Piramal Enterprises drops after PAT slumps 64% YoY in Q1 FY25

Piramal Enterprises tumbled 10% to Rs 887.10 after the company reported 64.33% fall in consolidated net profit to Rs 181.48 crore in Q1 FY24 as against Rs 508.78 crore posted in Q1 FY24.

Total income fell 25.99% to Rs 2,145.38 crore in Q1 FY25 as compared to Rs 2,898.79 crore posted in corresponding quarter last year.

Net interest income (NII) grew by 18% year on year (YoY) to Rs 807 crore during the quarter.

Pre-provision operating profit (PPOP) was at Rs 270 crore during the quarter, up 3% from Rs 263 crore reported in corresponding quarter last year.

Total assets under management (AUM) grew by 10% YoY to Rs 70,576 crore, led by its growth business. During the quarter, Retail to Wholesale AUM mix improved to 72:28 from 33:67 in FY22.

During the quarter, the Growth to Legacy Assets Under Management (AUM) mix improved to 82:18, up from 34:66 in FY22.

Retail AUM jumped 43% YoY to Rs 50,530 crore in Q1 FY25 and Wholesale 2.0 AUM grew by 11% QoQ to Rs 7,071 crore.

The companys consolidated balance sheet shows a net worth of Rs 26,863 crore, with a capital adequacy ratio of 24.4%.

During the quarter, the consolidated Gross Non-Performing Assets (GNPA) ratio decreased to 2.7%, down from 2.8% in Q1 FY24. Similarly, the Net Non-Performing Assets (NNPA) ratio fell to 1.1%, compared to 1.5% in Q1 FY24.

The operating expense-to-AUM ratio for the Growth business decreased by 104 basis points YoY to 4.6%. The companys borrowing cost remained stable at 8.9% in Q1 FY25.

Ajay Piramal, chairman, Piramal Enterprises, said, The Q1 FY25 results show two important trends that highlight our progress and strategy. First, our Growth business continues to build on the momentum established over the past two to three years, now representing the majority of our Assets Under Management (AUM) and net profit. Second, we continue to reduce our legacy discontinued AUM. Notably, in Q1 FY25, the decline of Rs 1,597 crore in legacy AUM had no impact on our profit and loss statement from credit cost.

The expansion of our Growth business reflects our strategy to balance growth, risk and profitability as we develop these businesses. Our asset quality remains stable across retail and wholesale products. Further, our Opex-to-AUM - a key driver of profitability - is consistently decreasing.

We are also making progress in diversifying our borrowings. We successfully raised our first-ever $300 million dollar bond in July 2024, which received a 4X level of demand. We are pleased to see that the foundations for long term sustainable growth and earnings are firmly in place, and we anticipate that the upcoming quarters will demonstrate a consistent journey along this path.

Piramal Enterprises (PEL) is a leading diversified NBFC in India with a presence across retail lending, wholesale lending, and fund-based platforms. The company has investments and assets worth ~$10 billion, with a network of branches across 26 states/UTs.

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