Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Stock Report

| More

CRISIL downgrades PC Jeweller Ltd's ratings to default grade

Posted On: 2019-12-09 17:03:07


CRISIL Limited has downgraded its long term and short terms ratings to the bank loan facilities of PC Jeweller Ltd to CRISIL D.

As per the Rating Rationale "the downgrade in the rating factors in the instances of devolvement of Letter of Credits (LC) and overutilization in working capital limits for more than 30 days. The same is reflective of the fact that the liquidity profile of the group has deteriorated in past few months on account of cash flow mismatches. The ratings reflect instances of LC devolvement and overutilization in working capital limits, large working capital requirement and the risk of unfavourable regulatory changes. These weaknesses are partially offset by PCJ group's strong market position in manufacturing and retailing gold and diamond jewellery and the above-average capital structure."

The Company however clarifies that Indian jewellery demand during Q2 at 101.6 tonnes was almost a third lower Y-0-Y due to weaker consumer sentiments and there was a decline of nearly 51% in Indian bullion imports on Q-o-Q basis.

The overall jewellery demand suffered primarily due to the following reasons:

Sudden Price Surge - The gold prices rallied during the quarter ended September, 2019 and breached Rs. 35,0001l0g level in mid of July, 2019 and continued climbing to Rs. 38,795110g by the end of August, 2019 before reaching an all-time high of Rs. 39,01111Og during the first week of September, 2019. The two month leap of - Rs, 5,000 / 10g from Rs. 34,006 / 10g at the end of June, 2019 caught consumers completely off guard, prompting many to delay buying. Despite a correction in the final few weeks of the quarter, due to the decrease in the international gold price and a strengthening rupee, the impact on demand was muted as it coincided with Pitru-Paksha, an inauspicious 16 lunar day period during which Hindus pay homage to their ancestors.

Customs Duty - Demand was further dented by a 2.5% rise in the customs duty on gold to 12.5%. This higher rate hit sentiments amongst both the gold trade and consumers, and fresh jewellery purchases suffered as a result. Consumers preferred gold-to-gold exchanges, which increased to an average of 50-60% of purchases.

Weak Sentiment - Consumers confidence fell further over concerns around the slowing economy. Weak sentiments. due to a liquidity crunch, excessive monsoon rains in some states and the absence of any festivals, also influenced demand during the quarter.

The situation has however, changed with the onset of festive season from October, 2019 onwards. The cash flows have started and the Company by the end of November, 2019 has adjusted 90% of the devolved SBLCs. There is no further invocation of any SBLC.

The Company also clarifies that there was no increase in the absolute amount of working capital limits even after SBLC invocations and there was only an intra facility exposure mismatch. There is no increase in the bank borrowing of the Company and there is actually a decline of Rs. 248 crores between March 1, 2019 and September 30, 2019.

The Promoter of the Company has infused Rs. 215 crores of his personal funds in the Company to improve its NWC. These funds are non-interest bearing and though the same are currently classified as unsecured loan and taken as liabilities, they will be converted in due course into equity or equity like instrument subject to receipt of necessary approvals and compliance with applicable laws and will further improve the net worth of the Company.

The financials of the Company as on September 30, 2019 shows that the Company has a healthy CR and TOL / TNW. The Company's debt service coverage ratio (EBIT/Intt) for the half year ending September 30, 2019 is also positive.

Shares of PC JEWELLER LTD. was last trading in BSE at Rs.24.75 as compared to the previous close of Rs. 26. The total number of shares traded during the day was 507909 in over 1416 trades.

