Export unit was a big black hole to hide now with this merger they can write off the losses …un reliable company
My previous post in this forum pertaining to export sales
If the exports receivables figure do not reduce substantially as per above calculation then in my opinion the reasons can be :
a. The receivables are not realisable and the company will have to provision for it.
b. Another possibility can be that the company might have made export sales to related parties and through them they would have made some overseas investment.
For example : Assuming that the ideal realisation period for exports is 90 days but the company gives 180 day credit period :
For Export Sales : 3600 Cr
Case 1 : Credit period 180 days
Recievables = Rs 1800 Cr
Case 2 : Credit Period 90 days
Recievables = Rs 900 Cr
So if the industry credit period is of 90 days and if you show it as 180 days for your buisness and the exports are done to related/known parties, you will have additional Rs 900 Cr to make overseas investment.
This might be one of the reason why management has to continue showing export business to hide its overseas investment.(My assumption) .
The management should un ambiguously confirm that all recievables outstanding as on 31/12/2018 pertain to sales made after 30/06/2018 only.
Disclosure : Not invested but tracking for knowledge.
That being said, this is still an intriguing situation for a bottom feeder (‘deep value’) investor. The domestic business has a normalised EBIT of ~Rs.800Cr with the usual tail winds behind it. Probably this could be conservatively valued at Rs.8000Cr.
The export business is still an enigmatic blackhole, as rightly said above, an even if all receivables were written off completely, the remaining value with the company would be Rs.6000Cr.
I did not understand the one time discount given. It is of around 500 crores. Still the trade receivables did not come down. It is mentioned that they have exported around 740 crore in Q4 alone. Also the demerger is expected only by 2020. Is there any past or present commentary from the management about why the money overseas had gone bad? Have they stopped dealing with such players.
Without an iota of doubt this a clear case where the promoters are diverting the fund and calls for an forensic audit. I think for retail investors there are other good stocks to invest rather than gambling in this stock.
The hope here is that the domestic sales and operating numbers are what they say they are…Unsure why promoters would do things that only hurt them (more so than minority shareholders). Wonder why they didnt bother to face the investors (concall) post the results this time. Either way, I am terribly disappointed with recent management acts/non-acts.
Sachin Gupta, son of Padam Chand (PC) Gupta has been constantly selling shares. PC Gupta had gifted some shares last year when there was a huge uproar. Given that he passed away recently, I assumed that it was largely for estate planning. However, Sachin has sold more than 10% of his stake in the last 3 months. Something is definitely going on between the two families (PC Gupta’s family and Balraam Garg’s family). Sachin Gupta was the VP of Gold Manufacturing as per a report in 2014 but in a similar report in 2016, he wasn’t mentioned in the top management. I followed up on this with the company secretary and I was told that Sachin Gupta has not been a part of the Company’s management team since more than last 4 years.
This was my worst investment ever. The fact was that I was invested in this company since a long time before the issues came up. Total Loss was about 50% of my invested value. Including opportunity cost, it was much higher. However, I was sitting on a good profit and should have exited and then asked questions once the issues arose. But kept delaying and attributed it to market overreaction and didn’t see a point in exiting at even 300-400. Finally exited it around 110. My purchase price was about 220 (somewhere in 2016) and has some volatility till the run up too 500+. I felt terrible about this whole episode. Don’t really feel like tracking this company anymore. Personally never knew anyone who bought anything and had seen the shop mostly empty. But always thought that some “elite” people may be shopping high value items. Now I am seeing the investor presentation.
The fact is that I will never invest in this company even if they have become “honest” now.
Was just following PCJ out of curiosity.
This is an insider trading probe update from SEBI from Dec 2019.
Blockquote
A. A sum of ₹6,17,60,184.13shall be impounded jointly and severally, from Shivani Gupta, Sachin Gupta, and Amit Garg, being the notional loss avoided on account of trades carried out in the trading accounts of Shivani Gupta, and
B.A sum of ₹2,13,23,161.64 shall be impounded jointly and severally, from Quick DevelopersPvt. Limited and Amit Garg, being the notional loss avoided/gains made on account of trades carried out in the trading account of Quick Developers Pvt. Limited.
SEBI had issued a show-cause notice dated December 17, 2019 to some entities including certain individuals
belonging to Promoter and Promoter Group of the Company i.e. Shri Balram Garg (Promoter), Shri Sachin Gupta
, and Smt. Shivani Gupta (both belonging to Promoter Group) alleging violation of certain provisions of the SEBI
Act, 1992 and the SEBI (Prohibition of Insider Trading) Regulations, 2015. Now, SEBI in its final order dated
May 11, 2021 passed the following directions against them:
restrained them from accessing the securities market for a period of one year and from buying, selling or
dealing in the securities of PC Jeweller Limited for a period of two years;
Shri Sachin Gupta, Smt. Shivani Gupta and one other individual (other than Promoter and Promoter
Group) are directed to disgorge, jointly and severally, a sum of Rs.6,17,60,184.13/- which was impounded
by Impounding Order passed in this matter and the same shall be credited into the Investor Protection and
Education Fund; and
imposed penalty of Rs.20 lakhs on each of them.
Good to see SEBI showing some tooth and the culprits paying up.
