India’s PC Jeweller posts third straight quarterly loss on mounting legal battles

BENGALURU (Reuters) – India’s PC Jeweller reported a quarterly loss for a third straight quarter on Monday, hurt by a plunge in sales as the company remains embroiled in a legal tangle with multiple banks.

The company reported a consolidated net loss of 1.72 billion rupees ($20.68 million) in the first quarter ended June 30 from a profit of 744.3 million rupees a year ago.

A slew of lenders, including State Bank of India, Indian Bank , IDFC First Bank and Union Bank, have deemed PC Jeweller’s borrowing accounts as non-performing and have moved to court seeking loan recalls.

For its part, the Delhi-based jeweller has challenged its lenders and has sought redressal for alleged grievances.

“(A) disproportionately large amount of sale returns are a practical consequence of the court cases and adverse publicity,” the company said in a statement.

Revenue from operations plunged 87.6% to 676.8 million rupees in a quarter when the Akshay Tritiya festival in April had driven demand for gold.

Finance costs at the company contributed over 50% of total expenses during the quarter.

PC Jeweller further said its domestic turnover was hurt as operations were disrupted amid a liquidity squeeze due to the ongoing litigation.

In June, a court order directed SBI, India’s largest lender, to maintain the status quo and not take further legal actions against the Delhi-based jeweller.

However, SBI moved an insolvency plea against the jeweller at the National Company Law Tribunal (NCLT) last month in an attempt to recall loans, as per media reports.

Rivals Tribhovandas Bhimji Zaveri and Kalyan Jewellers reported a profit rise as sales remained strong amid higher gold prices.

Shares of the company fell 1.3% on Monday ahead of the results, after falling about 67.6% so far this year.

($1 = 83.1716 Indian rupees)

(Reporting by Biplob Kumar Das in Bengaluru; Editing by Janane Venkatraman)