PC Jeweller posts third straight quarterly loss on mounting legal battles

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.