Piramal Enterprises has posted a consolidated net profit of Rs 137 crore in January-March, boosted by proceeds from the sale of the company’s share in Shriram Investment Holdings and income tax related gains, and recoveries from holdings in alternative investment funds.
The company had posted a consolidated net loss of Rs 196 crore a year ago.
In January, the company concluded sale of Shriram investments for Rs 1,440 crore, having carrying value of Rs 569 crore.
The Company received an income tax assessment order for 2021-22(April-March), wherein it has been allowed an assessed carry forward loss of Rs 10,627 crore, arising from the merger of Piramal Capital and Housing Finance with the erstwhile Dewan Housing Finance.
The company also wrote-back Rs 1,067 crore from provisions for its holdings in alternative investment funds keeping in mind with guidelines issued by the RBI. The company realised Rs 450 crore from alternative investment fund recoveries during the March quarter.
The company expects to make further recoveries from pending provisions of Rs 2,000 crore.
The company’s assets under management rose 8% year-on-year(y-o-y) to Rs 69,000 crore as on March 31, which aided the bottom-line. The assets under management was fuelled by the company’s growth business.
The growth-to-legacy assets under management mix stood at 79:21 in 2023-24. The growth business comprises retail and wholesale 2.0 lending.
Growth assets under management rose 55% y-o-y to Rs 54,723 crore as on March 31. Growth assets stand at 79% of overall assets under management.
Retail assets under management rose 49% y-o-y to Rs 47,927 crore as on March 31. Mortgage assets rose 38% y-o-y to Rs 32,612 crore. The mortgage business constitutes 68% to retail assets.
The wholesale 2.0 assets under management rose 14% on a sequential basis to Rs 6,347 crore as on March 31. The wholesale 2.0 includes loans to the real estate segment and corporate mid-market lending segment. The growth business comprises 79% of assets under management.
Simultaneously, the company is reducing its wholesale 1.0 or legacy assets. The wholesale 1.0 assets under management fell 22% quarter-on-quarter(q-o-q) to Rs 14,572 crore.
The net interest income, the difference between interest earned and interest expended rose 36% y-o-y to Rs 839 crore in the March quarter. However, the net interest margin fell 100 basis points(bps) y-o-y to 6.8% in the March quarter.
The company credit cost fell to Rs 152 crore in the March quarter from Rs 189 crore a year ago. The gross non-performing asset ratio improved to 2.4% as on March 31 from 3.8% a year ago.
Net non-performing asset ratio improved to 0.8% as on March 31 from 1.9% a year ago.
Separately, the company announced that the board of directors of Piramal Enterprises has approved the merger of Piramal Enterprises with 100% subsidiary Piramal Capital and Housing Finance. With this, Piramal Capital and Housing Finance will be renamed as Piramal Finance.
The merger is expected to be completed in 9-12 months.