PC Jewellers


(Cshar) #562

Have you done any analysis in all companies before comparing PCJ with Vakarangee & Kwality. Kwality has huge debt, will not survive. Vakarangee had market cap of 55000 cr, overhyped business model. PCJ is different case, management came up with buyback offer to salvage price in pressure of zee media. Credit ratings were downgraded by Crisil & care due to this cash going out from company. No need for buyback. It’s good decision, timing is wrong, management is not matured enough on process however they are masters in their field. Current price is discounting forward PE at 5, Sales to Market cap is close to 2, zero pledge. It will rebound soon.
Disclosure: invested


(cool_gaurav) #563

I need not to analyse and waste my energy when there are so many negatives. Also, there are so many good companies available at PE-5-10 dur to recent carnage in mid cap/small cap. Is it worth analysing when management itself acting irresponsibly/taking decision in haste to salvage the stock price? Sometimes, we get biased due to vested interest & even when things are crystal clear, we try to come out with one or other reasoning. We all are human beings and can mistake. Better to accept the mistake and move on when there is ample of opportunities… Best of Luck!


(atul1082) #564

I think we need to bring this evil practice to the notice of SEBI and suggesting that any buy back/cancellation to be announced with the approval of sebi and cancellation should invite action if the reasons for cancellation r not adequate/appropriate.


(atul1082) #565

Your calculations are based on books of accounts known publically but how authentic they are.Imo the books are cooked and issue with vakrangee was adjustment of black money routed thru so called export of goods.


(kapilgokharu) #566

Can we move joint complaint against the PC Jewellers?

Kapil


(atul1082) #567

I think separate multiple complaints on buy back and subsequent cancellation would b more effective.senior boarders may Pl give their views


(sameer80) #571

Which good company shares available at PE-5-10?


(sameer80) #573

bankers cant decide they can suggest only


(timedimpulse) #574

As someone who has been following PC Jewellers only since Vakrangee fiasco, apart from smoke and mirrors and myriad concerns, not one solid issue on the company has been substantiated or proven without doubt. On paper atleast, the fundamentals look same as before the rumor mongering began.


(LTInvestor) #578

Though sentimentally poor, I am not sure if this news is that negative. With the assumption that 1500cr of cash is actually there in the bank, if they repay all the debt and buyback 425cr of shares, the liquidity would have been severely which I think CareRatings highlighted.

Secondly, as a shareholder, I am happy that they did not use nearly half their cash to buyback shares at 350 when market price is at 125. Unfortunately we have such stringent norms for repurchase that companies cannot take fast reactions to a new level of stock price.

Disc. - Invested (protected by far OTM puts for black swan events), Not selling unless there is tangible news of wrongdoing. Anyone who has invested since 2010-2012 in midcaps will know such madness goes on regularly.

I remember IRB going down to Rs. 40 in 2013 when news of murder of the social activist came out. PCJ itself was at Rs. 48 at 4 PE.


([email protected]) #580

And now they have opened a new store in Deoria (U.P.)
bd9cc844-0358-4545-bd13-09d2694d3b17.pdf (287.8 KB)


(manivannan.g) #581

The same store was earlier Gitanjali Jewels.

image

https://goo.gl/maps/YhFqwzzDA4o

We had the same doubt for the previous store which they opened in Hyderabad as well.

Are the Gitanjali stores are being handed over to PCJ (PCJ bought them?) or what’s with this connection ?


(LTInvestor) #583

Think these are all franchisee stores which are changing branding from Gitanjali to PCJ. Not sure if it any red flag.


(Cshar) #584

It’s a good move, PCJ is capturing all domestic market of Gitanjali, all corporate governance issues will be forgotten in 2-3 months, our stock market is very generous. If we get a 2nd rank company with little poor corporate governance & trade at 8 PE. Always better to buy than buying Titan at 81 PE.


(rajeshaaidu) #585

Hi,
Now it has become fashionable to talk about management quality. However deciding management quality turns out to be even worser wild goose chase than price eqilibrium chase as here participant bias is itself catalytic and self-reinforcing.

I think Cshar is correct in pointing out valuation concern and negative bias created by quality of management issue.

