By Upstox News Desk | Updated on December 16, 2024, 13:26 IST
PC Jeweller Ltd, a prominent jewellery designer and retailer, saw its shares surge by 5% on the NSE, hitting the upper circuit on Monday, December 16, 2024. The rally came after the stock turned ex-split following a 1:10 share split approved earlier this year.
Key Highlights
- Stock Split Details: Each share of ₹10 face value was divided into 10 shares with a face value of ₹1.
- Market Performance: The stock climbed to ₹18.29 per share on the NSE, with over 76 lakh shares traded, amounting to a total trading value of ₹13.72 crore.
- 2024 Returns: The company’s shares have delivered over 245% returns this year.
PC Jeweller’s Share Split Explained
The company’s Board of Directors approved the stock split in October 2024 to enhance market liquidity and make the shares more affordable for retail investors. The record date for this split was December 16, 2024.
Stock splits typically increase the number of outstanding shares while reducing the price per share, without altering the company’s overall valuation. This move aims to attract more investors by making the stock accessible at a lower price point.
Alongside the stock split, the company announced a significant fundraising plan. It approved raising ₹646 crore from promoters through the allotment of 11.5 crore fully convertible warrants at an issue price of ₹56.2 per warrant. An upfront 25% subscription amount was received as part of the private placement.
PC Jeweller’s Impressive 2024 Performance
PC Jeweller has emerged as a multibagger in 2024, offering exceptional returns of over 245%. The stock price soared from around ₹50 per share in January 2024 to ₹174.17 per share (adjusted for the pre-split closing price on December 13, 2024).
The surge was driven by strong financial performance, improving market sentiment, and strategic decisions taken by the company. Notably, the stock gained significant traction during the second and third quarters of FY2024-25 due to robust quarterly results and favorable policy changes.
Turnaround in Financial Performance
PC Jeweller achieved a remarkable turnaround in the July-September quarter of FY2024-25, posting its first quarterly profit after nine consecutive quarters of losses. Key financial highlights include:
- Domestic Sales: Increased to ₹505 crore in Q2FY25, compared to ₹33 crore in Q2FY24.
- EBITDA: Recorded at ₹129 crore in Q2FY25, a substantial improvement from a loss of ₹23 crore in the same quarter last year.
- Net Profit: Reported at ₹179 crore in Q2FY25, compared to a net loss of ₹152 crore in Q2FY24.
The recovery was supported by the reduction in customs duty on gold imports, which was slashed from 15% to 6% in the Union Budget, significantly boosting margins and sales.
Progress on Resolving Insolvency Issues
Another critical development for PC Jeweller this year was the resolution of its insolvency issues with consortium banks. The company secured approval for its One-Time Settlement (OTS) offer from all 14 consortium banks during the second quarter of FY2024-25.
As part of the settlement terms, PC Jeweller paid a significant portion of its dues to the lenders. A major portion of this funding was sourced through promoter group entities subscribing to fully convertible warrants.
Looking Ahead
PC Jeweller’s strategic initiatives, including its stock split, fundraising, and operational turnaround, have positioned it for sustained growth. With a solid foundation, the company is likely to attract more investors and continue its upward trajectory in the stock market.
Investors should keep an eye on PC Jeweller as it leverages its improved financial position and operational efficiencies to capture further market share in the gold and jewellery sector.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a financial advisor before making any investment decisions.