History

PC Jeweller Ltd was incorporated on April 13, 2005 as a private limited company
under the name P Chand Jewellers Private Limited'. Further, the name of the
company was changed to PC Jewellers Private Limited' on October 16, 2007 and PC
Jeweller Private Limited' on December 9, 2009. The company was converted into a
public limited company on August 2, 2011, following which the name was changed to
PC Jeweller Limited'.
PC Jeweller is a leading jewellery company in India in the organized jewellery retail
sector. It has developed a strong brand in north and central India. The company
offers a wide range of products including gold jewellery, diamond jewellery and other
jewellery including silver articles, with a focus on diamond jewellery and jewellery for
weddings.
The company operates more than 50 showrooms under the 'PC Jeweller' brand
located across 23 cities in north and central India with an aggregate area of
approximately 164,572 sq.ft. In addition to the sale of jewellery through it's
showrooms, the company also sells gold and diamond jewellery through online sales
on it's website. It also exports gold and diamond jewellery on a wholesale basis to
international distributors in Dubai and Hong Kong.

1. 2015 Annual Report

2. CaptaLine Equity Research
 Mar Mar Mar Mar Mar Mar Mar Mar Mar During
Year
08 09 10 11 12 13 14 15 16 2013, the
company
Key Ratios
has
Debt-Equity Ratio 1.55 3.03 1.46 0.47 0.81 0.42 0.40 0.46 0.38 invested
Rs 175
Long Term Debt- crore to
0.02 0.02 0.01 0.01 0.00 0.00 0.00 0.00 0.01
Equity Ratio buy gold
and
Current Ratio 1.21 1.15 1.18 1.30 1.30 1.34 1.46 1.60 1.65 diamond
jewellery
stocks for
Turnover Ratios six new
retail
52.3 outlets,
Fixed Assets 48.47 76.83 63.35 73.20 59.32 51.51 44.21 45.77
0 and
proposes
Inventory 2.40 3.68 3.38 4.26 3.53 2.78 2.60 2.26 2.04 to infuse
Debtors 13.54 6.69 4.78 5.86 5.47 5.90 8.20 9.13 8.66 another
Rs 225
Interest Cover crore next
2.65 2.57 3.00 4.29 4.43 3.86 4.06 3.38 3.44
Ratio quarter
for further
11.9
PBIDTM (%) 7.65 9.11 11.84 10.91 11.47 12.49 12.43 10.77
2

11.6
PBITM (%) 7.45 8.92 11.65 10.76 11.25 12.24 12.07 10.46
9

PBDTM (%) 4.84 5.63 7.96 8.40 8.93 9.32 9.05 8.86 7.73

CPM (%) 4.24 5.16 6.94 7.48 7.82 7.48 6.92 6.32 5.83

APATM (%) 4.04 4.97 6.75 7.33 7.60 7.23 6.69 5.96 5.52

28.8
ROCE (%) 26.44 30.53 45.10 60.66 42.77 35.68 28.57 25.41
8

23.2
RONW (%) 36.50 68.75 64.32 60.65 52.48 29.89 20.60 18.57
0

expansion. During 2014, the company has incorporated a new wholly owned
subsidiary namely 'Transforming Retail Private Limited'. As on date the Company
have two wholly owned subsidiaries namely, PC Universal Private Limited and
Transforming Retail Private Limited. The company also opened its showroom at
Bareilly (UP). During 2015, the company signs deal with Blue Nile and also opened its
54th showroom and 1st showroom in Yamuna Nagar.
Source: Capitaline
1. 2015 Annual Report
2. CaptaLine Equity Research
 PC Jeweller Ltd
Industry : Diamond Cutting / Jewellery - Medium / Small
Mar Mar Mar Mar Mar Mar Mar Mar Mar
Year 08 09 10 11 12 13 14 15 16
11.8 10.9 11.4 12.4 11.9 12.4 10.7
PBIDT/Sales(%) 7.65 9.11 4 1 7 9 2 3 7
Sales/Net
Assets 3.55 2.28 4.18 4.25 2.68 2.48 1.98 2.37 2.2
PBDIT/Net
Assets 0.27 0.21 0.49 0.46 0.31 0.31 0.24 0.3 0.24
52.7 54.6 56.9 67.1 66.3 56.1 47.9 51.2
PAT/PBIDT(%) 5 4 8 6 1 57.9 1 3 6
Net Assets/Net
Worth 2.55 5 1.55 1.43 2.04 1.17 1.6 1.34 1.42
68.7 64.3 60.6 52.4 29.8 18.5
ROE(%) 36.5 5 2 5 8 9 23.2 20.6 7
http://www.capitaline.com

