PC Jeweller IPO is attractively priced, investors can subscribe

MUMBAI: PC Jeweller, a north India based jewellery company is coming out with an initial public offer of around Rs 609 crore at the upper price band to fund its retail expansion plans. The company's performance over the last few years has been impressive. Also the IPO is attractively priced. Investors can subscribe to this IPO.

Business

PC Jeweller is in the business of manufacture, retail and export of gold, diamond and other jewellery with focus on diamond jewellery and jewellery for wedding. The company started its operations in 2005 and since then has opened 30 showrooms in 23 citiies in north and central India with aggregate of 164,572 square feet retail space. The company is also into export of jewellery on a wholesale basis to Dubai, Hong Kong and Singapore. Also the company has its own manufacturing units.

Financials

In FY12, the company's net sales was Rs 3041.9 crore and in the first six months of FY13, it was Rs 1855.7 crore. The company's revenues grew at a CAGR of 75% from FY08 - FY12. Its profit after tax for FY 12 was Rs 230 crore and RS 142 crore in the first half of FY13, which means its PAT margin is around 7.6%. And its operating margin for the first half of the year was 13% which has risen gradually over the years.

It also has a very strong balance sheet with debt to equity of less than 1 and its working capital cycle is also lower than the industry average.

Valuations

At the upper price band of Rs 135, the company is demanding a post dilution price to earning multiple of 9. When compared to tts peers such as TBZ, Thangamail, PCJ is attractively valued. The investors should consider subscribing for this IPO.