About the Stock

PC Jeweller Ltd. is involved in the operations of manufacturing, sale and trading of diamond studded jewellery, gold jewellery, and silver articles. It is one of the important jewellery firms in the Indian organised jewellery retail sector.

It offers a diverse range of diamond, silver, and gold jewellery for various occasions like wedding, party and casual wear as well. It has several famous jewellery collections- Bandhan, Anant, The Fluttering Beauty, Animal Collection, Dashavatar, Amour, Folia Amoris, Hand Mangalsutra, Wedding Collection, Men’s Collection, and many more

The company had its own in-housing manufacturing and designing facility. It has around four manufacturing units located in Noida, Uttar Pradesh. 

The company has three wholly-owned subsidiaries- PCJ Gems & Jewellery Limited, Luxury Products Trendsetter Private Limited, and PC Jeweller Global DMCC.

In the third quarter of the financial year 2025, the company had around 55 showrooms (consisting of 3 franchisee showrooms) in around 41 cities in 15 states of India. In this quarter, the company’s showrooms at Allahabad and Preet Vihar were closed. The company is currently operating in the domestic market only. 

Quarterly Update

1.In the third quarter of the financial year 2025, PC Jewellers recorded a robust growth of about 1496 percent in the revenue which accounts to Rs. 639 crore compared to the its revenue growth of Rs. 40 crore in the same quarter of the previous financial year.  The company recorded a turning point from being in loss to profit in the third quarter of the current financial year.

2.In the third quarter of the financial year 2025, the company recorded a surged in total expenses to Rs. 535 crore from earlier total expenses of Rs. 244 crore in the same quarter of the previous financial year which accounts to about 199 percent. It is because of hike in cost of materials consumed and the increase in rise in the purchase of stock.

3.The company recorded growth in EBITDA (including other income) by about 323 percent YoY in 3QFY25 which accounts to Rs. 155 crore compared to loss of Rs. 69 crore in the same quarter of FY24.

4.The company also registered a strong growth in its PAT by about Rs. 146 crore compared to its loss of Rs. 200 crore in the same quarter of the previous financial year. The company recorded a consolidated net profit of Rs. 148 crore.

Commentary

1.In the previous  financial year 2024, the company was record loss. The company was facing the debt and financial issues.  In the current financial year, the company has started to record profit. It has taken measures like one-time settlement with the bank and preferential issuance of fully convertible warrants to investors in the current financial year.

2.The company recorded strong growth in terms of revenue due to rise in consumption demand by consumers. The reason for the strong growth is mainly driven by festive and wedding season. It led to the hike in the consumer demand levels. This revenue growth is based completely on its sales at domestic level. 

3. The rise in total expenses in terms of purchases of stock and cost of material consumed indicates company trying to match up with the robust consumption demand driven by festive and wedding season, along with elevated gold prices.

Con Call Highlights

1.The company recorded a rise in its domestic sales by Rs. 639 crore in the third quarter of the financial year 2025. It is mainly driven by a hike in consumer demand due to the wedding and festive season leading to an increase in consumption and customer traffic for the company and the sector.

2.In the first three quarters of the financial year 2025, the company was successful in recording a PBT of Rs. 353 crore compared to its loss of Rs. 525 crore in the previous first three quarters of the financial year 2024. It indicates remarkable progress for the company.

3.To address the issue of debt burden and bring financial stability in the company, the company took the approach of offering to subscribe and issuance of warrants.

4.On 30th of September, 2024, PC Jewellers completed its one-settlement agreement with its consortium banks. In the period of third quarter, the company paid its payment as per the decided timeframe in the Settlement Agreement.

5.On 11th October, 2024, the company executed its issuance of warrants of Rs. 2,702.11 crore which received a subscription of about 99.89 percent. In the third quarter, the company allotted about 118,41,30,520 equity shares by converting its warrants. The company executed this conversion after getting 75 percent  of the issue price from its investors. The company recorded a strong support by investors for the preferential issuance of fully convertible warrants due to the decision of the Union Budget to change import duty on gold to 6 percent from earlier 15 percent.

6.In the period of the third quarter of FY25, the company declared its first-ever stock split with the ratio of 1:10. It resulted in change in face value Rs. 10 to Rs. 1.

7.The company’s efforts to increase its brand presence and expansion in marketing is reflected in its performance of 9 months of the financial year 2025.

8.The company now has 55 showrooms (consists of 3 franchisee showrooms) in 41 cities in about 15 states in India.

9. The company is optimistic about its growth in the industry as well as development in business operations in the upcoming quarters. 

Valuations

In present times, the stock of PC Jeweller Ltd is trading at multiple of 20.6 x  0.73 EPS at the CMP of Rs. 13.7. In book terms, trading  2.14x than its book value of Rs. 6.35.  As of today, the ROCE and ROE of the company is at -1.74 percent and -19.0 percent, respectively. The company recorded a net profit of Rs. 146 core in the third quarter of FY25 due to strong consumption demand driven by festive and wedding season.

Investment Rationale

India is known for its high jewellery consumption levels. India consumes about 850 to 900 tonnes of gold on yearly basis. In the period of April to December of the year 2024, India recorded expansion in import levels of gold jewellery to around 87.4 percent higher in relation to its import levels in the previous financial year of the same period. These imported gold jewellery prominently includes rings, chains, and earrings. 

India’s Gem and Jewellery  sector plays a crucial role in the progress of the Indian economy. The reason for this is that this industry is considered as one of the biggest exporters of India in the world.  It also plays a major role in creating jobs for artisans.  One of the issues in this industry is the proportion of unorganized jewellers is higher than organized segments. In the FY 2023, the organized retail jewellery segment comprised around 37 percent of jewellers at both regional and national level. There is a positive projection of rise in market size of the Indian jewellery retail industry to 145 billion US dollar  by the financial year 2028.

In the Union Budget 2025, the jewellery companies got the relief as the budget announced reduction in tariff duties to jewellery  by  20 percent. It was earlier 25 percent. It resulted in a rally of many jewellery companies to about 9 percent. Apart from this, the budget announced lowering duties on platinum metal by about 5 percent which was earlier 25 percent. It also IGCR conditions imposed on Lab Grown Diamond (LGD) leading  to becoming duty-free product. The objective of these measures is to contract the cost and to raise the demand in the market. It is also anticipated to promote the luxury jewellery segment.

Budget 2025 announcement of tax relief for income up to Rs. 12.75 lakhs is expected to aid in increasing demand in the jewellery industry and also rise in job levels in the sector. In the first 9 months of the current financial year , domestic jewellery companies recorded a rise in consumption due to hike in gold prices,  high number of auspicious days and wedding days,  and consumers moving towards branded jewellery. 

In the current financial year, the company has started to record profit after a long period of loss. The company is now focused on increasing its market presence in India. It is expected to continue to get benefitted with the expansion in consumption demand of the consumers.