PC Jeweller Ltd.’s Stock Hit Back-To-Back Upper Circuits And 52-Week Highs

PC Jeweller Ltd shares experienced a significant surge today, hitting their 52-week high of Rs 85.83, representing a 5% upper circuit from the previous closing price of Rs 81.75. This upward trend has been consistent, with the stock repeatedly reaching upper circuit limits and new 52-week highs in recent trading sessions, accompanied by heavy trading volumes.

The recent surge in PC Jeweller’s stock price can be attributed to a confluence of positive developments:

Company-Specific Factors

• Debt Resolution Progress: PC Jeweller has made significant strides in resolving its debt issues. The company has successfully secured one-time settlement (OTS) agreements with Canara Bank, Bank of Baroda, and IndusInd Bank. These agreements involve a combination of cash payments, equity contributions, and asset releases, providing substantial relief to the company’s financial burden.
• Capital Infusion: The company’s board has approved the issuance of convertible warrants worth Rs 2,705.14 crore. This capital injection will be utilized to repay bank loans, bolster working capital, cover general corporate expenses and offset issuance costs.

Industry-Wide Tailwinds

• Favorable Budgetary Measures: The recent Union Budget has introduced several measures beneficial to the gems and jewellery sector. A substantial reduction in customs duty on precious metals, coupled with the removal of duties on essential jewellery-making minerals, is expected to lower jewellery prices, stimulate consumer demand and enhance domestic value addition.
• Growth Prospects: The government’s support for the industry, including initiatives for lab-grown diamonds and streamlined trade processes, has positioned the sector for robust growth. With the industry projected to reach a valuation of USD 100 billion by 2027, the overall sentiment towards the jewellery sector is optimistic.

About the Company

PC Jeweller Limited is a prominent Indian corporation specializing in the design, production, and retail of gold, platinum, diamond, and silver jewellery. With a widespread presence across India, the company boasts a diverse portfolio of brands, including Azva, Swarn Dharohar, and LoveGold. Notably, PC Jeweller’s influence extends beyond traditional jewellery, as evidenced by its creation of commemorative medallions for the Cricket World Cup.

The small-cap company is valued at Rs 3,994.56 crore and its shares are currently trading at a premium to its asset value. Life Insurance Corporation of India (LIC) has a 1.45% ownership in the company, while foreign institutional investors (FIIs) have significantly increased their stake from 0.93% in March 2024 to 2.57% in June 2024. Having delivered a remarkable 237% return from its lowest point in the past year, this stock has caught the attention of investors.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.