You can pick up sales growth from here

Mar Mar Mar Mar Mar Mar Mar Mar Mar

Year
08 09 10 11 12 13 14 15 16

7,259. 6,348. 5,324. 4,018. 3,041. 1,977. 622.7 321.3

Gross Sales 984.85
07 52 83 42 93 06 3 4

Excise Duty 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

7,259. 6,348. 5,324. 4,018. 3,041. 1,977. 622.7 321.3

Net Sales 984.85
07 52 83 42 93 06 3 4

Other Income 49.56 59.19 47.24 20.21 18.56 16.79 18.16 7.24 2.30

Other Operating
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Income

7,308. 6,407. 5,372. 4,038. 3,060. 1,993. 1,003. 629.9 323.6

Total Income
63 71 06 63 49 85 01 7 4

Total Expenditure 6,532. 5,624. 4,743. 3,536. 2,710. 1,778. 573.2 299.0
886.38
+ 70 50 08 64 70 17 7 5

PBIDT 775.93 783.21 628.98 501.99 349.79 215.68 116.63 56.70 24.59

1. 2015 Annual Report

2. CaptaLine Equity Research
Split of revenue as per product category

% Capacit Install Sales

Prod Unit of Pro Sales
Product Ye of y ed Sal Realisation/
uct Measur duc Quan
Name ar ST Utilise Capaci es Unit -Unit
Code ement tion tity
O d -% ty Curr

Gold 2,0 5,7

7113 79.
Jewellery & 16. NA 0.00 0.00 0.00 0.00 83. 0.00
1900 67
articles 00 48

Diamond 2,0 1,4

7113 20.
Studded 16. NA 0.00 0.00 0.00 0.00 56. 0.00
1903 06
Jewellery 00 19

2,0
Silver 7114 0.2 19.
16. NA 0.00 0.00 0.00 0.00 0.00
Articles 1101 7 40
00

Gold 2,0 4,9

7113 77.
Jewellery & 15. NA 0.00 0.00 0.00 0.00 02. 0.00
1900 23
articles 00 77

Diamond 2,0 1,4

7113 22.
Studded 15. NA 0.00 0.00 0.00 0.00 30. 0.00
1903 53
Jewellery 00 46

2,0
Silver 7114 0.2 15.
15. NA 0.00 0.00 0.00 0.00 0.00
Articles 1101 4 29
00

Gold 2,0 4,2

7113 79.
Jewellery & 14. NA 0.00 0.00 0.00 0.00 51. 0.00
1900 85
articles 00 88

Diamond 2,0 1,0

7113 19.
Studded 14. NA 0.00 0.00 0.00 0.00 58. 0.00
1903 88
Jewellery 00 45

2,0
Silver 7114 0.2 14.
14. NA 0.00 0.00 0.00 0.00 0.00
Articles 1101 7 50
00

Gold 2,0 2,8

7113 70.
Jewellery & 13. NA 0.00 0.00 0.00 0.00 16. 0.00
1900 09
articles 00 61

Diamond 7113 2,0 NA 29. 0.00 0.00 0.00 0.00 1,1 0.00
1. 2015 Annual Report
2. CaptaLine Equity Research
Studded 13. 84.
1903 47
Jewellery 00 20

2,0
Silver 7114 0.4 17.
13. NA 0.00 0.00 0.00 0.00 0.00
Articles 1101 4 61
00

2,0 3,0
Sale of 0001 100
12. NA 0.00 0.00 0.00 0.00 41. 0.00
Products 1035 .00
00 93

2,0 1,9
Sale of 0001 100
11. NA 0.00 0.00 0.00 0.00 77. 0.00
Products 1035 .00
00 06

2,0 98
Sale of 0001 100
10. NA 0.00 0.00 0.00 0.00 4.8 0.00
Products 1035 .00
00 5

