This article presents the same analogy that PC jeweller being a big organised player can benefit from all these events but also says it’s a high risk bet
Conference-Call-Transcripts-February-2-2018.pdf (56.8 KB)
PC Jeweller Concall transcripts of 2nd Feb 2018
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FPIs are still buying PCJ.
Amid all the chaos that surround the jewellery sector, PC jeweller opens 5 new show rooms.
how come the equity share capital has gone up from approx 180 cars to 430 crs. If new convertible preference equity has been alloted to fidelity group then what is the conversion rate? Any details on this?
Though market is up in last 3-4 days and many stocks recovering , this is still going down…trading at approx 50% discount from 52 week highs. Any news for weakness in stock price ?
Hows the growth outlook for next 1-2 years in Jwellary sector. After three years of subdued growth in 2015-2017 , it has shown 30% + PAT growth in 2018. Can we expect this to continue for next few years.
| Year | PAT | AVG Annual growth rate |
|---|---|---|
| 2012 | 230.93 | |
| 2013 | 291.02 | 26.02% |
| 2014 | 356.3 | 22.43% |
| 2015 | 378.43 | 6.21% |
| 2016 | 398.19 | 5.22% |
| 2017 | 421.01 | 5.73% |
| 2018 | 559 | 32.78% |
With a lot of bad news about few companies in general and vakrangee/pc jewellers specifically along with cases of sub standard with copper filled in, unreal stones jewellery sold by a no of known brand jewellers, the buyers would think twice before buying these items which are bought purely on trust.The latest being Kalyan jewellers wherein a message regarding wax filled jewellery sold at the price of gold and these are not small time names.Therefore people would like to avoid buying or go to brand like tanishq , pay higher price but be sure of quality
Figures look good but the point is whether they can be trusted.Similarly figures of vakrangee were also good, but market feels nos posted by them are fake
Does anyone here know people in the jewellery business? How is PC Jeweller’s reputation. Looks like we could get this seemingly dirt cheap in the next 1 year due to global and local market weakness.
Only issue is whether this company is a genuine venture or is involved in shady deals.
Can someone help me out with this?
My best mate is a jeweller and he is also a distant relative of PC Jewellers. He does not have a very good opinion of the group owner. As per him the company is in some shady deals that I can’t really point out now. This retail type of jewellery business has lots of tricks and shady movement involved in it. They are not truly truly professional type of people.
But my suggestion would be to stay away from PCJ in terms of LT investment.
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My 2 cents
Are we going to invest based on opinions expressed and risk our money?I will definitely not.If it’s so, it’s best to go with highly reputed groups .Secondly I had read quite a few of stories about Kalyan jewellers which has showrooms throughout the country.But the latest news about them has shattered by confidence on jewellery business all together.
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Questions remains to answer -
Does this means Indians do not purchase Jewellery ?
What are the best alternatives we have ? Tanishque
Disc : Invested less than 3% of portifolio
I do agree that the fall in the scrip is falling due to the bad news going around in the jewellery industry.
The fundamentals of the company are strong, it is growing at a rapid pace, and it is set to benefit from the shift towards organized sector, its the management of the company that the markets are questioning.
Mr.Market behaves in very strange ways at times. PCJ doubled from about 250 to 600 during the time frame from July to Dec 2017. In July the promoter holdings reduced from 66% to 60%, but the markets ignored the same. During that time, the promoters also issued bonus shares. Now as per the latest shareholding pattern, the stake has reduced by a further 0.26%, although one promoter has exited completely.
I believe in the management of the company, I do hope I’m not proved wrong.
I have invested in the company since 2013 when I just started investing. During that time as well the stock had fallen by about 45% from 131 to 70 and languished there for a while before the markets started seeing its potential.
I purchased this stock in IPO , 5-6 yrs back , since than market cap almost gone approx 10 times (@price approx 600)…On balance sheet , their is not much debt also…Recent advt. of PCJ featuring Akshay Kumar - Twinkle also looks pleasing to eyes…(though this doesnt matter much , but as a consumer I liked the Advt.).
Many Jwellary companies IPO which comes at similar time (like TBZ , TARA Jewels etc) did not performed much but PCJ is a outperformer when compared with them.
I have seen many Jewelry companies going in trouble in past few years (Shree Ganesh , TARA Jewels , Gitanjali etc). Seems like its a difficult business. But in the end , few players which have ethical mgmt.,strong balance sheet etc will survive but the question is does PCJ suits the criteria.
On Paper Balance sheet looks good (I know the basics not an expert in accounting , dont know if books are cooked ) and they have also said they did not have any relation with Vakrangee. We have not heard about any other scam related with PCJ (just like Kalyan jwellars had recently.) Than what makes you think that PCJ mgmt. is not good and its integrity is questionable. Please share your views.
I want to purchase more , but these questions and sector always make me confused and doubtful.
Disc : Invested
It’s very easy to be negative when news cycle is not positive. Not much has changed about the company since it’s highs apart from a chor company buying it’s shares from the open market. That alone does not warrant such a huge drawdown.
Of course everything goes out of the window if the books are cooked. However I can’t find any signs of that brewing up. No evidence of anything shady inspite of suspicion on many jewellers, explainable business model etc. Let’s see how the company comes out of this whole fiasco.
Promoters decreasing their stake between June and Sept is a concern. There is a lot of risk to this investment, however the valuation is attractive.
Disclosure: Bought at 300-330 levels. Views may be biased.
So Major risks which we can consider here are :
-
promoter shareholding going down from 66 to 60% (What is the reason ? have they diluted the equity ? )
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Any connection with Vakrangee or probability of any kind of scam ( but I would like to know what is the max impact it can happen on PCJ’s fundamental. Can it be wiped out like Gitanjali ? if they have any kind of connections with Vakrangee.
-
Cooking of books. Its v hard to find for normal people , sometimes even for accountants. Has anyone found anything suspicious here ?
I would like to add more but after getting some clarity on above points.
Thanks for your postings.The person who posted the issue on WhatsApp posted a copy of bill too.while we purchased some items from Kalyan in ncr about a year bank, it was found to be defective and on replacement, they charged us a higher gold rate, which should not HV bn done.we subsequently made complaint to their HO and finally they refunded the extra charged amount
Therefore these companies to a large extent ate not fair
The reason for the promoter’s stake reducing is that they issued CCDS and CCPS to two FIIs which got converted in September 2017. The other promoters who held small quantities have sold and exited. The two main promoters, still have the same holdings
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Promoter Padam Chand Gupta has ‘gifted’ 15 lk shares last week. Not sure how to read this transaction given what is going on in this stock.
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