Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
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

Other Headlines:

JUST Dial Ltd Q3 consolidated PAT at Rs. 62.03 crore

Just Dial Ltd to acquire MyJD Private Ltd

Prestige Estates arm invests in Lokhandwala DB Realty LLP

Monnet Ispat & Energy Ltd reports consolidated net loss of Rs. 140.44 crores in Q3

HFCL consolidated Q3 net profit slides to Rs. 46.08 crore

Gujarat Hotels Ltd reports Q3 FY20 net profit of Rs. 1.09 crore

CRISIL upgrades bank facilities ratings of Sharat Industries Limited

SREI Infrastructure Finance Ltd board to consider issue of securities during FY2020-21

iGTB Announces World's First 100%, 45-minute Robotic Deployment of its fully-featured Transaction Banking Portal CBX

NBCC India Ltd receives LOA from Central Coalfield Ltd

H.G. Infra Engineering Ltd arm gets appointed date from NHAI

Sagarsoft India Ltd Q3 PAT falls to Rs. 0.29 crore

Can Fin Homes Ltd Q3 PAT up at Rs. 106.60 crore

KEI Industries Ltd Q3 consolidated PAT rises YoY to Rs. 7.25 crore

G G Automotive Gears Ltd posts Rs. 1 crore net profit in Q3

Wipro positioned as a Leader in Networks - Software defined solutions and services for UK and Nordics

International Travel House Ltd reports loss of Rs.1.26 crore in Q3

Wipro Positioned as a Global Market Leader in Software Defined Network Solutions and Services by ISG

Zydus and China Medical System Holdings enter into a License Agreement for Desidustat in Greater China

IDBI Bank has sold 17.90 lakh shares of NSE

Sinclairs Hotels Ltd board to consider stock split

ICICI Securities Ltd Q3 FY20 consolidated PAT climbs to Rs. 137.23 crore

National Standard India Ltd Q3 net profit higher YoY

Sunshine Capital Ltd posts Q3 PAT of Rs. 0.89 crore

Hindustan Zinc Ltd reports PAT of Rs. 1620 crores in Q3

TASHI India Ltd Q3 net profit at Rs. 0.081 crore

AMS Polymers Ltd to venture into chemicals business

Maruti Suzuki India Ltd introduces BS-VI Compliant CELERIO

Kamdhenu Limited has presented the construction steel of the new Generation

NMDC Ltd revises iron ore prices from Jan 19, 2020

Federal Bank Ltd Q3 consolidated net profit higher at Rs. 451.62 crore

Bank of Maharashtra consolidated Q3 FY20 net profit higher at Rs. 131.90 crore

Kotak Mahindra Bank Ltd consolidated Q3 PAT up YoY at Rs. 2348.72 crore

Apollo Tricoat Tubes Ltd posts surge in PAT to Rs. 18.01 crore in Q3

Sun Pharma to announce third quarter results on February 06, 2020

Airtel and Google Cloud Partner to Boost Collaboration, Productivity and Digital Transformation in India

Lupin and European Association of Urology Successfully Conclude Masterclass 'Best of EAU19'

Blue Star wins 'The Best Governed Company' award at the '19th ICSI National Awards for Excellence in Corporate Governance'

Cipla Ltd receives EIR from USFDA for Patalganga facility

Strides announces successful closure of the USFDA inspection at its manufacturing site in Florida, United States

Biocon's Oral Solid Dosage Manufacturing Facility Completes Pre-Approval U.S. FDA inspection with Zero Observations

ITI Ltd to fix price band for FPO

Gross NPAs of HDFC Bank increases

Adani Gas Limited's initiative for CNG & PNG in Bhilwara, Rajasthan

Gallantt Ispat Ltd reports consolidated PAT of Rs. 2.81 crore in Q3 FY20

CUPID Ltd Q3 net profit up YoY at Rs. 10.21 crore

Sacheta Metals Ltd Q3 FY2020 net profit at Rs. 0.16 crore

Gallantt Metal Ltd Q3 consolidated PAT at Rs. 1.04 crore

INDAG Rubber Ltd reports consolidated PAT of Rs. 4.10 crore in Q3

HDB Financial Services Ltd reports PAT of Rs. 343.1 crore in Q3 FY2019-20

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

disclaimer copyright © 2005 - 2019