PC Jeweller's (PCJ)sales grew strongly by 25.5% YoY to INR26.4b (est. ofINR25.5b). EBITDA increased by 52.2% YoY to INR2.7b (est. of INR2.6b),while adj. PAT grew 52.1% YoY to INR1.6b (est. of INR1.4b). Segment- wise performance: a) Domestic sales grew 40.1% YoY to INR17.6b,with the EBIT margin expanding 240bp YoY to 13.5%. Sales in the base quarter had declined 20.6% YoY due to demonetization. b) Exports grew 3.9% YoY to INR8.8b, with the EBIT margin expanding 430bp YoY to 8.7%. This is on a high base of 42.6% growth in 3QFY17. EBITDA margin expanded 180bp YoYto 10.2%, led by gross margin expansion of 160bp YoY to 14% (est. of 13.5%).

Vishal Punmiya- Research Analyst (Vishal.Punmiya@MotilalOswal.com); +91 22 3980 4261 Krishnan Sambamoorthy - Research Analyst (Krishnan.Sambamoorthy@MotilalOswal.com); +91 22 3982 5428 Investors are advised to refer through important disclosures made at the last page of the Research Report....

We recently met the management of PC Jeweller (PCJ) to understand the business model and outlook, going forward. We also visited PCJ's manufacturing plant in Noida, comprising an in house designing team of ~75 designers and around 250-300 artisans. Incorporated in 2005, PC Jeweller is the second largest listed jewellery retailer in India, with a higher focus on diamond jewellery and jewellery for weddings. PCJ has established its own manufacturing capacity consisting of four manufacturing facilities and space of 1.07 lakh square feet (sq ft). The...