India's PC Jeweller posts third straight quarterly loss on mounting legal battles

Tribhovandas Bhimji Zaveri

14/08/2023 15:00

BENGALURU, Aug 14 (Reuters) - India's PC Jeweller
 PCJE.NS  reported a quarterly loss for a third straight quarter
on Monday, hurt by a plunge in sales as the company remains
embroiled in a legal tangle with multiple banks. 
    The company reported a consolidated net loss of 1.72 billion
rupees ($20.68 million) in the first quarter ended June 30 from
a profit of 744.3 million rupees a year ago.
    A slew of lenders, including State Bank of India  SBI.NS ,
Indian Bank  INBA.NS  , IDFC First Bank  IDFB.NS  and Union Bank
 UNBK.NS , have deemed PC Jeweller's borrowing accounts as
non-performing and have moved to court seeking loan recalls. 
    For its part, the Delhi-based jeweller has challenged its
lenders and has sought redressal for alleged grievances.
    "(A) disproportionately large amount of sale returns are a
practical consequence of the court cases and adverse publicity,"
the company said in a statement.    
    Revenue from operations plunged 87.6% to 676.8 million
rupees in a quarter when the Akshay Tritiya festival in April
had driven demand for gold. 
    Finance costs at the company contributed over 50% of total
expenses during the quarter.
    PC Jeweller further said its domestic turnover was hurt as
operations were disrupted amid a liquidity squeeze due to the
ongoing litigation. 
    In June, a court order directed SBI, India's largest lender,
to maintain the status quo and not take further legal actions
against the Delhi-based jeweller. 
    However, SBI moved an insolvency plea against the jeweller
at the National Company Law Tribunal (NCLT) last month in an
attempt to recall loans, as per media reports. 
    Rivals Tribhovandas Bhimji Zaveri  TBZL.NS  and Kalyan
Jewellers  KALN.NS  reported a profit rise as sales remained
strong amid higher gold prices.          
    Shares of the company fell 1.3% on Monday ahead of the
results, after falling about 67.6% so far this year. 
    
($1 = 83.1716 Indian rupees)

 (Reporting by Biplob Kumar Das in Bengaluru; Editing by Janane
Venkatraman)
 ((Biplobkumar.das@thomsonreuters.com; 9101861583;))