We don’t use to feel pain when we use to give moneylife or gurus of multibaggers 1 Lakh as tution fee but we feel devasted and idiot like if we use to loose 50k in some stock. If you are not selling and holding to your position maybe chances are there that you will recover your money even in PC Jewellers or Manpasand or even Vakrangee, however tution fee is a permanent loss of capital. Most of the people in Vakrangee has lost money because of Valuation and not anything else.

Buying at wrong prices (except in few cases) will mostly turns out to be a bigger crime than cigar butt investing. If anybody is sure about earning potential of the company for 3-4 years go and buy all these nonsense about management quality will evaporate with one good dividend announcement. Only rational that can be given is alternate good (WHAT IS GOOD TODAY WILL REMAIN GOOD IN FUTURE???) stories. But this rational use to apply for people who are not invested not for people who are heavily invested. So, please don’t create panic without any proof. Better than this walk to PC jewellers store in your locality and talk to their staff and management.

Upgoing stock and its management is like GIRLFRIEND, “SPOTLESS, MOST BEAUTIFUL, ENTERTAINING AND THE BEST” whereas downgoing stocks are like WIFE, "FILLED WITH MISTAKE, LEAST BEAUTIFUL, BORING AND TORTOUROUS":grinning::grin::stuck_out_tongue_winking_eye:

Disclaimer: Not Invested


(bharat19) #586

One simple observation: Company has 700 Cr of debt and 930 Cr of Cash and Bank Balance. Why the hell company do not clear the debt. One reason can be that the Cash is not real. Also no details in AR about banks name where the money is deposited.People who hold this share can be biased and do not want to hear anything negative but unfortunately truth cant be denied. 1275 Cr of receivables is also a big concern.


(bharat19) #587

Just a Comparative Analysis between two companies offered buyback recently after fall !

  1. DCM Shriram : Stock fell more than 60% from its peak and reached near Rs 270 , Company announced Buyback to the tune of 250 Cr from Market Purchase and is now constantly buying shares from market to keep price stable . Company will buy more than 50 Lakh shares over 1 year and that will surely help keeping the trust of investors. Current Price : 330 ! Summary: Investor Friendly , Cash is real
  2. PCJ : Stock fell more than 70% from peak . Company announced buyback to stop the fall but the stock kept falling even after the announcement. Reason can be that people may be aware of cancelling of buyback in advance. Investor Unfriendly , Doubt on real cash after Cashback withdrawn. CMP: Rs 130
    Disc: No holdings in both the above Companies , Just for academic Purpose.

(Devaki Nandan Tripathy) #588

Share price appreciation is the effect of the well managed business, not the cause.

Option is simple - Stay invested if you believe cash is real, dump otherwise.

Disc. Tracking, will invest in mouth watering valuation only.


(bharat19) #589

I was doing a comparison only regarding buyback offered by the two companies after that fall. Promoters buying / Company buying is often seen as a positive by the market. Yeah , no doubt , the business should do well but the management behavior towards investors is equally important.
Disc: No investment , No interest


(Nitin) #590

Trying to put myself in the management shoes to get my head around this new development. While cancellation of buyback and giving a reason like bank not giving NOC is very bad but if I was at Mr Gargs place what would have I been thinking (a BIG IF that all that has been said by co so far is factually correct)

  1. I got hit because someone- read Vakrangee- mentioned my name in their presentation and then bought 20lakh shares of mine. Could I have avoided that - NO.

  2. A non active promoter gave 2% shares to relative - for whatever reason it may be. First investors don’t know for sure weather those shares are actually sold, it’s just speculation. Second even if I had to sell and I knew sentiments are bad, I would have either done sale right after Vakrangee purchase (when stock went up) or would have waited for things to stabilize.

  3. auditor has not resigned in case of PCJ. In this season of so many resignations this is a saving grace.

  4. I promised to buy back at 340, prices are 120. Does it make any business sense to buy something at nearly 3x the price? If we thought of buying a car at 3X price but the prices drop to X, will we still pay 3X? Banker might have just told him that - look I appreciate you trying to do this but it doesn’t make sense. Share price may have short term reaction but in longer term this is a much better decision and if you keep doing of job well, prices will recover eventually.

In summary, some of events might have been bad luck (Vakrangee purchase), some might be stupid action (gifting) and but not to buyback is prudent.

Key things to watch out will be how much debt they have reduced in this qtr.

Nitin

Disc: holding and biased.