I think we now have sufficient information one after the other happening in PCJ to make an educated guess of how deep the hole is. Vakrangee including PCJ as partner, then buying a whole bunch of shares. Stock raising 4 fold for no reason. Promoters offloading a bunch of shares gift or otherwise. Directors with shady background and no relevant experience to justify their appointment, buyback fiasco. merely looking at the number of shares traded and wild swing in prices over the last few months. Gitanjali stores being converted to PCJ stores. If someone is still holding this, please recheck your conviction.
@Susindar as long as they are playing with the share price I am okay. Because then I am sure the downtrend will stop somewhere and convert itself in an uptrend whenever they want to. My worry is if they are playing with balance sheet and in general all sorts of fundamentals presented to public share holders. Like say cash on balance sheet, trade receivables etc. In that case there is no end to this downtrend and no hope of an uptrend. Price manipulation happens in the bluest of the blue chips so I can ignore that. As per balance sheet PCJ is a clear buy. I am hesitating because I am not sure of the promoters and it is a bad idea to average down. regards,
Interestingly when the gifting started in 2017 March no one cared. Rather it was at Rs. 200 then and made its mad dash to 600 from there. I was not on this board then but would like to go back and see if any one raised any questions. This fall because of gifting looks very manipulated as things had started 1 year back.
I am invested mainly because of no promoter pledging and manageable debt. All Indian companies get into trouble due to promoter pledging and leveraged balance sheet. If there are sales and debt manageable, EPS takes of itself over medium term.
Disc: Invested. Started trading FNO at about 180 (during last bout of volatility) and now invested in cash at 130, though averaging for earlier FNO profit maybe about 110.
@neopandit . Buy a PE at 50, will help for results season.
It’s not only gifting issue but also it’s link with vakrangee
From what I gather, Buyback did not seem such a good idea for the Company financials. So, its cancellation should be a good thing? For the company and investors?
With a 12% (or lower) buyback ratio, trying to factor the buyback premium into the price was, for the large part, just bad maths anyway.
Discl: 3% stake in PF, was 12%, invested since 1st week of May 2018, sold off in 1st week of July. Share price seemed like a bad joke with the incredibly high volumes, more like a gambling counter.
@vikas_sinha Yes, cancellation of buyback is a good thing because for the amount being spent, not enough shares would have got extinguished. So, from whatever I calculated it would have reduced the EV per share for the remaining shareholders. A disclaimer here I am very new to these calculations and have no education in it. I went with what I felt logical way of computing.
Having said that and again IMPO the current down fall is not because of fundamentals of the sector, or the company. I have two possible explanations for the current fall in price.
(1) Since the downfall is across the market with few exceptions, one explanation is that certain market participants are forced to liquidate their positions regardless of what they are liquidating and at what price. These participants are smaller FPIs (carry trades getting reversed), LIC (to fund purchase of junk like IDBI Bank and Air India), and Govt of India (mostly to meet divestment targets and contain fiscal and current a/c deficit).
(2) Company specific problem is trust. All the numbers in public domain are good. But no one is believing them. The management is doing precious little to address the problem. This gives birth to the suspicion that management is hand in glove with or is in itself the bear cartel. For example, falling promoter share holding (from 68% to 57% over the year) is a cause of concern and fertile ground for rumours then the management should have declared the latest share holding pattern by now. Almost 900 companies have done this by now. Waiting till the stipulated 21st day makes life easy for bears. Company gets weekly update of all the share holders so this is quite easy. A little difficult but not impossible was to publish the Q1 results by now. That would have quashed the rumours about company not having cash in banks (although March results show 1000Cr plus) but company has not even announced when it is going to declare the results. Buyback cancelled was a good idea but who on Earth will buy the clarification that bankers were “appreciative of the company reducing exposure to banks”?? So the suspicion is not without a reason.
