CRISIL Limited has downgraded PC Jeweller's long term and short terms rating to the bank loan facilities of the Company to CRISIL D (default). Crisil said that the downgrade in the ratingis due to invocation of letters of credit, the company's overutilization in working capital limits for more than 30 days, and the fact that the liquidity profile of the group has deteriorated in past few months on account of cash flow mismatches. There has also been rising concern of regulation in the sector, including further increases of import duty on jewellery.
The company however said that after a weak September quarter, Q3 has seen a cash flow recovery due to the festive season. "The cash flows have started," the company said, "by the end of November, 2019 PC Jeweller has adjusted 90% of the devolved SBLCs".