PC Jeweller Q3 loss widens
Upstox
2 min read • Updated: February 14, 2024, 7:01 PM
Summary
The consolidated net loss for the troubled jewellery manufacturer widened to ₹198 crore in the quarter ending on 31 December, compared to losses of ₹61.1 crore a year earlier and ₹138 crore in the preceding quarter.
On Wednesday, PC Jeweller in India reported a loss for the fifth consecutive quarter, attributing the decline in revenues to the repercussions of legal conflicts with its lenders.
The company has put forward a proposal for a one-time settlement of its outstanding debt to lenders. They have tentatively agreed and are in the process of seeking internal approval for the proposition, as stated on Wednesday. Having already made an upfront deposit towards the settlement, PC Jeweller expresses optimism about a favourable resolution to its settlement proposal in the near future.
In an effort to turn its fortunes around, the Delhi-based company is actively restructuring its operations by implementing cost-cutting measures and introducing new collections.
The consolidated net loss for the troubled jewellery manufacturer widened to ₹198 crore in the quarter ending on 31 December, compared to losses of ₹61.1 crore a year earlier and ₹138 crore in the preceding quarter.
PC Jeweller has been contending with a "liquidity squeeze," exacerbated by the closure of some showrooms during an ongoing struggle with lenders since the previous year.
The company raised concerns about "adverse publicity" negatively impacting sales after several lenders, including the State Bank of India and Indian Bank, classified its borrowing accounts as non-performing in 2021 and sought due repayments through legal channels.
PC Jeweller had been exploring the potential for an out-of-court settlement with its lenders. During the December quarter, a period coinciding with significant festivals in India, which traditionally witness heightened gold demand due to the auspicious nature of buying bullion, the company experienced a staggering 95% decline in revenues.
PC Jeweller's stock witnessed a 44% decrease in 2023 following three consecutive years of annual gains. In contrast, Kalyan Jewellers benefited from festive demand, leading to increased profits in the December quarter. Titan, another industry player, fell short of expectations due to elevated gold prices, which rose approximately 9% in the December quarter.