2,0 62
Sale of 0001 100
09. NA 0.00 0.00 0.00 0.00 2.7 0.00
Products 1035 .00
00 3

2,0 32
Sale of 0001 100
08. NA 0.00 0.00 0.00 0.00 1.3 0.00
Products 1035 .00
00 4

Competitive Strategy
PC Jeweller longterm vision is To create a platform which customers can trust for
purchasing affordable and delightful luxury products online.
PC jewllers plans to target all the income and professional groups through various
offerings. Hence, it focuses both on innovation/creativity and value for money.
Low Cost Leadership:
Through this strategy it intends to target conservative middle-class woman in middle
& lower middle class segment. It entered few Tier 2 cities with small store format and
franchisee stores. Entering these areas at an early stage by educating customers
about branded and hallmarked jewellery will give them an advantage. Value for
Money is the perceived proposition by the segment.
Target Customer Segment Values and Characterisitics:

Profile of Offerings by PCJ

Purchase/Usage
Target Characteristics
Behavior
Segment

1. 2015 Annual Report

2. CaptaLine Equity Research
 Conservative, praise Wear thick Gold mainly Traditional jewellery
Conservative seekers, center of for occasions to show-off offerings in Small stores
Middle-class attention, & be perceived as and franchisees
woman uncertainty avoiding, wealthy
emotion

Small Store format:

Small stores are established in locations within an area of 1000 1500 sq. ft. where
PC Jeweller already has presence. These are located in clustered local jewellery
markets to create comfort to visit for this segment. It mainly focuses on gold
jewellery and also maintains small ticket diamond jewellery.
Franchisee stores:
Beyond Tier 1, in Tier 2 and Tier 3 cities company is adopting franchisee model to
establish the stores. These stores wont require much of variety hence relatively
significant low inventory levels to be maintained. This leads to less investments and
yields high return to PC Jeweller.
Robust Supply Chain:
PC Jewellers vertical integration gives an advantage in having economics of scale
through mass manufacturing. As the segment demand less variety this gives
company a great advantage over other competitors.
Through this strategy its able to target the largest segment which seeks less variety.
Expansion in Tier 2 and Tier 3 at this time would also give company a first mover
advantage over other branded players as no other organized player is present in
these areas. It will also help in building brand loyalty with the customers, as it is a
high ticket purchase for customers they wouldnt switch to new players easily.
Differentiation:
Company is targeting niche segments; teenagers, working professionals and High
net worth individuals (HNI) through differentiation. Through this it offers
contemporary designs for occasional and daily wear. It also makes exclusive designs
in gold and diamond jewellery for weddings. It also ventured into ecommerce
platform WearYourShine.com to service these segments.

Target Customer Segment Values and Characteristics:

Profile of Offerings by PCJ

Purchase/Usage
Target Characteristics
Behavior
Segment

1. 2015 Annual Report

2. CaptaLine Equity Research
 Variety seeker in Flexia SIS, Flexia
Teenagers Fashion- Fads, trendy
Wear light jewellery WearYourShine.com
and Young and do not conform to
on a daily basis
adults social norms &
acceptances.

It targets working
Individualism, Attend social professionals through
Working Confidence in their occasions & wear empowerment
Professionals skills/abilities, tech contemporary
Flexia SIS, Flexia
savvy, jewellery
WearYourShine.com

Passionate, self- Attend high-class Offers high end wedding

expressive, self- social occasions, jewellery inspired by seven
HNIs centered, attention Centre of attraction vows of Indian wedding
seeking, need for and flaunt their tradition
uniqueness wealth Azwa

Large Stores:
These are located in high streets and willing to be one-stop for jewellery products. It
offers vide variety of products in different price ranges. It offers customizability to
customers and also holds designer and exclusive pieces. It offers customer centric
policies like buyback policy and 7days return policy to increase the conversion of
customers.
Flexia Jewellery Collection:
PC Jewellery has launched Flexia brand which is interchangeable which can be
worn in 5-6 ways and each looks different. It was launched as a premium brand,
pricing above INR 2,00,000. Company is currently working on creating sub-brands to
fulfill daily wear needs and launched designs in INR 1,00,000 INR 2,00,000 range. It
is planning to launch Flexis SIS model in range of INR 15,000 75,000.
This brand is positioned towards independent working woman and gift to a newly
married woman.
Azwa Jewellery Collection:
This is a luxury brand targeted towards high end wedding jewellery market. This has
been added to portfolio after acquiring Azva from World Gold Council.
WYSH Smart Jewellery:

