Jewellery stock in focus after incorporation new subsidiary to foray into Precious Metal Mining

Synopsis: PC Jeweller shares are in focus after announcing entry into precious metal mining through the incorporation of a Republic of Chad-based subsidiary. The move signals backward integration into raw material sourcing. While the entity is yet to commence operations, the strategy could strengthen long-term supply security and cost efficiencies.

The shares of this company, which is engaged in the business of manufacturing, selling and trading gold jewellery, diamond-studded jewellery and silver items and operates in different geographical areas, had its shares in focus today after the company announced the incorporation of a subsidiary to diversify into precious metal mining.

With a market cap of Rs 7,902 crore, the shares of PC Jeweller Ltd are trading at Rs 10; the shares are trading at a PE of 12 compared to its industry PE of 25. The shares have given a return of more than 230% in the last 5 years.

About the Foray

PC Jeweller Limited has made a disclosure to the stock exchanges that its wholly owned subsidiary, PCJ Gems & Jewellery Limited, has incorporated a step-down subsidiary named PCJ Mining SARL in the Republic of Chad. The new subsidiary has a paid-up capital of 1,000,000 CFA francs and is yet to start its operations, which means that the project is still in the initial phase.

The newly formed subsidiary will deal with the extraction of precious metal ores, mining, exploration of minerals, refining, and marketing of mineral products. This is a diversification strategy for PC Jeweller Limited, which has been dealing with the retail and manufacturing of jewellery. This means that PC Jeweller Limited is planning to make a backward integration in the sourcing of raw materials.

It is pertinent to note that PCJ Gems & Jewellery Limited will hold 66% share capital in PCJ Mining SARL. The company has made it clear that the incorporation of the new subsidiary does not come under the related party transactions and that no promoter group company has any direct interest in the new subsidiary.

Strategically, it could be a long-term source of supply security and cost savings if the mining operations are successfully operationalised. However, since the entity has not yet started its business operations and there are no immediate financial details available on the impact of production, this initiative is still a long-term project with risks of implementation.

Financials

The revenue from operations for the company stood at Rs 875 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 639 crores, up by about 37 per cent YoY. Similarly, the net profit stood at Rs 190 crore in Q3 FY26, up compared to the Rs 148 crore profit in Q3 FY25.

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