Piramal Enterprises Q1 - Strong Retail Loan Growth; Legacy Book Will Be Aggressively Run Down: Motilal Oswal

Motilal Oswal Report

Piramal Enterprises Ltd. reported Q1 FY25 net profit of ~Rs 1.8 billion (previous quarter: ~Rs 1.4 billion). This included an exceptional gain of ~Rs 1 billion from recoveries in AIF portfolio.

Reported PAT in Q4 FY24 included provision write-back on AIF investments of Rs 11.4 billion and stake sale in Shriram Investment Holding, resulting in gain of Rs 8.7 billion.

Piramal Enterprises' net interest income rose 6% YoY and 2% QoQ to ~Rs 7.2 billion. Pre provision operating profit at ~Rs 2.4 billion declined ~76% YoY. Total assets under management grew 10% YoY and declined 2% QoQ. Wholesale 2.0 AUM grew 11% QoQ to Rs 70.7 billion, while Wholesale 1.0 AUM declined ~50% YoY/ 11% QoQ to Rs 130 billion.

Retail AUM grew ~45% YoY to Rs 505 billion with its share in the loan book increasing to ~72% (previous quarter: 70%).

Gross stage III/net stage III increased ~30 basis points each to 2.7%/1.1%. Stage III provision coverage ratio declined by ~5% QoQ to ~60%. Total ECL/EAD declined by ~70 bp QoQ to ~4.4% of the AUM.

Total SRs declined ~6% QoQ to Rs 45.8 billion. As resolution processes continues, SR portfolio will continue to reduce in the near term.

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