logo
From a 90% crash to a 1,000% rally: Can PC Jeweller regain its shine?

From a 90% crash to a 1,000% rally: Can PC Jeweller regain its shine?

Indian Express3 days ago
In the jewellery business, trust is everything. Ask PC Jeweller (PCJ), which saw its fortunes plummet in 2018 after losing investor confidence and has spent the last five years rebuilding itself. Legal battles, irrecoverable payables, and short-term debt pushed the company into a deep crisis. But today, PCJ is attempting a comeback, step by step, trying to restore the trust.
On July 7, 2025, PCJ's promoters infused Rs 500 crore into the company by subscribing to fully convertible warrants at Rs 18 each, a premium to the June 30 market price of Rs 12.3. This sent the stock soaring 52% in the first week of July to Rs 18.7. The company will use these funds to repay bank debt, with an aim to become debt-free by the end of FY26.
But to understand the significance of this move, it's important to understand where PCJ went wrong and how far it still has to go.
PC Jeweller's Stock Price Momentum (2014-2020)
Between FY14 and FY18, PC Jeweller grew its revenue by 80% to Rs 9,610 crore, placing it alongside Kalyan Jewellers and Joyalukkas in terms of market share.
But everything began to go south after SEBI pulled up PCJ for insider trading in January 2018. The stock tanked 90% within 9 months. The promoters moved the Securities Appellate Tribunal (SAT) and then to the Supreme Court. Though the apex court overturned SEBI and SAT's ruling in April 2022, four years of legal proceedings had done much damage.
Legal troubles and weakened consumer trust pulled revenue down by 83%. The company reported a net loss of Rs 391 crore in FY22, with sales falling to Rs 1,605 crore, which were not enough to cover its fixed costs.
PC Jeweller's Sales and Profits FY14-FY22
5,325
6,361
7,301
8,464
9,610
8,672
5,206
2,825
1,605
378
1
-391
Source: Screener.in
The gems and jewellery sector operates like any other retail business, with pan-India stores. What sets them apart is the cost of gold, the primary raw material. India imports gold to meet jewellery demand, and the government imposes a customs duty on these imports. Jewellers also have a high working capital demand as gold is slow-moving, often taking 6–12 months to convert into sales.
When sales declined because of the pandemic and the legal issues, PCJ was left with unsold inventory worth Rs 5,667 crore.
PC Jeweller's Inventory from FY18-FY22
Inventory (Rs Crores)
5,258
5,012
5,944
5,667
Inventory Days
1,465
Source: Screener.in
Moreover, the pandemic resulted in export clients defaulting on trade receivables. Thus, PCJ had to borrow Rs 727 crore from banks to meet its trade payables, which increased its borrowings to Rs 3,283 crore in FY22 (from Rs 2,294 crore in FY21), and reduced its cash reserve to Rs 60 crore.
From a net-cash company in FY18, PCJ became a net debt company by FY22. Within six months, it defaulted on loans worth Rs 3,466 crore in Q2FY23 ended September 2022. At this point, short-term borrowings were more than its reserves, and cash was running dry.
PC Jeweller's Cash and Debt from FY18-FY22
Mar-20
Mar-21
Mar-22
Short-Term Borrowings
1,025
2,091
2,282
2,294
3,283
Cash Equivalents
1,556
322
178
60
Source: Screener.in
The creditors lost trust in the jeweller. The State Bank of India (SBI) (Rs 1,060 crore outstanding loan), its largest lender, initiated insolvency proceedings on PCJ in January 2023. Its two prime properties in New Delhi came under the SBI's control, and its inventory at a few locations came under the court's custody, disrupting operations. In FY24, the company's sales fell 75.5% to Rs 604 crore.
The 334% rally in 4 months (27 June-24 October 2022) after the Supreme Court ruling reversed after the bank loan default.
PC Jeweller's Stock Price Momentum (2022-2025)
In December 2023, despite reporting its lowest quarterly revenue of Rs 40 crore (down 95% year-over-year) and a net loss of Rs 198 crore, PCJ's stock surged 100%.
Behind the rally was PCJ's negotiations with banks to avoid bankruptcy. The jeweller even offered to reduce payment terms to 3 years from 5 years to get the lenders to settle, instilling confidence in investors.
In July 2024, the company reached a One-Time Settlement (OTS) with 12 out of 14 banks. As part of the settlement, PCJ agreed to repay the loan in cash and equity, with structured cash payments over 2 years from the date of settlement (September 30, 2024). However, it expects to repay the debt by March 2026.
So far, PCJ has paid Rs 487 crore in cash and converted debt worth Rs 1,510 crore to equity, giving banks a 9.07% stake in the company. As of March 30, 2025, it halved its debt to Rs 2,064 crore.
The company will announce more such capital infusion as part of its plan to raise up to Rs 2,705 crore by issuing warrants on a preferential basis to promoters and investors. So far, the company has raised Rs 1,664 crore from share warrants.
PCJ is strengthening its balance sheet by reducing debt. Simultaneously, it is reviving its business by using Rs 529 crore from the capital raised towards working capital. This helped the jeweller revive its FY25 sales. It reported a profit of Rs 578 crore by reducing its interest expense by Rs 454 crore to Rs 51 crore.
PC Jeweller's Cash and Debt from FY23-FY25
2,245
2,064
Cash Equivalents
Inventory
5,633
6,649
Source: Screener.in
PCJ is no longer in crisis mode. Over the last five years, it has avoided bankruptcy and returned to profits, which drove its share price up 1,068%. But challenges remain.
PCJ's short-term borrowings have a Crisil rating of D (Default) 'issuer not cooperating' as on March 28. It received a show-cause notice from SEBI in February 2024 for alleged violation of the Listing Obligations and Disclosure Requirements (LODR) Regulations. Though it has settled the issue with SEBI by paying Rs 7.23 crore, it highlights that more work needs to be done around its corporate disclosures.
PCJ also has to work toward reviving its business operations, where it is competing with giants like Tanishq and Kalyan Jewellers. Kalyan Jewellers has been expanding showroom count aggressively by moving from company-owned company-operated (COCO) to franchise-owned company-operated (FOCO) model. In the FOCO model, the franchise owners put their money into owning/leasing the store and store inventory. This model reduces the capital intensity of opening a new store, but also reduces the margin.
PCJ, on the other hand, still operates on the COCO model, with only 4 franchises and 48 showrooms. The company's FY25 revenue is down 9% from FY23, when the business was not disrupted by bank default.
PCJ is confident about FY26 growth. Its stock is trading at a price-to-earnings (P/E) ratio of 19x, way below Kalyan Jewellers' ratio of 85x and the industry median of 32x. Even the Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortisation (EV/EBITDA) ratio of 25.3x looks cheaper than Kalyan Jewellers' 39x.
But PCJ's low valuation doesn't make it a value stock. It still carries high risk as the company still lacks consumer trust. It now has a shorter deadline to repay the Rs 2,064 crore debt. Until consumer and investor confidenc eis fully restored, risk remains high.
Analysts have not yet initiated coverage on PCJ stock. That means investors must rely on their analysis of the company's performance. Being a distressed small-cap stock, its trading volumes are mostly concentrated around shareholder events, which increases volatility. However, it holds potential to grow substantially if the positive news keeps flowing in.
Note: We have relied on data from http://www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
Puja Tayal is a financial writer with over 17 years of experience in the field of fundamental research.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

