As domestic indices continued to rise, overcoming all obstacles such as a rise in crude prices, the surge in inflation, and rate hikes from major central banks, some stocks achieved multi-bagger returns so far this year, but PC Jeweller is one step ahead by delivering nearly 4x returns in just six months.
Since the mid of May this year, shares of PC Jeweller have increased exponentially from ₹19.70 to the current level of ₹92.15, representing a staggering return of 367%. The majority of the stock gains occurred in the months of July and August when it increased by 106% and 52%, respectively. During the festive month of October, the stock has risen 23.85%.
The stock hit a 52-week high of ₹105.50 on October 28, 2022, and a low of ₹18.6 on March 29, 2022, implying that it is currently trading at 396% higher than its 52-week low.
The surge in stock price began after the company reported its first-quarter profit in Q1 FY23 after nine consecutive quarters of losses. In the first quarter, it reported a consolidated profit of ₹74.4 crore as against a loss of ₹65.6 crore in a similar quarter of last fiscal. The company's revenue from operations in Q1 jumped 138% to ₹623.6 crore from ₹261.7 crore in the corresponding quarter of the previous fiscal.
For the September ending quarter, PC Jeweller posted a consolidated net profit of Rs. 85.9 crore as against a net loss of Rs. 78.9 crore in the same quarter of last fiscal year. It reported a 60% YoY rise in total revenue of Rs. 894.6 crore compared to Rs. 561.9 crore in the same period last year.
The company reported an operating profit of ₹147.4 crore for the September-ending quarter, an increase of 269.42% when compared to ₹39.9 crore in the corresponding quarter of the last fiscal. The EBITDA margin during the quarter came in at 16.42%, an expansion of nearly 929 basis points year on year.
Commenting on the Q2 results, Sanjeev Bhatia, chief financial officer at PC Jeweller, said, "The coming quarter is the festive quarter, and the marriage season will also commence in the same, and thus the momentum in footfalls and spending experienced in Q2 is expected to continue in Q3 as well."
On the downside, the company said it has defaulted on ₹3,466.28 crore in loan facilities from banks and financial institutions for the second quarter.
So far this year, the demand for gold has skyrocketed in India as residents celebrated major festivals after nearly two years of muted celebrations due to the pandemic which pushed the sales. Another factor that contributed to the increase in sales was a drop in gold prices, as the US Fed's continuous rate hikes increased the opportunity cost of holding non-yielding assets.
According to a recent report by the World Gold Council (WGC), India's gold demand has reached pre-pandemic levels and has witnessed an annual growth of 14% during the July-September quarter, at 191.7 tonnes, mainly driven by strong consumer interest.
According to the "Gold Demand Trends Q3 2022" report by WGC, the total demand stood at 168 tonnes during the July-September quarter of 2021. Investment demand increased by 6 per cent to 45.4 tonnes during the third quarter of 2022, compared to 42.9 tonnes in the same period last year.
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