The stock hit an intraday high of Rs. 25.9 and intraday low of 24.6. The net turnover during the day was Rs. 12717904.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com





Other Headlines:

Sonata Launches 'CSK 2020 Edition' for Chennai Superkings Fans

Universal Cables Ltd updates on capacity expansion

Innovators Facade Systems Limited receives work order of Rs. 26 crores

MRPL shareholders approve proposal to raise funds of Rs. 5000 crore

ITC Ltd increases stake in Delectable Technologies Pvt Ltd

PNB associate bank, JSC Tengri Bank's License revoked

ITC Ltd.'s Sunfeast YiPPee!'s 10th Anniversary celebrations make a GUINNESS WORLD RECORDS® achievement

RITES Ltd board approves buy back through tender offer at Rs. 265

Route Mobile Limited shares to list on Monday - Sep 21, 2020

Mysore Petro Chemicals Limited to write-off GBP 770,000

Somany Ceramics adds a dash of style at T2, Mumbai Airport.

United Spirits Ltd announces resignation of CFO

Lords Chloro Alkali Ltd posts loss of Rs. 1.08 crore in Q1FY21

Zydus Cadila receives final approval from USFDA for Potassium Chloride Extended-Release Tablets

ICRA upgrades rating of Escorts Ltd

Bhatia Mobile to Migrate to main board of BSE

Avantel Ltd receives order of Rs. 15.97 crore from Bharat Electronics Ltd

Magna Electro Castings Ltd board approves buy back at Rs. 175

TATA Tea Chakra Gold Becomes Official Tea Partner for Chennai Super Kings in IPL 2020

Tiger Logistics India Limited provides future Business Outlook

Dr. Reddy's Laboratories announces settlement of U.S. Revlimid® Capsules patent litigation with Celgene

TVS Motor Company expands and strengthens its presence in Colombia

ICICI Securities successfully closes ~INR 6,000 mm IPO of Route Mobile Limited

EIH Limited approves rights issue, fixes Sep 23, 2020 as record date

Hindalco and Hindustan Copper sign MoU for supply of copper concentrate

Kilpest India Limited to merge subsidiary with itself, change name as 3B BlackBio Dx Ltd

Sterling and Wilson Solar Limited Signs order of 106.71 MW worth USD 62.6 mn in Chile

South Korea donates One lakh masks to TVS Motor Company for free distribution to aid India's fight against COVID-19

TCS Recognized as a Leader in Cloud-Native Application Development Services by Everest Group

Power Grid Corporation of India Ltd receives approval for setting up of InvIT

Mahindra Happinest® sells 100+ homes online within a week at 'Happinest Palghar'

Ramco Systems signs agreement with Arla Foods

IRCON International Ltd secures order worth Rs. 1900 crore

Phoenix Group Partners with TCS to Introduce Enhanced Analytics for Workplace Pension Clients

L&T Construction secures order from Northern Coalfields Ltd

Dr. Reddy's announces the launch of Over-the-Counter Olopatadine Hydrochloride Ophthalmic Solution USP, 0.2% and 0.1%, the store-brand equivalent of Pataday®, the Eye Allergy Drop in the U.S. Market

Ashok Leyland receives an order for 1400 ICVs from Procure Box

PTC India Financial Services Ltd receives Rs. 115.57 crore IT refund

Thomas Cook India & SOTC partner with India's favourite storyteller Amar Chitra Katha

Shankar Lal Rampal Dye-Chem Ltd Board to consider Bonus Issue of Equity Shares

Dhanuka Agritech Ltd fixes Sep 28, 2020 as record date for buy-back

Sterling and Wilson Solar Limited declares financial results for quarter ending 30th June 2020

JMC secures new orders of Rs. 1,342 Crores

ABM Knowledgeware Ltd bags Rs 127.44 Crores order for SAP Technology Modernization

Titan Company with SBI launches India's first contactless payment watches

Bajaj Consumer Care Joins hand with IndiaMART, to enhance their digital presence in B2B market segment

ICICI Securities successfully closes ~INR 7,020 mm IPO of Happiest Minds Technologies Limited

The Bank of Bahrain and Kuwait goes live with iGTB's Contextual Digital Transaction Banking platform to support growth

HCL and Google Cloud Expand Partnership to Deliver Accelerated Business Intelligence Platform

CARE Ratings reaffirms 'CARE A-' rating with stable outlook for Jindal Stainless (Hisar) Limited







Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019