Image: Joshua Navalkar
Piramal Enterprises Ltd (PEL), the flagship firm of the diversified conglomerate Piramal Group, reported a 61 percent year-on-year rise in its consolidated net profit for the three months ended March 31, 2017 to Rs311 crore. The impressive growth in profitability was largely a function of PEL’s operating turnover growing 46 percent to Rs2,463 crore in the same period, while expenses rose only 14 percent to Rs1,401 crore.
All three business segments in which PEL is present – pharmaceuticals, financial services and information management – exhibited topline and bottomline growth. Real estate, the other large business of the group led by billionaire Ajay Piramal, isn’t a part of PEL.
To fund future growth, especially in PEL’s growing financial services business, PEL announced a fund raising plan of up to Rs5,000 crore, which was approved by the company’s board of directors at a meeting on Friday.
For the full financial year 2016-17, PEL’s revenue was up 34 percent at Rs8,547 crore; while net profit rose 38 percent to Rs1,252 crore in the same period.
The company reported a 135 percent year-on-year rise in operating profit at Rs1,119 crore in the last quarter of FY17, leading to a robust operating profit margin of 44 percent for the period, versus 27 percent a year earlier.
The growth in PEL’s consolidated revenue was substantially aided by an 81 percent year-on-year rise in turnover from the financial services business to Rs1,000 crore in the January-March quarter. What is interesting to note is that PEL’s financial services business – comprising loans to real estate projects and asset management – is now an almost equal contributor to the company’s topline along with its pharma business.
In FY2016, PEL’s pharma business accounted for 54 percent of its total consolidated turnover, while financial services accounted for 27 percent. For the last financial year ended March 31, 2017, pharma contributed 45.5 percent to PEL’s turnover, while financial services added close to 40 percent.
PEL’s share price gained 2.83 percent on the BSE on Friday to close at Rs2,609.45 per share. The bourse’s benchmark S&P BSE Sensex declined 0.21 percent on the same day to end at 30,188.15 points.