Avoid Gitanjali Gems, advises Phani Sekhar

Phani Sekhar, Fund Manager, PMS of Angel Broking told CNBC-TV18, "I believe this entire consumption basket of which gems and jewellery is one segment where they are going to face large number of challenges going forward in the next 2-3 years considering the amount of both public and private money that has flown into this industry. We are seeing hyper competition emerging so that is clearly a warning sign on the business front."

"But more importantly, there is clearly some governance issues which have cropped up in Gitanjali Gems, which have resulted in the stock shaving off 90 percent from its highs. Till one has satisfactory resolution of all these issues it is a good idea to avoid this kind of stock," he said.