P C Jeweller, which has been growing rapidly in the last few quarters in terms of financial performance, has seen its shares drop from Rs 600 in Jan 2018 to Rs 110 currently.
On Friday, the shares dropped a staggering 30 per cent from Rs 236 to a low of Rs 159. In the last two days again the fall is sharp and is now Rs 110. Nobody seems to know the reasons for such a sharp fall, since there has been no fundamental changes in the company.
Initially, in the month of Feb, 2018, there was massive selling pressure, after reports of a business relationship to Vakrangee, a company which was being investigated by SEBI for price manipulation.
However, it seems Vakrangee had bought shares of PC Jewellers as part of treasury operations.
The management of P C Jeweller has clarified that it has made all disclosures to the exchanges. No shares have been pledged, neither have the promoters reduced their stake.
The massive fall in P C Jeweller has left investors wondering, what's happening in the counter. On early Wednesday morning the shares opened above Rs 145 and is now trading at Rs 110. Data from NSE showed that the delivery based selling was very less to the tune of just 13 per cent on Monday.
This means a lot of speculative trading is taking place in the counter. An interview by the management suggests that the company continues to focus on its growth path. It opened a few stores in the month of March and April and there has been an improved footfalls. One is not sure what is cooking in the counter.
However, the shares may not be a bad bet to hold from a long-term perspective of 1-2 years, as the company seems to be growing rather rapidly. To contain the damage done to the stock, the company has announced a board meeting, in which it will consider a buyback of shares.
With the consumption theme playing out, this stock maybe a good bet at the current levels. The board will meet on May 25 for dividend, annual results and to consider a buyback.