Stock to watch: PC Jeweller shares have been on an uptrend after ushering in July 2024. In one month, the jewellery stock has delivered a 70 percent return to its positional shareholders. However, PC Jeweller share price still possesses some upside potential. PC Jeweller shares have been hitting the upper circuit since Monday this week. This means the jewellery stock has touched upper circuit on all five sessions this week.
According to stock market experts, the Government of India (GoI) has announced a 9 percent reduction in the customs duty on gold and silver. This move is expected to reduce the input costs of jewellery brands, including PC Jeweller. They also said that the budget 2024 proposal is expected to boost the export business of jewellery companies. They advised PC Jeweller shareholders to hold the scrip as it may touch the ₹100 mark soon.
Speaking on the reason for the rise in PC Jeweller share price, Sugandha Sachdeva, Founder of SS WealthStreet, said, “The recent reduction in customs duty on gold and silver from 15% to 6% is a significant policy move and is likely to be viewed very positively as it is aimed at boosting the export of jewellery and fostering growth in the precious metals sector. BCD (Basic Customs Duty) is reduced from 10% to 5%, and AIDC (Agriculture Infrastructure and Development Cess) is reduced from 5% to 1%.”
On how it would impact jewellery stocks, Sugandha said, “As a long-term impact, the duty cut is expected to enhance the competitiveness of Indian jewellery in the global market, making it more attractive to international buyers. The policy will likely stimulate a significant increase in jewellery exports by lowering costs, contributing to a positive trade balance. The jewellery sector might see an expansion in market size, driven by export growth and heightened domestic consumption. As for the economic implication, the government might experience a short-term reduction in customs revenue due to the lower duty rates. However, increased export volumes and higher overall consumption could offset this loss through greater economic activity and higher tax revenues from other areas. The growth in the jewellery sector could lead to job creation, benefiting artisans, artisans, and other stakeholders in the supply chain. It would also attract more investment into the jewellery and precious metals sector, fostering technological advancements.”
Expecting more upside in PC Jeweller shares, Sumeet Bagadia, Executive Director at Choice Broking, said, "Those with PC Jeweller shares in their portfolio are advised to hold the scrip by upgrading their stop loss at ₹70. The jewellery stock may soon touch the ₹100 mark if it manages to sustain above ₹70."
On the suggestion to fresh investors, Sumeet Bagadia said, "Fresh investors can also buy PC Jeweller shares, maintaining a buy-on-dips strategy until they sustain above ₹70 apiece. However, fresh investors must maintain a stop loss at ₹70 while taking a fresh position in the jewellery stock."
Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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