Gitanjali Gems Ltd continued to be locked in lower circuit for the second day running with the stock losing Rs 81.05 or 20 per cent to Rs 324.30 on the BSE in the morning trade today.

While generally the gem and jewellery stocks have come under some selling pressure in the wake of the Government move to moderate gold imports, the reason for the avalanche of selling the counter has been witnessing in the past two days is not clear, though the FII holding in the stock is high at 19.98 per cent.

The hammering the stock has got in the past two days has brought it close to its 52-week low of Rs 296.50 that it had touched on June 27, 2012.

The stock has lost 50 per cent in just two months after touching a 52-week high of Rs 649.50 on April 23 on the BSE. The rush to sell the stock could be judged from the fact that while 23.80 lakh shares were offered for sale, there were no buy quotes in the exchange.

It is not clear from where the selling is coming from or the reasons for the selling. During 2012-13 fiscal, the company’s earnings were Rs 10,380.66 crore and the net profit was Rs 265.16 crore. The EPS was Rs 28.90, making the P/E, at today’s valuation at less than 10.

While the promoters’ stake in the equity was at 59.44 per cent at the end of last fiscal, FIIs held 19.98 per cent, DIIs held 4.45 per cent and others including retail investors, held 16.13 per cent.

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