At a Glance
PC Jeweller (PCJ) pulled a Bollywood-style comeback in Q1 FY26 – sales jumped 81% YoY to ₹725 crore, and net profit rose to ₹164 crore from ₹95 crore a year ago. Debt has reduced, promoters are slowly stopping the exodus, and management claims they’ll be debt-free in FY26. Sounds glittery? Hold on – export receivables of ₹1,592 crore are still stuck in court, inventory is partly under custody, and promoter holding is a fragile 40%. This is a turnaround stock, but with a truckload of caveats.
Introduction
PC Jeweller has had more drama than a daily soap – once a market darling, it crashed into controversies around export receivables, pledged shares, and promoter exits. The stock now trades at ₹15, reflecting investors’ cautious stance despite decent financial recovery.
Q1 FY26 shows a strong operational revival – margins improved to 18% OPM, profits rose, and debt has been trimmed. But the qualified audit report (because of export receivables under dispute) reminds investors that this isn’t Titan yet.
Business Model (WTF Do They Even Do?)
PCJ designs, manufactures, and retails:
- Gold Jewellery – their bread and butter.
- Diamond & Precious Stone Jewellery – higher margin play.
- Silver Items – for the budget-conscious bling lover.
- Export Business – B2B via Dubai-based firms.
PCJ operates through a mix of domestic retail stores and export channels. Domestic sales are stable, but exports (especially to the Gulf) remain the wild card due to disputes.
Financials Overview
Q1 FY26 key highlights:
- Revenue: ₹725 crore (+81% YoY)
- EBITDA: ₹127 crore (OPM 18%)
- Net Profit: ₹164 crore (+72% YoY)
- EPS: ₹0.25
FY25 saw revenue ₹2,568 crore and PAT ₹584 crore – a sharp turnaround from losses in previous years.
Commentary: Revenue rebound is solid, margins improved, and interest costs are under control. But other income (₹172 crore) contributed significantly to profits, which raises sustainability concerns.
Valuation – Glitter or Fool’s Gold?
Current Price: ₹15
TTM EPS: ₹1.03
P/E: 17
Book Value: ₹9.74 (P/B 1.54)
Fair Value Range:
- P/E Method: Assuming fair P/E 12–15 × EPS ₹1 → FV ₹12–₹15
- EV/EBITDA: FY25 EBITDA ₹470 crore, EV/EBITDA 7× → FV ₹18–₹20
- DCF: High uncertainty → FV ₹12–₹18
🎯 Fair Value Range: ₹12–₹18. Stock is trading at upper band – risky but not insane.
What’s Cooking – News, Triggers, Drama
- Q1 FY26 results show strong recovery.
- ₹500 crore fund raise planned, could dilute equity but strengthen finances.
- Export receivables ₹1,592 crore – under legal dispute.
- Inventory under court custody – operational constraint.
- Target: management confident of being debt-free FY26.
Balance Sheet (Auditor’s Stand-Up)
| (₹ Cr) | Mar 23 | Mar 24 | Mar 25 |
|---|---|---|---|
| Assets | 7,636 | 7,269 | 8,412 |
| Liabilities | 4,411 | 4,338 | 2,219 |
| Net Worth | 3,690 | 2,931 | 6,193 |
| Borrowings | 3,736 | 4,150 | 2,151 |
Audit Punchline: Borrowings halved, but half the assets are locked in courtroom dramas.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 100 | 64 | -633 |
| Investing | 30 | 7 | 2 |
| Financing | -111 | -108 | 688 |
Commentary: Negative OCF in FY25 despite profit – cash is stuck like a gold chain in customs.
Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE % | 5 | -2 | 13 |
| ROCE % | 5 | -2 | 7 |
| P/E | 8 | 20 | 17 |
| PAT Margin % | 7 | -28 | 18 |
| D/E | 0.8 | 1.4 | 0.3 |
Commentary: ROE finally positive, D/E dropped to 0.3 – but sustainability depends on cash conversion.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 2,472 | 604 | 2,568 |
| EBITDA | 256 | -170 | 470 |
| PAT | 179 | -629 | 584 |
Remark: FY24 was a horror show, FY25 was a miracle, Q1 FY26 suggests the trend is holding.
Peer Comparison
| Company | Revenue (₹Cr) | PAT (₹Cr) | P/E |
|---|---|---|---|
| Titan Company | 60,456 | 3,336 | 88 |
| Kalyan Jewellers | 25,045 | 714 | 84 |
| PC Jeweller | 2,568 | 584 | 17 |
| P N Gadgil Jewellers | 7,586 | 219 | 36 |
Commentary: PCJ trades at a steep discount – justified, because litigation clouds still hang.
Miscellaneous – Shareholding, Promoters
- Promoters: 40.1% (down from 54% in 2023)
- FIIs: 4.9% (stable)
- DIIs: 9.1% (supportive)
- Public: 45.9%
Promoter stake erosion signals past troubles, but FIIs/DIIs are dipping their toes back.
EduInvesting Verdict™ (500 Words)
PC Jeweller is like that once-famous actor trying to make a comeback – the Q1 FY26 results show the potential, but the scandals still linger. The company has drastically improved margins, reduced debt, and delivered strong sales growth. The planned ₹500 crore fund raise, if done efficiently, could further de-leverage the balance sheet and finance working capital.
Strengths:
- Turnaround story with strong Q1 numbers.
- Debt reduction is real.
- Export business remains a growth driver if disputes are resolved.
Weaknesses:
- Export receivables ₹1,592 crore stuck in legal limbo.
- Inventory under court custody – affects operations.
- Reliance on other income to pad profits.
Opportunities:
- Rising gold prices and festive demand.
- Possible settlement of disputes unlocking cash.
- Expansion into new markets post fund raise.
Threats:
- Legal battles dragging on.
- Promoter stake erosion – governance concerns.
- Competition from Titan, Kalyan, and local players.
Conclusion:
PC Jeweller is not yet out of the woods. The operational turnaround is real, but investors need to treat this like a speculative bet. The fundamentals are improving, but litigation and governance risks remain high. At ₹15, the stock offers upside if recovery sustains, but it’s a high-risk/high-reward play. For now, this is a stock for those who like thrillers, not safe rom-coms.
Written by EduInvesting Team | 01 August 2025
SEO Tags: PC Jeweller, Q1 FY26 results, jewellery sector, turnaround stock, debt reduction
