EUR 120.00 For Business Accounts Only

MOSL: PIRAMAL ENTERPRISES (Buy)-Financing business stable, liquidity situation well managed

Piramal Enterprises: Financing business stable, liquidity situation well managed

(PIEL IN, Mkt Cap USD4.6b, CMP INR2170, TP INR2775, 28% Upside, Buy)

 

• Piramal Enterprises’ (PIEL) 3QFY19 PAT grew 23% YoY to INR6.0b, in keeping with the trend of the past few quarters. Although growth in the Financial Services (FS) business slowed down incrementally, it is commendable against the backdrop of the tough liquidity situation of the past quarter. PIEL raised INR100b in the form of term loans and NCDs during the quarter, and also reduced the share of CPs outstanding from 18% to 15% sequentially.
• Financial Services: Loan book growth moderated to 5% QoQ/45% YoY, which is commendable in this environment. The share of the real estate loan book stands at 69%. PIEL continues scaling up its retail housing loan book well – now at close to INR40b. Margins, however, continue contracting from 8.0% in 3QFY18 and 6.9% in 2QFY19 to 6.6% in 2QFY19. Asset quality remains stable, with a GNPL ratio of 50bp.
• Pharma Services: The healthcare business delivered a healthy performance in the quarter, with overall growth of 8% YoY. Growth was largely led by Global Pharma segment (~14% YoY to INR10.6b), partially offset by the muted performance in the India consumer segment. Global Pharma segment EBITDA margin remained stable at ~21% for 9MFY19.