BSE: 543709
Market Cap: ₹700 Cr.
Company Profile
PNGS Gargi Fashion Jewellery Limited was incorporated in 2009 and does the business of fashion jewellery. As of this writing, this is the only listed company of its kind
The promoters of PNGS Gargi Fashion Jewellery (Bse Small cap) are the same as those of P. N. Gadgil & Sons. However, there are no cross-holdings or cross-transactions between these companies; the entire management and setup are separate.
What is the Business Model of PNGS Gargi Fashion?
The business operates on a franchise model. Some of the locations are company-owned and company-operated, while others are franchise-owned and franchise-operated. Additionally, they offer online delivery, but currently only through their website.
Last year, this Bse Small cap company’s management committed to adding 40 new stores for which they surpassed and reached 55 stores.
In the recent talks with the analysts, they will be adding 22 new stores this year out of which 7 will be standalone stores. The company is planning to maintain a balance between online and offline channels.
Product Segments and Revenues
Their product segment consists of three main categories: the silver jewellery segment, which has generated revenue of ₹29 crores; non-silver products, where PNGS has made around ₹9 crores; and the diamond segment, which they have recently started and has generated over ₹12 crores.
How is the management of PNGS Gargi Fashion Jewellery Ltd?
The first notable point is that all three directors are Non-Executive Directors, meaning they do not have roles in day-to-day management. This is a positive sign, as Non-Executive Directors typically provide an unbiased perspective and constructive criticism, which is helpful for decision-making.
The company does not have a Managing Director (MD) or Chief Executive Officer (CEO), which means that critical decisions are made by the chairman.
However, there is a Chief Financial Officer (CFO) named Mr. Vishwas Laxmikant Honrao but there is not much information available about him.
How Much Money the Management is Taking Out Of the Business
No Director has received any remuneration during the financial year 2023-24. The CFO is taking 3.85 times the median salary of PNGS Jewellery. This means that if an average employee is paid ₹1LPA, the CFO is taking ₹3.85LPA which is very much acceptable.
Moreover, the company secretary is taking 2.46 times of median salary. In the FY24 they both have got a combined increase of 11 times the median increase.
Financial Analysis of PNGS Gargi Fashion Jewellery Ltd
Since no fashion jewellery company is listed other than PNGS, we compared the data of two famous private companies, GIVA Jewelly and Bluestone. and it was found that both of thrm are loss making event at their respective stages.
Bluestone financials show its making losses continuously
PNGS Gargi Fashion (Bse small cap), however, is operating with a 16.7% net margin (average of 3 years). This has increased investor profitability ratios like Return on Equity (ROE) to 34%.
Another positive sign is that the company has minimal to no debt. When compared to the shareholders’ equity, this debt accounts for just 7% of it.
A major concern for investors is the Inventory days, which indicates the number of days it takes for the inventory to be sold. Ideally, a lower number is better. However, for PNGS Gargi, it is 402 days, which is more than a year.
PNGS Gargi Fashion Jewellery’s director speaks on Increased Inventory Days
Mr Amit Modak mentioned that an inventory period of 292 days is considered good in the jewellery business, with their average being around 200 days, which he considers a good number.
He also noted that the inventory period increased this financial year due to the addition of gold and diamond items, which were used in the last 6 months only.
What is Happening in the Indian Jewellery Market
India is a major market for fashion and jewellery. It’s evident from weddings and festivals that Indians place significant emphasis on jewellery. With the rise of lightweight and fashionable jewellery, the industry is experiencing a boom.
Data from 2022 indicates that this sector contributes 7% to India’s GDP, a significant figure for any industry. In the 2022 fiscal year, jewellery exports amounted to USD 22.7 billion.
The jewellery industry anticipates potential duty and tax reductions on mainstream precious metals like gold and silver. With the approach of the third quarter, which encompasses the wedding and festive seasons, the sector’s revenues are expected to soar. Duty cuts during this period will facilitate growth for companies.
