Piramal Enterprises (PEL) has posted a 500% rise in consolidated net profit to Rs 3,491 crore for third quarter ended December 31, helped by multiple one-off gains, even as it targets Rs 1 trillion of total assets under management by FY27. It had posted a net profit of Rs 581 crore a year ago. Revenue from operations rose 41.41% to Rs 3,231.64 crore from Rs 2,285.22 crore a year ago.
A consensus estimate of Bloomberg analysts was expecting the firm to post a consolidated net profit of Rs 459.70 crore and an operating profit of Rs 677.40 crore.
“The one-offs include a Rs 3,437-crore contingent tax liability that was created on uncertain tax positions at the time of DHFL merger, which was reversed following the final assessment received in December. That’s the big one-time item,” Piramal Capital and Housing Finance (PCHFL) MD Jairam Sridharan said in an interaction. PCHFL is a wholly-owned subsidiary of PEL.
Following the restructuring of Shriram Capital, the company received shares in listed and unlisted entities of Shriram group companies, which resulted in a fair value gain of Rs 977 crore (Rs 717-crore initial recognition and mark-to-market gains of Rs 260 crore in Q3). Further, there was also a gain of Rs 129 crore on buyback of non-convertible debentures of PCHFL that were issued at the time of the merger, he added.
“In Q3, there was a strong growth in retail and based on that our retail AUM rose to 43% of the total AUM mix,” he added.
PEL’s net profit before exceptional gains rose 369% to Rs 3,545 crore in Q3, compared with Rs755 crore a year ago. “The Q3 performance is in line with our commitment towards building a large diversified NBFC, with retail lending comprising two-thirds of the assets in the mid- to long-term. In retail, we have delivered sustained growth across key parameters over the last one year,” PEL chairman Ajay Piramal said.
During the quarter, PEL’s AUM stood at Rs 64,867 crore and retail lending grew to 43% of AUM from 33% in the year-ago quarter. “We expect AUM to rise to Rs 1 trillion by FY27, and we are on track. The overall AUM will remain flat for another couple of quarters, following which it will start to grow,” Sridharan added.
PEL expects Q4 and FY24 to be good, despite a bit of slowdown in the market after the festive season.