As I wrote earlier I am okay if the management is playing with the price (lesser evil). I hope they are not playing with the financial statements. I hold 1500 shares at average of 130 There are no FnO positions. regards,
Check treehouse, no promoter pledge, no debt. The only point I am highlighting is only these two may not guarantee that it is totally safe. Treehouse had enough red flags to highlight without debt and pledge also it was a trap. So, a detailed analysis of PC AR may highlight. Note: This has nothing to do with PC Jeweller as I have never studied and hence would not like to make any positive or negative comment without a reason
So one more fund exits today. Wellington Mgmt Co sold around 37.5 lac shares @ Rs. 85.43/share.
there was a time when gitanjali owned the highest no of stores may be around some 5000 thousand globally but now as the company is not functioning and most of their store was franchised so these franchisee are now moving to other brands which may be a good step for pcj given franchisee local connections
gitanjali gems cheated their franchisees(by overvaluing the inventory provided to franchisee), many franchisees of gitanjali gems filed complaints against the company, now these franchisees are moving to other brands
tanishq also operates by taking gold on lease, under the gold on lease scheme price of gold are fixed on day of sell is made to the customer so it provides a natural hedge against the gold price fluctuation and this time period for which the gold is held is called credit period and company has to pay a 3% annual interest rate for the entire credit period
Thanks for explaining the credit period and the concept of how the Gold price fluctuation is hedged. Currently Silver is 1% down on MCX and Gold is down too. I was not sure whether price of Gold/ Silver affects the jewellers in some way and if yes, how? Now it is clear that at a hedging cost of 3% p.a. they are immune to the price fluctuations. Under such consideration I believe a lower price of Gold helps increase volumes and the interest costs will reduce drastically as the turn around time is short. Please correct me if my understanding is wrong. Thanks, Regards,
According to an article in Hindu,
“Demand for gold jewellery has been stagnating in recent years, according to World Gold Council data. While 2,043 tonnes of gold was consumed by jewellery makers in 2010, that declined to 1,988 tonnes by 2016. Gold jewellery demand peaked in 2013 as consumers used the fall in gold prices to buy in. But all the major gold-consuming countries, including China, India, West Asian countries and the Americas, have seen gold jewellery consumption decline after peaking in 2013.”
Even in India people now NOT buying gold as investment but only for use/ornaments. This is change in Indian culture also.
Thanks for the numbers.
My remark was of qualitative nature.
From your numbers I see -
(1) 2043 - 1988 = 55 Tons. That is 55 / 2043 = 2.75%
(2) 2016 -2010 = 6 years
(3) So, less than 3% decrease over 6 years.
(4) That decline when the World moved from financial chaos to false sense of security and stability is at least as good as constant (SadaBahar) to me.
(1) For their investments smart, educated people moved from Physical Gold to paper Gold (in various forms). Good luck to them.
(2) I like that trend as there is no crowding / competition for me in buying physical Gold.
Shareholding is out. Where is the problem ? I think we should lap it up.
Retail share holding seems to be up by nearly 10%. But things must have changed after the cancellation of buyback. Has the retail holding increased even further ? Or, the retail sold in panic and informed ones lapped up ?
Compare with earlier qtr - promoters and MF holding reduced and please note that this is up to Jun 2018 and does not reflect July 2018.
Why did promoters sold stocks after declaring buyback? Did they utilize the opportunity and fooled retail shareholders?
The promoters didn’t “sell”, they “gifted” to “unknown” relative, If I’m not wrong, the recipient is the promoter’s daughter-in-law, in all the probable that gift was encashed. That’s how everything unfolded.
I see following entities completely exited:
- Mawer Investment
- Stichting depositories
- The wellington trust (they invested in some of the prominent names: Glenmark, TTK Prestige, also has controversial names: PCJ, Vakrangee)
No change: IDRIA Ltd, LIC
From the public and owner shareholding, there appears to be a high probability that at least a major part, or all the gift, given to the daughter in law were sold, as her name does not appear in the list of those holding more than 1 % shares.