MOSL: PIRAMAL ENTERPRISES (Buy)- A steady quarter for FS business; Pharma business disappoints
Piramal Enterprises: A steady quarter for FS business; Pharma business disappoints
(PIEL IN, Mkt Cap USD4.6b, CMP INR1865, TP INR2735, 46% Upside, Buy)
- Piramal Enterprises’ (PIEL) 2QFY19 PAT grew 25% YoY to INR4.8b. The Financial Services business continued its strong operating performance, while the Healthcare business witnessed continued sluggishness in sales.
- Financial Services: While loan book growth of 12% QoQ/59% YoY is commendable, margins have been under pressure. NIM has consistently contracted from 8.0% in 2QFY18 to 6.9% in 2QFY19, despite the capital raise in 4QFY18. This is partly due to product mix shift toward retail home loans/LRD and partly due to intensifying competition. An interesting thing to note is the increasing share of borrowings from other corporates (up from 1% to 16% YoY). GNPA ratio has increased to 0.5% from 0.3% a quarter ago.
- Pharma Services: The healthcare business delivered a subdued performance in the quarter, with overall growth of 2% YoY being dragged by a 32% YoY decline in India consumer product sales. Global Pharma EBITDA margin, however, has remained largely stable at 20%.
Piramal Enterprises is a pharmaceutical group based in India. Co. is engaged in the production, packaging, marketing, sale, import, and export of pharmaceutical products in the form of tablets, capsules, liquids, powders, creams, ointments, granules and bulk drug. Co. is engaged in the manufacture of glass containers. Co.'s brands include Phensedyl, Haemaccel, Stemetil, Paraxin, Phenergan, Gardenal, Pentids, Tixylix, Supradyn and Tenormin. Co. maintains over 295 issued patents plus 808 pending patent applications, spread across categories such as compositions of matter, methods of treatments, biomarkers, diagnostics, pharmaceutical compositions and drug delivery systems.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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