This jewellery stock gained 4% today despite gold price hitting record high

Shares of PC Jeweller advanced 4.2 per cent to Rs 59.79 per share on the BSE in Wednesday's intraday trade after Karur Vysya Bank accepted the debt laden jewellery seller's one-time settlement offer. 

"Karur Vysya Bank Limited, vide its e-mail / letter dated April 02, 2024, has conveyed acceptance of 'One Time Settlement' proposal submitted by the company to settle the outstanding dues," PCJ said in an exchange filing. 

The terms of approved OTS include cash and equity component payable under settlement, release of securities and mortgaged properties etc. 

At 11:11 AM, shares of PC Jeweller were ruling 2.1 per cent highr at Rs 58.6 per share as against 0.04 per cent rise in the benchmark S&P BSE Sensex.

Earlier in March, State Bank of India (SBI), too, accepted the company's OTS offer, which owes over Rs 3,000 crore to a clutch of lenders. 

SBI is the largest lender with a debt outstanding of Rs 1,180 crore, followed by Union Bank of India ( Rs 530 crore), Punjab National Bank (Rs 478 crore), and Indian Bank ( Rs 226 crore), as per reports.

The company reported consolidated net loss of Rs 197.98 crore in Q3FY24 as compared with net loss of Rs 61.12 crore recorded in Q3FY23. Revenue from operations tanked 95.3 per cent year-on-year (Y-o-Y) to Rs 40.06 crore in Q3FY24.

Gold prices

Meanwhile, surging gold prices are proving to be a dampener for jewellery makers and sellers. In just a single month, the price in Mumbai's Zaveri Bazaar has risen by nearly 10 per cent, trading at around Rs 68,500 per 10 gram. 

Surendra Mehta, national secretary, Indian Bullion and Jewellers Association, believes that customers are staying away from the market as of now and the "demand for jewellery has been gradually shifting to coins and bars and other gold investment avenues".

Although demand for jewellery is still higher in terms of total demand, sovereign gold bonds and exchange-traded funds for gold have provided a good alternative for gold investors. In jewellery, low-caratage jewellery is preferred, with rising prices affecting demand in quantity terms, he said. READ REPORT HERE

On the bourses, shares of jewllery players like PCJ (down 10 per cent), Titan Company (flat), Tribhovandas Bhimji Zaveri (down over 1 per cent), Thangamayil Jewellery (down 1 per cent), and Goldiam International (down 1 per cent) have underperformed the market over the past one month. By comparison, the benchmark Sensex added 0.1 per cent and the Nifty 0.2 per cent during the period. 

The Indian jewellery retail industry, valued at $ 69.4 billion in FY23, is now thronged by organised players as against family-owned standalone stores over the past decade. This shift has been propelled by sophisticated advertising, efficient inventory management, diverse designs, and elevated quality standards. Also, organised players have capitalised on superior service quality, streamlined supply chains, and enhanced transparency, giving them an edge over standalone and regional competitors.

With these factors driving the industry, it is anticipated that the organised sector will further expand its market share to 42-47 per cent by FY26-FY27, said a report by Equirus Securities.