Piramal Enterprises surges 9% on plan to consider share buyback on July 28

Axis Capital estimates the company could go for a buyback of 8 per cent of the existing equity base. The action is positive for the stock and supportive of valuations, it said

Shares of Piramal Enterprises zoomed nearly 9 per cent to Rs 1,095 per share on the BSE in Wednesday’s intra-day trade after the company announced that it will consider a share buyback plan at its board meeting on Friday, July 28. 

The company is scheduled to announce its June quarter results (Q1FY24) on July 28. The management will also hold a conference call with investors and analysts at 5 pm after the results. 

Brokerage Axis Capital maintained its buy rating on Piramal Enterprises with a target price of Rs 1,140 post the development. It said the reduction in equity base will aid return on equity (RoE) for the stock, which was suppressed due to the excessive capital base.

It estimates the company could go for a buyback of 8 per cent of the existing equity base. The action is positive for the stock and supportive of valuations, it said. 

Another 10 per cent gain over its intra–day high today will lead the stock to reclaim its 52-week of Rs 1,202.7, touched on August 26, 2022. 

The stock is currently trading at PE of 8.52 times on a trailing twelve months basis.