Piramal Enterprises has reported a robust quarterly performance, showcasing significant growth across its key business segments. The company's strategic moves, including the DHFL merger, have contributed to its expanded scale and improved financial metrics.

Strong Revenue Growth

Piramal Enterprises delivered an impressive 20% year-on-year revenue growth, with total revenues reaching Rs. 3,816.00 crores. This growth was driven by strong performances in both the Financial Services and Pharma segments.

Financial Services Segment Performance

The Financial Services segment demonstrated remarkable progress:

• Gross income increased by 25%
• Overall loan book grew by 31% to Rs. 60,600.00 crores
• Retail Assets Under Management (AUM) quadrupled to Rs. 21,500.00 crores
• Retail share of AUM rose from 12% to 36%

DHFL Merger Impact

The approval of the DHFL merger has significantly expanded Piramal Enterprises' scale:

• The DHFL acquisition is yielding over 11% with borrowing costs at 7%, creating a 4% spread
• 3,000 DHFL employees were retained, and an additional 2,000 were hired
• Loan originations restarted at most branches
• Disbursements grew five-fold year-on-year to Rs. 739.00 crores

Pharma Segment Growth

The Pharma business also showed strong performance:

• Revenue growth of 18%
• Nine-month revenues reached Rs. 4,500.00 crores
• CDMO business faced execution challenges due to supply chain constraints and raw material availability
• CDMO order book grew by 32%
• The company expects near 20% growth for the overall Pharma business in FY22

Profitability and Future Outlook

• Normalized net profit grew by 14% to Rs. 888.00 crores
• The company is implementing a twin-engine strategy combining secured lending and embedded finance
• The demerger into separate entities is expected to complete in Q3 FY23

Piramal Enterprises' strong performance across its business segments, coupled with the successful integration of DHFL, positions the company for continued growth. The expansion in retail AUM and the robust performance of the Pharma segment demonstrate the company's ability to capitalize on diverse business opportunities.

Piramal Enterprises Limited (PEL) has reported a robust financial performance for the first quarter, with a significant increase in net profit and strong growth in its retail lending segment. The company's strategic focus on expanding its retail portfolio and optimizing its wholesale business has yielded positive results.

Key Financial Highlights

• Net Profit: PEL's consolidated net profit surged by 52% year-on-year to ₹276.00 crores, compared to ₹181.00 crores in the same quarter of the previous year.
• Assets Under Management (AUM): Consolidated AUM grew by 22% to approximately ₹85,700.00 crores.
• Retail AUM: Witnessed a strong growth of 37% year-on-year, now forming 80% of total AUM.
• Growth Business: Comprising retail and wholesale 2.0, now represents 93% of total AUM.
• Consolidated Profit Before Tax (PBT): Stood at ₹301.00 crores, with the Growth business contributing ₹295.00 crores.
• Net Interest Margin (NIM): Increased by 10 basis points quarter-on-quarter to 5.9%.

Retail Lending Performance

The company's retail lending segment continued to show strong momentum:

• Disbursements: Reached ₹8,718.00 crores, up 28% year-on-year.
• Mortgage Business: Grew by 38% year-on-year to ₹47,101.00 crores, accounting for 55% of total AUM and 68% of retail AUM.
• Customer Franchise: Expanded by 21% year-on-year to 4.8 million.

Wholesale Lending and Asset Quality

• Wholesale 2.0 AUM: Grew by 14% quarter-on-quarter to ₹10,425.00 crores.
• Disbursements: ₹2,302.00 crores during the quarter across real estate and Corporate Mid-Market Lending (CMML) segments.
• Asset Quality: The wholesale 2.0 portfolio maintained zero delinquencies since inception.

Merger Update and Capital Position

• The merger between Piramal Enterprises and Piramal Finance is expected to complete by September 2025.
• Capital adequacy ratio stood at 19.3% compared to 23.6% at the end of the previous year.
• The completion of the merger process is anticipated to reverse about 245 basis points of the reduction in capital adequacy.

Management Commentary

Ajay Piramal, Chairman of Piramal Enterprises, commented on the results: "With the first quarter of the current year, we've had a good start of the year with balanced performance on all key parameters. Our Growth business, comprising of retail and wholesale 2.0, now stands at 93% of our total AUM. With reduced drag of the Legacy business, our consolidated PBT is ₹301.00 crores, out of which Growth business PBT is ₹295.00 crores."

Future Outlook

The company maintains a positive outlook, with targets set for Total AUM, Growth AUM, Retail-Wholesale AUM mix, Legacy AUM reduction, and total consolidated PAT. Management expressed confidence in meeting all these targets based on the first quarter performance.

Piramal Enterprises continues to focus on expanding its retail lending business while maintaining a cautious approach in certain segments. The company's strategic initiatives, including the upcoming merger with Piramal Finance, are expected to further strengthen its position in the financial services sector.

As the company navigates through the evolving market conditions, it remains committed to maintaining a balanced growth strategy and improving operational efficiencies to deliver sustainable value to its stakeholders.