Piramal Enterprises Slides 2.47% Post Q2 FY24 Earnings; Jefferies Trims Target Price

In the wake of Piramal Enterprises revealing its Q2FY24 financials, the company’s shares witnessed a 2.47 percent dip at the opening bell on November 10. The financial services firm reported a Q2 profit of Rs 48 crore, marking a significant recovery from the Rs 1,536 crore loss in the same period last fiscal year.

As of 9:20 am, the stock was trading at Rs 962, a decline from the previous closing value of Rs 984.30. The results were announced after market hours.

According to a regulatory filing, Piramal Enterprises recorded a 16 percent YoY growth in revenue from operations, reaching Rs 2,193 crore for the quarter ending September 2023. The total income of the company also saw a 13 percent surge to Rs 2,205.21 crore during the same period. The gross non-performing assets (GNPA) ratio for the reporting period declined to 2.7 percent, a 10 basis points improvement, while the net NPA ratio remained flat at 1.5 percent.

The filing further highlighted a 5 percent YoY growth in the company’s total assets under management (AUM), reaching Rs 66,933 crore. The reported profit after tax (PAT) for the quarter ending September 2023 decreased to Rs 48 crore from Rs 509 crore in the previous fiscal. Additionally, Piramal Enterprises concluded a share buyback of Rs 1,750 crore during the quarter.

Despite the positive financials, analysts at Jefferies maintained an underperform call on Piramal Enterprises, adjusting the target price to Rs 855 per share due to reported pre-tax profit below estimates. The report noted that the net interest margin (NIM) improved quarter-on-quarter due to changes in loan mix and stable asset quality. However, concerns were raised about low-interest earning assets and elevated operational expenditure potentially limiting return on assets (ROA).

Piramal Enterprises operates as a diversified Non-Banking Financial Company (NBFC), providing retail lending, wholesale lending, and fund-based platforms with a network of branches spanning 25 states/UTs.

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