Demonetisation creating a level-playing field: PC Jeweller

The introduction of the demonetisation scheme resulted in discomfort for many sectors. However, the cash clean-up is creating a level-playing field for the organised players, believes Sanjeev Bhatia, CFO, PC Jeweller.He added, the government's demonetisation move was a near-term pain but customers are now coming back and payments are done through banking channels.The government is looking to roll out Goods and Services Tax (GST) by April 1, 2017. Bhatia said the company is working on transition to move to new rate structure post GST. However, they are not sure about the rate at this point of time. In the second quarter of this financial year company's domestic gross margins had come down from 17-18 percent to 14 percent."If the margins are looked from a quarter to quarter point of view then yes they have come down but on a half yearly basis, the gross margin for domestic business has remained stable in first half of this financial year," said Bhatia.Below is the transcript of Sanjeev Bhatia’s interview to Nigel D’souza on CNBC-TV18.Nigel: How have things changed pre and post demonetisation? There was supposed to be near-term pain. Have things returned to normal levels that we saw prior to demonetisation?A: There was a very short term pain – I would like to put it this way – for a few days only when the entire system was in turmoil. But one must appreciate the type of products that we are selling. If you are selling wedding jewellery, frankly, a wedding cannot happen without it. So now, what we are seeing, the customers are coming back and we are looking at a scenario of almost normal footfalls, but the payments are now being done through banking channels. And we are also quite happy in that way because handling cash also a very painful thing. So, we are getting customers and we are getting payments.Nigel: So you believe that this is basically a positive for your sector and for the company as well?A: I feel it is a very positive thing for our company in particular as a sector because now the unorganised players, not in only in jewellery but in any of the sectors who’s entire change was in cash because they used to purchase in cash, get it converted into finished and sell in cash, they are the ones who will be most impacted. Even if you are a jeweller, you have got stock and you cannot accept the banking channels because you are purchasing a lot in cash.