PC Jeweller Curbs Exports in Credit Crunch

RAPAPORT… PC Jeweller plans to reduce its exports by more than a
quarter during the current fiscal year as it looks to minimize its credit needs
in a tighter Indian lending market.



The company receives payment for exports several months
after a transaction, and therefore has to take bank loans to buy raw materials
and support the business, Sanjeev Bhatia, PC Jeweller’s chief financial
officer, told Rapaport News Monday. Shifting focus toward domestic sales
will boost its financial position, as those customers typically pay
immediately, it said in a statement last month.


“The company wants to rationalize [its] export…business as
the credit availability is getting squeezed,” Bhatia said in the statement.


The company, which manufactures, retails and exports
jewelry, slashed outbound shipments by 89% in the second fiscal quarter ending
September 30. It aims to cut exports by 26% to INR 20 billion ($286.7 million) for
the full fiscal year ending March 31, 2019, from INR 26.9 billon ($385.6
million) last year. The segment currently represents about 5% of its sales.


Total revenue fell 37% to INR 16.63 billion ($238.4 million)
in the three months ending September 30 amid a “subdued market,” while profit
dropped 38% to INR 937.2 million ($13.4 million), it said. Domestic sales
declined 16%.


Image: PC Jeweller store, India. (PC Jeweller/Facebook)