Earnings Review
Piramal Ent Oct-Dec PAT in green on exceptional gains
This story was originally published at 18:23 IST on 27 January 2025
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--Piramal Enterprises Oct-Dec consol PAT INR 385.6 mln vs INR 23.8 bln loss
--Piramal Enterprises Oct-Dec consol revenue INR 24.49 bln vs INR 24.76 bln
--Piramal Enterprises: One-time income of INR 3.76 bln in Oct-Dec
--Piramal Enterprises Apr-Dec consol PAT INR 3.83 bln vs INR 18.21 bln loss
--Piramal Enterprises Apr-Dec consol revenue INR 68.59 bln vs INR 75.47 bln
--Piramal Enterprises total AUM at INR 783.62 bln Dec 31, up 16.0% YoY
--Piramal Enterprises retail AUM at INR 590.93 bln Dec 31, up 37.0% YoY
--Piramal Enterprises gross NPA ratio at 2.80% Dec 31 vs 3.10% a qtr ago
--Piramal Enterprises net NPA ratio at 1.50% Dec 31, flat vs qtr ago
MUMBAI – Piramal Enterprises Ltd. posted a minor net profit in the quarter ended December on a consolidated basis due to an exceptional gain from alternate investment fund recoveries. The bottom line in Oct-Dec was INR 385.6 million, compared with a loss of INR 23.76 billion a year ago. In Jul-Sept, the company had reported a consolidated net profit of INR 1.63 billion.
The company made an exceptional gain of INR 3.76 billion in Oct-Dec compared with a one-time provision of INR 35.40 billion it had made in the third quarter of last following the Reserve Bank of India circular on investments in alternate investment funds. This had led to the company posting a huge loss in that quarter.
Ajay Piramal, chairman of Piramal Enterprises, had said last year the company was confident of making a full recovery of these investments. The company said on Monday that it had made alternate investment fund recoveries to the tune of INR 5.51 billion in Oct-Dec, which includes a gain of INR 3.76 billion. It added that it expects to make "further significant recoveries" in Jan-Mar and FY26.
Exceptional gains apart, Oct-Dec saw Piramal Enterprises report a 1.1% fall in its consolidated revenue from operations to INR 24.49 billion, with interest income up 13.4% on year at INR 21.89 billion. On the expenses front, total expenditure was up 15.6% at INR 27.92 billion, with finance costs surging 23.7% to INR 13.64 billion.
Total assets under management were up 16% on year at INR 783.62 billion as on Dec. 31. Retail assets, which comprise 75% of total assets, grew 37%. The company said 78% of the retail book is secured.
"While the overall macroeconomic environment remains challenging with subdued growth, we are encouraged by steady growth in loan disbursements, AUM growth, and sustained asset quality," Ajay Piramal was quoted as saying in a release. "Continued improvement in the operating performance of our retail lending business is encouraging," Piramal added.
The company's legacy assets under management rundown continued and were down 45% on year at INR 103.53 billion, making up 13% of total assets under management. The figure is seen falling further to under 10% by the end of the current quarter. The consolidated net interest margin continued to trend upwards, rising to 5.7% for the reporting quarter, up from 5.1% in Jul-Sept and 4.9% last year. The average cost of borrowing was up 10 basis points sequentially at 9.2%.
On the asset quality front, the gross non-performing assets ratio stood at 2.8% as on Dec. 31, down from 3.1% at the end of September but up from 2.4% a year ago, while the net bad loan ratio was unchanged on quarter at 1.5%. At the end of December 2023, the net NPA ratio was 1.1%. Credit cost for Oct-Dec was 1.9%, up from 1.6% in Jul-Sept.
On the proposed merger of Piramal Enterprises with Piramal Capital and Housing Finance Ltd., the company said the process should be completed by September. The RBI has advised Piramal Capital and Housing Finance to change the name to Piramal Finance Ltd. "The application for name change is being processed with ROC (Registrar of Companies)," Piramal Enterprises said on Monday.
For the nine months ended December, Piramal Enterprises reported a consolidated net profit of INR 3.83 billion compared with a loss of INR 18.21 billion a year ago. Shares of Piramal Enterprises ended 7.7% lower on Monday at INR 914.50 on the National Stock Exchange. The company announced the results for the quarter after market hours. End
Reported by Christina Titus
Edited by Saji George Titus
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