One of the Fastest Growing Companies

PC Jewellers-A brief Profile

Started in April 2005 in Karol Bagh Delhi

Founder- Padam Chand Gupta and Balram Garg

The company has now stores in 11 states across

india(Chhattisgarh,Gujarat,Andhra Pradesh,Karnataka,Punjab & Madhya

Pradesh)Chairman-Padam Chand Gupta(28%

shareholder)Mnaging Director-Balram

Garg(36% shareholder)Turnover-Rs.4018 Cr (FY 13)(and in December 2013,it had already crossed Rs.3788 Cr for the first nine months of FY 14)-an impressive doubling from

Rs.2209 Cr just two years earlier

P C Jewellers V/s other competitors

-Lower Making Charges1)PC Jewellers have lower making charges & also offer the option of returning jewellery within one week for

a full refund whereas other jewellers usually retain the making charges on returns(P C J’s effective manufacturing & inventory strategy allows it to make this offer)

2)About 30% of the jewellery it sells is non-designer,which involves low making charges3)Company’s manufacturing plant lets the company to save 2-3% on making charges

Jewellery Market in India

-The 3 Lakh Crore market is slowly

becoming organized, with about 20% of all regional & national players becoming

organized-The figure drops to 7-10% if you count only large players such as

Titan,Keshavlal Dalpathbhai Zaveri & Sons ,Joyalukkas,Kalyan Jewellers,Gitanjali & PCJ among others

Size of Jewellery Market-3 Lakh Crore

(Organized Market-

Rs.50000 Crores)

(Unorganized Market-

Rs.2.5 Lakh Crores)

P C Jewellers strategy on

Organized Markets As consumers

switch to shopping at organized jewellery outlets,P C Jewelers

has been quick to leverage the opportunity.

Ex:P C Jewellers opened 11 stores in 2013 & 6 stores in

2012

Market Leader Titan has 190 stores & Gitanjali 101 stores ,in comparison ,P C

Jewellers only has 41 stores till date & has become a multi-region player only recently

Titan is the only PAN India player with 4-5% market share

Success factors of P C Jewellers

1)Selling more of Gold than Diamonds

2.Looking for outside markets-P C Jewellers overseas market comprises NRI’s looking for handmade Indian Jewellery.The machine made designs that

are otherwise popular abroad are not the company’s forte & it has decided to stick to its knitting

-The company has intentionally kept their exports sales at around Rs.1,000 Crores for the past two years while

continuing to expand domestically

3.Localization of Jewellery designs-The company ties up with local

designers in each location, in addition to getting jewellery manufactured at its central manufacturing unit in Delhi

-In 2013,PCJ ventured into South India for the first time opening stores in

Mangalore,Bengaluru & Hyderabad(50% of the inventory of this market is localized due to the preference for local

designs)

Shilpa Shetty Inaugurates the First Showroom in M G Road,Mangalore

P C Jewellers Stores

P C Jewellers Stores PlanP C Jewellers weighs every option very carefully & on multiple parameters before taking a decision

P C Jewellers has already finalized first four stores to be launched in FY 15 in Patna,Jammu,Guwahati & Ranchi

An internal team from PCJ surveys all potential locations, considering the city’s growth, purchasing power of the people, the ratio of organized to unorganized jewellers,preference for diamond Versus Gold Jewellery etc before making its recommendation to the management

A third of new stores are opened in cities where P C Jewellers are already present & break-even here is usually in under six months. The next 33% are opened in the same region where we are present & here break-even is between six & nine months .The remaining 33% are opened in entirely new regions & break even is in about a year.

All stores of PC Jewellers are company owned. But the company off late has idea of going to Franchisees in

smaller cities because of; 1)Lower investment requirement

2)Franchises will allow PC Jewellers to expand more rapidly

Obstacles in Jewellery Market

1.For new Playerso RBI has withdrawn the lease provision for Gold

hedging, thus increasing working capital requirements of jewellers

Earlier a jeweller could lease Gold from a bullion banker for 90 days at a fixed price by merely paying

3-4% interest:ExIf someone leased 1 kg Gold for 90 days & sold

0.5 KG on day 20,he would pay for that quantity only then & that too at the agreed price,thus hedging

himself from fluctuations in Gold priceoNow, a jeweller needs to pay upfront for Gold or seek different hedging mechanisms

2.RBI ‘s authorization on hedging

The RBI has allowed only TITAN to hedge with

international markets as it is the only jeweller with a Gold import license while all other companies import through

intermediaries

Impact of hedging on P C Jewellers

P C Jewellers was 100% hedged earlier, now the ratio is down to 70 % & it is relying on

other mechanisms such as hedging with MCX &buying

physical Gold & selling to others on paper

3.RBI’s provision• In 2013,The RBI introduced the 80:20 rule to cap

shooting Gold prices. This means that 20% of all imported Gold has to be re-exported after value addition

• For P C Jewellers, this policy fits as their exports stand at 25% but the ratio will come down as domestic revenue

outgrows exports.

Franchisee based storesP C Jewellers is planning to opt for franchisee based stores. This route will allow P C Jewellers to expand more rapidly

Online retail portalP C Jewellers is working on pushing sales through its online retail portal

IPO Proceeds(Amount)P C Jewellers has over Rs.358 Crores worth of IPO proceeds of the total Rs.603 Crores raised in December 2012 & a negligible debt-to-equity ratio.

P C Jewellers Future plans

Diamond PortfolioP C Jewellers will be focusing on

their high-margin diamond business

for growth

P C Jewellers Product Portfolio

Diamond Jewellery

Pendant

Neclaces

Rings/Ear Rings/Nose Rings

Bangles

Bracelets

Mangal Sutra

Gold Jewellery

Coins

Rings/Ear Rings

Bangles

Gents Kada

Chains

Necklaces Set

Wedding Jewellery

Diamond Necklaces

Diamond Ring/Ear Rings

Diamond Mangal Sutra

Kada

Spectrum Jewellery

Diamond Pendant

Diamond Ring/Ear

Rings

Bangles

Spectrum Jewellery by P C Jewellers

Anup George RebelloAsst.Manager

The Catholic Syrian Bank Ltd