1. 2015 Annual Report

2. CaptaLine Equity Research
PC Jeweller is the worlds first retailer to introduce smart jewellery. This jewellery is
capable of getting synced with mobile devices. This brand is supposed to launch in
near future.
WearYourShine.com:
This is a curated marketplace model and it has other brands also on-board like
Gitanjali Gems, PN Gadgil and sparkles jewellery. It targets tech-savvy and young
population. It offers studded and light to medium jewellery at various ranges.
This differentiation strategy and focus on working women will give them an
advantage due to change in consumer preferences towards trendy designs and also
increase in tech-savvy and working population. Focus on exclusive and high end
wedding jewellery will give a great advantage in targeting a huge Indian wedding
market.
Inorganic Growth:
PC Jeweller has acquired Azva from World Gold Council. This is a high wedding luxury
brand inspired by seven vows of Indian wedding tradition. It intended to take
leverage on Azvas inhouse designing, sales teams and its network of manufacturers,
designers, retailers and customers.

Value Chain Analysis

PC Jeweller offers gold, diamond and silver jewelry, with a focus on diamond and
wedding jewelry. The firm takes care of manufacturing, retail and exports of jewelry.
Support Activities
Human Resource Management: It provides necessary training to the artisans to cope
up with the modern trends. Artisans contribute a lot to making the final jewellery as
most of the Indians prefer handmade jewellery. It hired Aon Hewitt to advice
Company on HR systems and processes to ensure faster growth and expansion.
Technology Development: Company foster innovation and it led to launch of Flexia,
the first interchangeable jewellery brand. It has in-house designers who continuously
work on creating modern designs. It uses world class technologies like CAD/CAM to
develop the trendy designs. []
Procurement: PC Jewller procures raw material (gold) on lease to de-risk the
fluctuations in gold price. Through these schemes it fixes price within a period up to
270 days.
Primary Activities:
Inbound & Outbound Logistics: It leverages third parties transportation facilities to
handle both inbound and outbound logistics. In case of in-bound, the quality of the
raw material is high as it procures from gold-canalizing agencies and renowned
diamond-traders.

1. 2015 Annual Report

2. CaptaLine Equity Research
Operations: It owns four manufacturing units and PC Jeweller has the biggest
jewellery manufacturing capabilities compared to its direct competitors. It also has a
vast base of third party manufacturers to outsource as per requirements.
Marketing & Sales: It does marketing through national, regional and store-level
advertising. It also sponsors events to increase the brand awareness. It positions
itself in various ways as per customer segments, empowering working woman and
regional wedding jewellery. []
Service: It offers unbeatable services at both retail centers and through online
channel. It refunds 100% amount if returned in a week otherwise 100% buyback as
per existing gold rates in case of gold jewellery and at a minimal depreciated amount
for diamond jewellery.

Resources & Capabilities

Financials & Growth Rate:
CAGR numbers - Koustav
Manufacturing: (V)
Owning manufacturing for PC Jeweller gives a control to costs and better profit
margins. It also provides a competitive advantage over competitors who doesnt
own. These manufacturing caters to 60% [1] of total demand while rest is outsourced
to vast independent contractors as per requirements. It adopts flexible and hybrid
manufacturing.
Marketing: (V)
It is involved in multiple advertising campaigns, marketing initiatives and sponsoring
events to increase visibility and create brand awareness. It does nationwide, regional
and local (store-level) advertising to increase customer traffic. Firm is also known for
introducing innovative customer oriented campaigns like Jewels for Less and
Swarn Manjusha schemes. Credit Analysis and Research Limited rated Jewel for
Less with CARE A+ (FD), indicating firms commitment in fulfilling financial
obligations.
It targets working woman by focusing on empowerment in ads and positions wedding
jewllery by differentiating as per regional requirements.
Procurement Policy: (V)
Company sources gold under the gold loan schemes, governed by Ministry of
Commerce and Industry, Government of India, from canalizing agencies and
international bullion suppliers to de-risk businesses from price fluctuations. Under
these schemes company fixes the price within a period up to 270 days [2].
Tax Advantages: (V)

