Piramal Enterprise Limited (PEL) is one of India's large diversified companies with presence in Pharma, Financial Services and Healthcare Information Management. The Company's pharmaceutical business consists of manufacturing and sale of own and traded bulk drugs and formulations. Its Healthcare segment includes pharma solutions, critical care, consumer products and imaging. Its Financial Services segment includes wholesale lending, alternative asset management and investments in Shriram Group. Its Information Management segment is engaged in Decision Resources Group (DRG). DRG's product and services portfolio consists of data and analytics, research products and global consulting services. The Company offers its products under brands, including Saridon, Lacto Calamine, i-pill/i-know, Polycrol, Tetmosol, Untox, Stop AllerG and Throatsil.
Over the last 2 years, the company has raised ~₹18,000 crore of equity as a result of which, its
equity base increased by 29% and the net debt reduced by 45%.
• It had an unallocated equity of ₹11,029 crore as on 31st March, 2021, which included investments in
Shriram.
• It also raised ₹33,478 crore of long term borrowings in the last 2 years which was utilized to repay
most of its short term commercial paper borrowings.
• It had a cash balance of ₹7,025 crore as on 31st March, 2021 which is ~15% of its loan book size.
• The DHFL acquisition remains on track. It received the RBI (Reserve Bank of India) approval in
February, 2021 and also the approval from the Competition Commission of India (CCI) was received
in April, 2021. It is expected to be completed in the next few months.
• DHFL acquisition fits well into the company’s overall retail strategy as it will enable it to achieve
scale and leverage in the platform to cross-sell, significantly change its loan mix and lower its cost of
borrowings.
• The company is progressing towards transforming itself from a largely wholesale led NBFC (nonbanking financial companies) mostly focused on real estate, to a well-diversified one with the share
Concall Summary PIRAMAL ENTERPRISES LIMITED
of retail at 50% of the lending book in the near term from 12% as of March, 2021. This is done by
undertaking three major strategies: Organic build-up of the retail lending business, completion of
the DHFL acquisition and rationalising its wholesale portfolio to a more granular one.
• During the year, Piramal Pharma Limited raised $490 million of fresh equity capital from the Carlyle
Group for a 20% stake at an enterprise value (EV) of $2.7 billion.
• In the complex hospital generics space, it completed the acquisition of Navin Flourine’s remaining
49% stake in convergence chemicals.
• In Lodha, as on March, 2021, its exposure stood at ₹2,637 crore of which ~₹1,593 crore is in a SPV
(special purpose vehicle) with a 1.5 times cover of fully ready inventory and the balance ~₹1,058
crore is in Macrotech Developers. It recently received a prepayment of ₹431 crore in the month of
April, 2021, so its combined exposure has reduced to ₹2,150 crore.
• In the CDMO business, it announced an investment of $32 million in its Riverview facility.
• Real estate sector witnessed a revival in demand since October, 2020 driven by pent up in demand,
changing customer preferences and Government initiatives.
• Sales in the real estate segment are expected to fall in the month of May but collections for the
company shall not be impacted to that extent.
• Given the company has a strong order book and a lower base of FY21, the Pharma segment is
expected to perform better in FY22. On a long term perspective, the management expects to
maintain an organic growth of 15% for this business.
Over the last 2 years, the company has raised ~₹18,000 crore of equity as a result of which, its
equity base increased by 29% and the net debt reduced by 45%.
• It had an unallocated equity of ₹11,029 crore as on 31st March, 2021, which included investments in
Shriram.
• It also raised ₹33,478 crore of long term borrowings in the last 2 years which was utilized to repay
most of its short term commercial paper borrowings.
• It had a cash balance of ₹7,025 crore as on 31st March, 2021 which is ~15% of its loan book size.
• The DHFL acquisition remains on track. It received the RBI (Reserve Bank of India) approval in
February, 2021 and also the approval from the Competition Commission of India (CCI) was received
in April, 2021. It is expected to be completed in the next few months.
• DHFL acquisition fits well into the company’s overall retail strategy as it will enable it to achieve
scale and leverage in the platform to cross-sell, significantly change its loan mix and lower its cost of
borrowings.
• The company is progressing towards transforming itself from a largely wholesale led NBFC (nonbanking financial companies) mostly focused on real estate, to a well-diversified one with the share
Concall Summary PIRAMAL ENTERPRISES LIMITED
of retail at 50% of the lending book in the near term from 12% as of March, 2021. This is done by
undertaking three major strategies: Organic build-up of the retail lending business, completion of
the DHFL acquisition and rationalising its wholesale portfolio to a more granular one.
• During the year, Piramal Pharma Limited raised $490 million of fresh equity capital from the Carlyle
Group for a 20% stake at an enterprise value (EV) of $2.7 billion.
• In the complex hospital generics space, it completed the acquisition of Navin Flourine’s remaining
49% stake in convergence chemicals.
• In Lodha, as on March, 2021, its exposure stood at ₹2,637 crore of which ~₹1,593 crore is in a SPV
(special purpose vehicle) with a 1.5 times cover of fully ready inventory and the balance ~₹1,058
crore is in Macrotech Developers. It recently received a prepayment of ₹431 crore in the month of
April, 2021, so its combined exposure has reduced to ₹2,150 crore.
• In the CDMO business, it announced an investment of $32 million in its Riverview facility.
• Real estate sector witnessed a revival in demand since October, 2020 driven by pent up in demand,
changing customer preferences and Government initiatives.
• Sales in the real estate segment are expected to fall in the month of May but collections for the
company shall not be impacted to that extent.
• Given the company has a strong order book and a lower base of FY21, the Pharma segment is
expected to perform better in FY22. On a long term perspective, the management expects to
maintain an organic growth of 15% for this business.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.