PC Jewellers

(Novice VP) #478

Hi, thanks for pointing out.

Actually, it is not off balance sheet. It is shown as trade payables worth 3,622 cr. as of q4 2018.

It is basically gold loan. Not 100% sure about this, but positive. Experienced guys can help clarify this.

So basically, we thought that the implied interest rate was too high ~30% as we did not consider a/c payables item in the denominator as usually it is non interest bearing liability. But in this case it is interest bearing as pointed out by the management and hence should be included. Actual implied interest rate is about10%, which seem normal.

(skhanbir) #479

Could you please share the link to conf call audio ?

(Novice VP) #480

Pls listen to this at Research Bytes…

(Novice VP) #481

Looking at the market reaction, it seems the market is pissed that the company did not disclose a definite timeline or roadmap for the buyback. If there is an expert on buybacks in this forum who knows the regulations around it, please feel free to enlighten us on the process. How much time does it normally take to be executed? what are the necessary approvals etc.

(jainnitinp) #482

Quarterly results have been quite good despite a 20% decline in industry due to high gold prices. Dqomestic growth is strong at about 12%only reason they are slightly subdued is the decline in exports of about 45% due to factors beyond the company’s control (5% excise duty and 5% vat). 5% vat has been removed recently. Also, the company is trying to overcome the decline with aggressive growth plans in the domestic market by opening 30 new stores this yr. Outlook looks quite promising.

(xaxa33) #483

I guess these guys have just lost trust. If you look at the numbers (and these are audited and the auditor has not yet resigned!) they are not bad. At these valuation multiples and the quality of balance sheet, and the overall macro trend around value migration to organized retail etc, in an ordinary course PCJ, would have been a straight buy if not a screaming buy. But people have this fear- that what they are seeing in numbers and hearing from management may not be accurate or complete. The way things are this is going to be a very slow grind one way or the other- at least till the buy back actually happens; that is if it happens!

(yudiagg) #484

Do we have any facts regarding any wrongdoing by PCJ ? There is nothing by SEBI or on BSE/NSE sute.

(xaxa33) #485

No nothing. All of this is perception but then perception is stronger than reality. It all started off with the Vakarangee episode and they got tainted with association. Then the gift business and they never unequivocally said what happened with those shares. They said it is a private matter and hence they will not comment- of course elder brother gifting to his daughter in law is private but then they of course know what happened to those shares. Then the Fidelity sell. So people are linking events and thinking how can so many things happen together- and there is overhang of Nirav and Choksi et al.
They have addressed things to an extent in the mgmt presentation (especially about the debt and the cash part) but the tone could have been more direct and forthright. For instance instead of saying buy back would be completed shortly- that it would be completed by let say July 15th. That instead of saying we would repay the loans shortly; that we would pay off XX by date YY- stuff like that. I think both Mr. Sanjeev and Balaram can benefit from some adult advice as regards investor communication :slight_smile:

(Novice VP) #486

Agreed, though they gave a faint deadline on the debt repayment. They said it should be paid off in the next 3 months, if i recall correctly.

(Novice VP) #487

Market can be really moody/ irrational at times. Why would a company doing fraud would pay cash taxes of ~200 cr. on PBT of 736cr, and also plans to repay all of their o/s LT debt. They could have cooked books to evade tax and continued paying interest on the debt, if they didn’t have real cash in the company.

(Varun) #488

Over the years, I have learnt that We must give respect to market, unless very very sure about one’s research, company’s business & management.

Regarding why should a company pay cash tax and all that, same was the case in Vakrangee, Satyam etc…

Disc: Not invested.

(jainnitinp) #489

One thing that needs to be considered - if the company did not really want to go through with the buyback why would it appoint IDBI (a central govt. institution) as the merchant banker for the transaction? It could have very well appointed some pvt. company. And the fact that IDBI (again, the govt. institution) is working on it, I’m not surprised it’s taking time! :slight_smile:

(svasa13) #490

PCJ presentation and newly opened show room snapshots.

(Growth_without Debt) #491

Good presentation and con call clarification.
Vakrangee promotors also initially defended a lot with frequent clarifications and presentation on capital allocation plan, buy back dividend policy etc but till now no reversal. 39ee0352-6d1f-4942-a99f-caa59d5e28ab.pdf (602.6 KB)

Hope, this should not get repeated with PCJ.

(Gothamcapital) #492

Why isnt pc jewellers suing vakrangee for price manipulation?

(ranviraaj) #493

Can any one please clarify if PC Chand Jewellers is also part of PC Jewellers?
I see a PC Chand Jewellers showrooms nearby my area, in Kolkata?

(n2n) #494

PC Chandra Jewellers is completely unrelated to PCJ. The former is a much older jeweller with major presence in Kolkata and some other cities like Bangalore. On the other hand the listed company PCJewellers is a relatively new company.

(Saurabh Maheshwari) #496

Most of them are amongst the largest algorithmic traders active in India. You will consistently find these names in all stocks which see a spurt in volumes. Particularly those stocks which are in F&O. Additionally, you will always find them in bulk deals and not block deals. Bulk deals are those wherein a single entity has traded >0.5% of equity shares in a single trading session. (This definition might be old). Need not be a single trade but a single trading session.

I have only one question for PCJ management. Why didn’t you go for an open market buyback?

(jajushobhit) #498

Tender offer is more tax efficient for the seller as stt is paid when he tenders shares. Further, retail benefits as 15% buyback size is reserved for them.
Disc: not invested

(Rohit) #499

have they fixed any date for buyback ?