1. 2015 Annual Report

2. CaptaLine Equity Research
Two manufacturing units located in Noida, Uttar Pradesh are partly exempted from
income tax until March 31, 2022 and 2025. Two manufacturing plants in Selaqui,
Uttarakhand are eligible to deduct 30% of profits until March 31, 2018 and 2019.
Skilled Labor: (V)
PC Jeweller maintains skilled artisans of over 1000 to make ethnic Indian handmade
gold jewelry. This also provides the company with the flexibility to offer
customizability to customers. It exports its handmade jewellery to B2B players.
Innovation and R&D Team: (V, R, I, N)
Company has a strong team of 75 designers which comes up with contemporary
designs to match customers lifestyles. It makes exclusive designs by keeping eye on
domestic and international trends. It launched Flexia, detachable jewellery set which
can be worn in 5-6 different ways.
Geographical Presence: (V, R, I)
The company currently has presence at 68 retail stores, 54 cities and 18 states. It
has plans to launch 200 new outlets by 2019 through franchisee model and own
outlets. Its the first company to expand to Tier 1 and Tier 2 cities where other
branded show rooms are not there and this would give the company advantage to
build brand loyalty with local consumers.
Product Mix: (V, R)
PC Jeweller targets wide range of segments; Middle class woman, Teenagers,
Working professionals and High net-worth individuals. Its Flexia brand is targeted
towards working professionals and trend seekers. Whereas others are targeted
towards wedding collection.
Online Presence: (V)
PC Jeweller owns Indias leading fine jewellery platform WearYourShine.com,
launched in November, 2014. It offers vast modern collection and wediing collection
from renowned brands like PN Gadgil, Sparkless Jewellery, Gitanjali Gems, Candere
and Diaashi Diamonds etc.
Franchisee Model: (V)
PC Jeweller offers franchisee options beyond Metros and Tier 1 cities where as other
players like Tanishq offers only in Metros. This gives PCJ better control to manage
brand in high streets targeting high individuals as differentiation is more important.
Where as in Tier 2 and 3, it will be operationally effective and it can leverage local
business peoples intelligence and reputation to win over conservative middle-class
woman.

Competitive Analysis:
PC Jeweller Tanishq (Titan) Gitanjali Gems
Inception 2005 1995 1966
Turn over
1. 2015 Annual Report
2. CaptaLine Equity Research
Manufacturing Present Present Present
Market Share 2% 4.4% 2.1%
Rank 4 1 3
Stores 68 160 150
Points of Sale 3,000
Product Mix Flexia, Flexia Mia, Queen of Gili, Nakshatra,
SIS, Azva, WYSH Hearts, Amara, Dia, Rosato,
and others MisMatch, Uttara, Nirvana, Viola, etc.
etc.
Patents 25 facet patterns
Franchisee Model Only in Tier 2 & Only in Metros Majorly in Metros
3 and Malls
Manufacturing Largest facility Present Present
Online Platform

Recommendations:
High Focus on E-commerce:
Increase in mobile penetration and expected growth in internet users (704mn by
2020) will act as major drivers for ecommerce growth along with increase in
disposable income. By 2020 online jewellery market is going to contribute to 8% of
total jewellery retail value of $10.8bn [3]
.
As per MorganStanley AlphaWise Survey, people

Implementation:

References:
[1] 2015 Annual Report of PC Jeweller Limited
[2] CaptaLine Equity Research
[3] The Next India: Internet opening up new opportunities by Morgan Stanley
[4] MorganStanley AlphaWise Research

Retail Management: Text and Cases

http://www.titan.co.in/hot-jewel-tanishq

1. 2015 Annual Report

2. CaptaLine Equity Research
http://www.gitanjaligroup.com/brands/brands.html
http://www.tata.in/article/inside/pybFsQpbYNo%3D/TLYVr3YPkMU%3D
http://wellsinvest.in/companies-strategy/consumer/pc-jewellers-target-of-adding-15-
20-retail-showrooms-every-year/
Appendix:

