PC Jeweller tumbles after CRISIL downgrade

PC Jeweller fell 4.65% to Rs 23.60 after credit rating agency, CRISIL, downgraded its long term and short term ratings on the bank loan facilities of the company to 'CRISIL D'.

The downgrade in the rating factors in the instances of devolvement of letter of credits (LC), overutilization in working capital limits for more than 30 days, 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.

PC Jeweller, however, clarified that Indian jewellery demand during Q2 at 101.6 tonnes was almost a third lower year on year due to weaker consumer sentiments and there was a decline of nearly 51% in Indian bullion imports on quarter on quarter basis. The announcement was made after trading hours yesterday, 9 December 2019.

Shares of PC Jeweller tumbled 15.86% in four trading sessions to its current market price of Rs 23.60 from its recent closing high of Rs 28.05 on Wednesday, 4 December 2019.

Meanwhile, the S&P BSE Sensex was down 96 points or 0.24% to 40,391.32.

The PC Jeweller stock hit an intraday high of Rs Rs 24.75. It hit an intraday low of Rs 23.50, which is also an all-time record low for the counter. It hit a 52-week high of Rs 167.60 on 18 April 2019.

In the past one month, shares of PC Jeweller slumped 30.69% to its current market price of Rs 23.60.

On the technical front, the stock's RSI (relative strength index) stood at 21.745. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock was currently trading below its 50-day moving average (DMA) placed at Rs 26.91, and below its 200 DMA placed at Rs 31.13.

On a consolidated basis, PC Jeweller's net profit fell 51.2% to Rs 46.38 crore on 29.6% decline in net sales to Rs 1,212.19 crore in Q2 September 2019 over Q2 September 2018.

PC Jeweller is engaged in the business of manufacture, retail and export of jewelry.

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