Piramal Enterprises beats market estimates as Q3 profit grows 9.7%

Billionaire Ajay Piramal-owned Piramal Enterprises Ltd reported a 9.7% increase in consolidated net profit for the three months ended December 2021 — surpassing analyst estimates — aided by the performance of the financial services business as the acquisition of Dewan Housing Finance Ltd proved value accretive.

Consolidated net profit stood at Rs 855.08 crore during the December 2021 quarter, compared with Rs 779.69 crore in the corresponding period last year.

On a sequential basis, its net profit more than doubled from Rs 419.17 crore in September 2021 quarter.

The company's consolidated revenue from operations was Rs 3,816.16 crore, up 20.44% from Rs 3,168.61 crore in December 2020. On a sequential basis, revenue grew 23% from Rs 3,105.52 crore.

Other Key Highlights

1) The company saw a 26% surge in employee expenses to Rs 519.50 crore.

2) The cost incurred to purchase finished goods nearly doubled to Rs 249.52 crore.

3)  EBITDA stood at Rs 2,170 crore, compared with Rs 1,891 crore in the corresponding period last year.

4) Operating margin narrowed to 57% compared with 60% a year earlier.

5) Overall loan book under the financial services business grew 31% to Rs 60,00 crore.

6) Retail assets under management (AUM) grew four times to Rs 21,544 crore.

7) Cost of borrowing reduced 180 basis points (bps) year on year.

8) Pharma business, which is being demerged from the parent firm, reported 15% growth in revenue.

9) Acquired minority stake in Yapan Bio to broaden services in biologics space.

Management Commentary 

Piramal Enterprises’ Chairman Ajay Piramal said the third-quarter performance reflects growth across both financial services and pharmaceuticals businesses.

“The acquisition of DHFL has been value accretive and has enabled us to achieve significant growth. It has materially given a further impetus to our business ambitions and targets. The capacity building in talent and technology, together with a robust business expansion plan gives us the confidence to create a sustainable and profitable retail franchise in coming years,” Piramal said.

“In the pharmaceutical business, we have grown well, despite the logistical and supply chain constraints induced by the pandemic. We made further investments for expanding capacity in niche capabilities. Each of our pharma businesses have a compelling plan for their growth and profitability improvement in coming years," he said.

"Further, our initiative to create two distinct sector focused entities is progressing well and we expect to complete the demerger by the third quarter of FY 2022-23 (December 2022), subject to various requisite approvals,” he added.