Piramal Enterprises tanks 9% after Rs 1,536 crore loss in September quarter

Shares of Piramal Enterprises plunged over 9% to Rs 805.90
in Thursday’s intra-day trade after it reported a Rs 1,536 crore consolidated
net loss for the September quarter on account of hefty loan loss provisions in
its first-ever quarterly results as a listed and regulated non-banking finance
company following the demerger of its pharma business.

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The demerged financial services company’s operating profit
declined 12% at Rs 456 crore against Rs 516 crore, while the loan loss
provisions of Rs 3,311 crore forced it to report a net loss for the quarter
despite a 34% increase in net interest income at Rs 934 crore.

At 2.13 pm, the stock was trading 9.03% down at Rs 807.80
against its last day’s closing price of Rs 888.85 per share. The stock has
plunged over 57% in the past six months and has dropped around 70%
year-to-date.

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The company’s gross non-performing assets ratio stood at
3.7% at the end of September with the net NPA ratio being at 1.3%. The lender
reported assets under management (AUM) of Rs 63,780 crore, which is 35% higher
than before it acquired Dewan Housing Finance. The acquisition was completed in
September 2021. This has happened on the back of the retail business growing
about 12% year-on-year and the wholesale business decreasing by 13%.

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“Our size now places us in a dominant position amongst
large NBFCs in India,” chairman Ajay Piramal said in a statement issued by the
company. “Retail lending business continues to grow faster than our earlier
guidance, taking us closer to our aspirations of becoming a more
retail-oriented NBFC. We are focused on making the wholesale book more granular
and with an increased focus on recoveries/ monetization, we expect the
wholesale book size to moderate in the short term. Further, we are also
investing to build a cashflow & asset-backed real estate and mid-size
corporate lending business,” he added.

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Piramal’s retail loan book now holds 43% of the overall
loan book compared with 12% before the merger. In the wholesale lending
business, the asset recognition cycle has mostly been completed and provided
for against possible credit risks, the company said.