IIT-G: Fee revised after 7 years to support students' welfare
IIT-G: Fee revised after 7 years to support students' welfare

Time of India

time42 minutes ago

  • Time of India

IIT-G: Fee revised after 7 years to support students' welfare

Guwahati: IIT Guwahati authorities on Wednesday said a fee hike was imminent to support the cause of the students, even as PhD students at the institute continued their second day of protests on Wednesday against substantial fee increase across various heads. The students conducted a protest march on the campus on Tuesday night, while the IIT Guwahati administration maintained that the hike in fee has been made 'to support enhanced student welfare and activities'. 'IIT Guwahati revised the fee after seven years, and the increase for continuing students is Rs 8,900 per semester. This was made to support enhanced student welfare and activities, including increased allocations for hostel-level events, cultural and sports festivals, and Gymkhana-led initiatives beyond just Inter-IIT participation,' IIT Guwahati authority said in a statement on Wednesday. Following the fee increase announcement last month, PG and PhD students requested an open discussion to understand the fee component increases. The administration stated they held a four-hour discussion on July 17, explaining the fee increase details. "The students were also informed that the institute made provisions for loans through the Students' Welfare Fund to support the needy ones. At the conclusion of the meeting, with the clarifications in hand, the student body was asked to submit their representation if they had any further concerns. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Discover the upgrades that set the New Koda 2 Pro apart Ooni Pizza Ovens Learn More Undo No submission has been received so far," the IIT Guwahati authority claimed on Wednesday. The administration noted that the protest outside the administrative building that started on Tuesday was unexpected, occurring without prior notice or formal representation of concerns. "While a small group of students is protesting, the majority of the 8,400-strong student body is not participating in the protest," the administration claimed, although protesting PhD students asserted support from others unable to join. "This small group of protesting students bypassed the elected student body," the administration added, noting the elected student body statement: "Despite the ongoing dialogue within the elected student body to put up a proposal for consideration of fee revision, this small group of protesting students disobeyed the student representatives, jeopardising their efforts at reconciliation. The elected student body is not part of this protest and is also working through the proper channel for an amicable solution to the increased components of the fee. " The protesters highlight that PhD students' fee increased by Rs 10,900 for the July-Nov semester 2025, rising from Rs 34,800 in Jan-May 2025 to Rs 45,700.

