Gitanjali Gems lost 1.5% at Rs 72 at 11:05 IST on BSE, with the stock extending recent decline.
Meanwhile, the S&P BSE Sensex was up 49.62 points or 0.27% at 18,569.06
On BSE, 2.25 lakh shares were traded in the counter as against average daily volume of 2.05 lakh shares in the past one quarter.
The stock hit a high of Rs 75.85 and low of Rs 70 so far during the day. The stock had hit a 52-week low of Rs 56.50 on 12 August 2013. The stock had hit a record high of Rs 649.50 on 23 April 2013.
The stock had underperformed the market over the past one month till 23 August 2013, falling 26.31% compared with the Sensex's 8.78% fall. The scrip also underperformed the market in past one quarter, sliding 87.54% as against Sensex's 5.87% fall.
The small-cap company has equity capital of Rs 92.06 crore. Face value per share is Rs 10.
Shares of Gitanjali Gems (GGL) fell 11% in three trading days from a recent high of Rs 80.90 on 21 August 2013. A foreign bank selling 0.61% stake in the jewellery firm in a bulk deal on Thursday, 22 August 2013 accentuated the fall in the scrip.
Macquarie Bank sold 5.63 lakh shares or 0.61% stake in the GGL at Rs 81.02 per share in a bulk deal on NSE on Thursday, 22 August 2013. The foreign bank held 36.04 lakh shares or 3.92% stake in GGL as at 30 June 2013.
Shares of GGL were on a sustained downtrend recently, sliding a whopping 89.12% in 37 trading sessions to Rs 59.45 on 8 August 2013 from a recent high of Rs 546.50 on 18 June 2013. Thereafter, the stock gained 36.08% in 7 trading days to Rs 80.90 on 21 August 2013 from Rs 59.45 on 8 August 2013 on bargain hunting.
Credit rating agency CARE had on 5 July 2013, revised the ratings assigned to the bank facilities/instruments of GGL and its subsidiaries/step-down subsidiaries and placed them on credit watch. The revision in the ratings takes into account stressed liquidity position of GGL as evidenced by full utilisation of the existing working capital limits which along with the recent RBI guidelines on gold import for domestic purpose would further put pressure on its liquidity position, CARE said. CARE further added that it has also taken into account the significant erosion in share price and market capitalisation of the company in the last two weeks of June 2013 which in CARE's opinion would have weakening effect on GGL's financial flexibility and liquidity. The rating has been placed on credit watch due to lack of adequate information in-order to take a final view, the rating agency added.
CARE said that its ratings on GGL continue to derive strength from GGL's experienced promoters and professional management, its long track record in Gems and Jewellery (G&J) business, its integrated operations across the entire G&J value chain, its extensive portfolio of established brands both in the domestic as well as international markets as well as its strong domestic and international retail presence. The ratings also take cognizance of the financial performance of the group during FY 2012, the first half of FY 2013 and the improvement in the financial and operational performance of its group company, Samuels Jewelers Inc., USA.
CARE further said that the ratings on GGL are constrained by the group's increasing debt levels witnessed in FY 2012 and the first half of FY 2013 and the working capital intensity of the business, its long working capital cycle as well as the challenging macroeconomic environment in key gems and jewellery (G&J) markets.
GGL's ability to maintain its good revenue growth together with an improvement in profitability would continue to remain the key rating sensitivities, CARE said. Further, a concerted effort of the group towards efficiently managing its collection period and inventory levels thereby reducing its dependence on its working capital borrowings would also enhance the financial profile of the group, CARE said.
GGL's consolidated net profit dropped 76.4% to Rs 35.13 crore on 15.8% increase in net sales to Rs 3919.18 crore in Q1 June 2013 over Q1 June 2012.
GGL is an integrated gems and jewellery (G&J) player with operations spanning across the entire G&J value chain. The company's business encompasses activities like rough diamond sourcing, cutting, polishing and distribution, jewellery manufacturing, jewellery branding and retailing.
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