Financial Performance
8- 9- 10Ma 11- 13- 14- 15-
Year End Mar Mar r Mar 12-Mar Mar Mar Mar 16-Mar
22.1 22.1 40.1
Equity 6 6 6 44.66 133.97 179.1 179.1 179.1 179.1
35.5 152. 1,388. 1,682. 1,990. 2,327.
Networth 3 54.6 04 325.67 555.79 81 26 38 40
1,997. 2,406. 6,098. 7,220.
Enterprise Value 0 0 0 0 0 41 91 65 21
90.5 273. 235. 1,134. 1,623. 2,688. 2,675. 3,302.
Capital Employed 5 14 78 465.52 67 12 24 11 10
21.5
Gross Block 6.63 9.58 1 32.51 70.05 85.97 117.65 169.52 147.7
321. 622. 984. 1,977. 3,041. 4,018. 5,324. 6,348. 7,259.
Sales 34 73 85 06 93 42 83 52 07
18.1
Other Income 2.3 7.24 6 16.79 17.57 20.21 47.24 59.19 49.56
24.5 116.
PBIDT 9 56.7 63 215.68 348.79 501.99 634.98 789.16 782.05
15.5 35.0 78.4
PBDT 6 7 2 166.08 271.58 374.52 481.7 562.34 561.28
23.9 55.5 114.
PBIT 4 2 77 212.71 342.2 492 622.66 766.14 759.44
14.9 33.8 76.5
PBT 1 9 6 163.11 264.99 364.53 469.38 539.32 538.67
12.9 30.9 66.4
RPAT 7 8 6 144.86 231.29 290.66 356.31 378.23 400.88
12.9 30.9 66.4
APAT 7 8 6 144.89 231.44 291.01 350.7 368.78 399.97
13.6 32.1 68.3
CP 2 6 2 147.83 237.88 300.65 368.63 401.25 423.49
Rev. Earnings in 1,810. 2,094.
FE 0 0 0 0 0 0 0 99 02
Rev. Expenses in 1,096. 1,959.
FE 0 0 0 0 0 0 0 76 28
Face Value (Rs) 10 10 10 10 10 10 10 10 10
16.0 24.6
Book Value (Rs) 3 3 37.6 72.92 41.49 77.54 93.93 111.13 129.95
13.9 16.5
EPS (Rs.) 5.85 8 5 32.44 17.26 16.06 19.38 20.45 21.7
Dividend (%) 0 0 0 0 0 10 30 32 33.5
1. 2015 Annual Report
2. CaptaLine Equity Research
Payout (%) 0 0 0 0 0 6.23 15.48 15.65 15.44
Ratio Analysis
Debt-Equity 1.55 3.03 1.46 0.47 0.81 0.42 0.4 0.46 0.38
Current Ratio 1.21 1.15 1.18 1.3 1.3 1.34 1.46 1.6 1.65
Invtry Turnover 2.4 3.68 3.38 4.26 3.53 2.78 2.6 2.26 2.04
13.5
Debtors Turnover 4 6.69 4.78 5.86 5.47 5.9 8.2 9.13 8.66
Interest Cover 2.65 2.57 3 4.29 4.43 3.86 4.06 3.38 3.44
11.8
PBIDTM (%) 7.65 9.11 4 10.91 11.47 12.49 11.92 12.43 10.77
PBDTM (%) 4.84 5.63 7.96 8.4 8.93 9.32 9.05 8.86 7.73
APATM (%) 4.04 4.97 6.75 7.33 7.6 7.23 6.69 5.96 5.52
26.4 30.5
ROCE (%) 4 3 45.1 60.66 42.77 35.68 28.88 28.57 25.41
68.7 64.3
RONW (%) 36.5 5 2 60.65 52.48 29.89 23.2 20.6 18.57
EV/EBIDTA 0 0 0 0 0 3.98 3.79 7.73 9.23
Rate of Growth
(%)
53.6 178.
Net Worth 0 7 46 114.2 70.66 149.88 21.13 18.32 16.93
93.7 58.1
Sales 0 9 5 100.75 53.86 32.1 32.51 19.22 14.34
138. 114.
PAT 0 86 53 117.97 59.66 25.67 22.59 6.15 5.99
M Cap 0 0 0 0 0 0 -14.61 228.42 14.85

1. 2015 Annual Report

2. CaptaLine Equity Research