Piramal Enterprises Q1 Results: Profit down but retail growth strong

Net profit fell to Rs 474 crore from Rs 519 crore a year earlier mainly because interest costs increased 13% to Rs 1114 crore in the quarter ended June 2022 from Rs 985 crore a year earlier.

PEL is in the process of demerging its pharmaceuticals business and listing it as a separate company by the end of December.

Overall the company’s assets under management (AUM) grew 37% to Rs 64,590 crore led by a four times growth in retail loans to Rs 22,267 crore after it completed the Rs 34,250 crore acquisition of the Dewan

(DHFL) last fiscal.

Retail loan disbursements increased 66% from the quarter ended March 2022 to Rs 2,459 crore highlighting the company’s pivot towards retail lending.

Chairman Ajay Piramal said the company is on track to achieve disbursements of Rs 2,500-3,500 cr by the third quarter of this financial year.

“In wholesale, we continue to focus on making our existing loan book more granular as well as building a healthy deal pipeline across real estate and corporate lending. We expect to double our loan book in the next five years, thereby achieving significant growth and making our overall loan book more retail-oriented,” Piramal said.

Retail loans now consist of 37% of the company’s loans up from 12% in June 2021.

Wholesale loans reduced by 1,310 crore as the company focussed on building a retail focused financial services company.

Total provisions increased to 6.2% of overall AUM from 5.7% as of Mar-2022.