, lets see. If it closes below 120, then next stop is 100 :grin:


(shyamutty) #260

Had to exit the stock paying huge tuition fees, a good lesson learned


(sameer_patel18in) #263

This is completely disastrous. Can investors have to believe of PCJ’s management as they keep saying one thing that they don’t know why share price is decline so badly and they are keep giving this statement since vakrangee case. Now once PCJ will be ban from F&O then this share will start behaving like penny stock. Sometimes upper cirkit sometimes lower. Hard to reinstall trust of retail investors now. This type of fall causing great damage to company as well as investors pocket. SEBI have to take some stand in such cases. SEBI keeping mum that is also disgusting. No security of investors if such things keep happening with us.