Ramprastha realty fraud: ED uncovers Rs 140cr fund diversion
Ramprastha realty fraud: ED uncovers Rs 140cr fund diversion

Time of India

time42 minutes ago

  • Time of India

Ramprastha realty fraud: ED uncovers Rs 140cr fund diversion

1 2 Chandigarh: The Gurugram unit of the Enforcement Directorate (ED) on Wednesday claimed to have uncovered a fund diversion of over Rs 140 crore belonging to home buyers by the directors of Ramprastha Promoters & Developers Pvt Ltd (RPDPL). The revelation came during the interrogation of Arvind Walia and Sandeep Yadav, directors and promoters of Ramprastha Developers Group. Both Yadav and Walia were arrested by ED's Gurugram unit on Monday, and the special PMLA court of Gurugram ordered their ED custody until Friday. ED is expected to get more leads about the whereabouts of other accused as well as details of funds diverted by the accused company, confirmed the officials on Wednesday. Walia and Yadav are directors and the majority shareholders of Ramprastha Developers Group. The company is accused of duping 2,000 home buyers to the tune of Rs 1,100 crore on the pretext of selling flats or allotment of residential plots in Gurugram. Officials informed that soon after the arrest of the accused, the federal agency conducted search operations at three locations in Delhi and Gurugram in connection with a money-laundering case against RPDPL and its promoters/directors. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Beyond Text Generation: An AI Tool That Helps You Write Better Grammarly Install Now Undo The promoters/directors of RPDPL diverted funds of more than Rs 140 crore collected from homebuyers to its group companies as advances for the purchase of land parcels, etc, instead of using the same for the completion of promised homes, which ultimately led to failure to deliver the flats and plots to date. The search actions also resulted in the seizure of unaccounted cash amounting to Rs 18 lakh and six luxury cars belonging to the company used for the personal needs of the directors. Moreover, three bank lockers and 34 bank accounts with balances worth multiple crores were frozen. ED initiated an investigation on the basis of multiple FIRs registered by the Economic Offences Wing (EOW), New Delhi, and Haryana Police. It was alleged in the FIRs that RPDPL and its promoters have cheated/defrauded various home buyers/plot buyers for failing to deliver the promised flats and plots within the promised timeframes, even after the lapse of more than 10-14 years. During the investigation under PMLA, 2002, it was revealed that RPDPL launched various projects such as Project Edge, Project Skyz, Project Rise, and Ramprastha City (plotted colony project) situated at Sectors 37D, 92, and 95, Gurugram, in 2008-2011, and possession of flats/plotted lands was promised within 3-4 years of launch. ED investigation revealed that RPDPL collected approximately Rs 1,100 crore from more than 2,000 homebuyers for the said projects. Immovable properties worth Rs 681.54 crore belonging to RPDPL and its group companies were provisionally attached on July 11.

ED to seize properties worth Rs 75 crore linked to Chhangur Baba
ED to seize properties worth Rs 75 crore linked to Chhangur Baba

India Today

timean hour ago

  • India Today

ED to seize properties worth Rs 75 crore linked to Chhangur Baba

The Enforcement Directorate (ED) is preparing to seize properties worth Rs 75 crore linked to Chhangur Baba who is accused of masterminding a large-scale religious conversion racket and receiving money from foreign to official documents, the ED has found that Chhangur Baba bought several land and buildings in Uttar Pradesh and Maharashtra between 2020 and include over 11 bighas of agricultural land in Uttar Pradesh, including 3 bighas in Utraula bought in 2021 for Rs 65 lakh, 5 bighas in Balrampur purchased in 2020 for Rs 1.25 crore and 3 bighas in Madhpura village bought in 2021 for Rs 42 Along with this, the ED is examining five residential properties located in various cities of Uttar Pradesh, covering more than 20,000 square feet and acquired between 2020 and commercial plots measuring over 4,600 square feet are also part of the investigation. Additionally, a property in Lonavala in Maharashtra, was purchased in 2023 for Rs 16 crore. Some of these properties are registered in the names of his close associates, Naveen Rohra and Neetu Rohra. The ED believes the total current value of these properties may be between Rs 75-80 investigation revealed that Chhangur Baba received Rs 65 crore from domestic and foreign sources. The ED suspects that the figure may increase once all remaining bank records are funds were transferred into India through multiple bank channels. According to officials, a large part of this money was allegedly used to support religious conversion money came through various bank accounts, including two SBI accounts that received Rs 15 crore from the UAE. Between 2019 and 2021, he received Rs 7.75 crore. The ED has also identified Vostro accounts connected to his said none of the foreign money was sent for business purposes. The ED is now working to trace the full network and may freeze more accounts in the coming weeks as the investigation is currently underway.- EndsTune InMust Watch IN THIS STORY#Maharashtra

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store