 "Piramal Enterprises Q3 results: Firm back in the black with Rs 39 cr profit")
Non-Banking Financial Company (NBFC) Piramal Enterprises posted a net profit of Rs 39 crore for the quarter ended December 31, 2024, compared to a loss of Rs 2,378 crore in the same period last year.
In Q3 FY24, the company had reported an exceptional loss of Rs 3,540 crore due to a one-time provision on its Alternate Investment Fund (AIF) book, following the Reserve Bank of India (RBI) circular on AIFs.
“Since then, the profitability situation has remained steady. In this quarter, against the AIF provision made last year, there was a recovery of Rs 550 crore, resulting in a Rs 376 crore gain in the profit and loss account,” said Jairam Sridharan, managing director, Piramal Capital & Housing Finance, during a media interaction following the Q3 results announcement.
Sequentially, profits declined by 76 per cent from Rs 163 crore in the September quarter, owing to elevated provisions. The provisions in the quarter nearly doubled to Rs 648 crore compared to Q2 FY25.
Net interest income grew by 13 per cent year-on-year (Y-o-Y) to Rs 940 crore in Q3 FY25 from Rs 835 crore in Q3 FY24. Net interest margins (NIMs) improved to 5.7 per cent compared to 4.9 per cent in the same period.
The total Assets Under Management (AUM) expanded by 16 per cent Y-o-Y to Rs 78,362 crore, driven by growth in the ‘Growth’ business, which rose by 40 per cent Y-o-Y to Rs 68,009 crore. The discontinued Legacy business rose by 45 per cent to Rs 10,353 crore.
The consolidated Gross Non-Performing Assets (GNPA) of the company decreased to 2.8 per cent from 3.1 per cent in the September quarter, while net NPA remained flat at 1.5 per cent sequentially.
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The credit cost of the company increased to 1.9 per cent from 1.6 per cent in Q2 FY25.
Sridharan also stated, “We are expecting a deferred consideration of $140 million to come to us in the next financial year as part of a divestment of an entity called Piramal Imaging in 2018. The deferred compensation due to us has now been confirmed.”
Regarding the merger of Piramal Enterprises with Piramal Capital & Housing Finance (PCHFL) on December 23, 2024, the RBI has advised PCHFL to change its name to Piramal Finance Ltd. and submit the new certificate of incorporation and Memorandum of Association (MoA) indicating the new name and the intended business as NBFC-ICC. The application for the name change is being processed with the Registrar of Companies (ROC). The company expects to complete the merger process by September 2025, it stated in its press release.