PC Jeweller witnessed a robust surge of over 5% in its share value, climbing to an intra-day zenith of ₹164 on the NSE. This uptick followed the company’s declaration of December 10, 2024, as the pivotal record date for its inaugural 1:10 stock split. This strategic initiative entails transforming one ₹10 equity share into ten ₹1 shares.
Key Details of the Stock Split
The restructuring marks a historic juncture for PC Jeweller as the company embarks on its maiden stock split. This maneuver involves recalibrating each existing equity share of ₹10 into ten equity shares, each bearing a nominal value of ₹1.
This transformative decision, ratified by shareholders via a postal ballot on November 21, 2024, and later formalized by the Board of Directors on November 28, 2024, underscores the company’s commitment to enhancing shareholder engagement and market accessibility.
Rationale Behind Stock Splits
Stock splits are strategic instruments utilized to render shares more affordable to retail investors while amplifying market liquidity. By diminishing the face value per share, the company aims to broaden its investor base and invigorate market interest.
Impressive Financial Trajectory
PC Jeweller’s financial performance paints an optimistic picture. For the quarter concluding on September 30, 2024, the company reported a profit after tax (PAT) of ₹179 crore, a substantial rebound from the ₹152 crore loss incurred in the corresponding quarter of the prior year. Moreover, the EBITDA for the quarter registered at ₹129 crore, further solidifying the company’s financial resurgence.
Stock Performance and Strategic Analysis
The stock split announcement reverberated positively through the market, propelling the share price by 3% to settle at ₹158 on Thursday. Notably, PC Jeweller has demonstrated an extraordinary 450% appreciation in share value over the past year, epitomizing robust investor confidence.
Anshul Jain, Head of Research at Lakshmishree Investments, provided a nuanced analysis of the stock’s trajectory. He remarked that PC Jeweller is currently oscillating within a well-defined price corridor of ₹165 to ₹130, presenting a fertile ground for traders employing range-bound strategies. Jain projected that this consolidation phase could extend over the next 6 to 8 months, offering ample opportunities for those adept at buying near the lower boundary and selling at the upper threshold.
Conversely, Jain cautioned trend-following investors about the potential opportunity cost of waiting for a decisive breakout. He advised a prudent “wait-and-watch” stance or a pivot toward other momentum-driven equities until the stock exhibits a definitive directional shift.
