Billionaire Ajay Piramal, chairman of Piramal Group, pauses during an interview in Mumbai, India, on Friday, Sep. 2, 2016. (Photographer: Dhiraj Singh/Bloomberg)

Piramal Enterprises’ Profit Jumps 61 Percent In Q4; Shares Hit Record

Shares of Piramal Enterprises Ltd. hit a record after the company reported a 61 percent jump in net profit for the January-March quarter, driven by its financial services vertical.

Shares rose as munch as 13 percent, pushing the company’s market capitalisation beyond Rs 50,000 crore on Monday.

The conglomerate, which runs pharmaceutical, financial services and real estate financing businesses, is also looking to raise up to Rs 5,000 crore by either issuing equity shares or convertible securities to support future growth.

Financial Services Boosts Q4 Earnings

The company’s net profit for the three months ended March rose 61 percent to Rs 310.96 crore over the year-ago period, despite a Rs 70-crore exceptional gain from sale of properties in the base quarter.

Revenue from operations grew 49.6 percent to Rs 2,462.6 crore. Revenue from pharmaceuticals, its the largest vertical, jumped 32.3 percent. Financial services revenue surged 82.3 percent, increasing its share in overall revenue from 32.4 percent a year ago to 40.6 percent.

Loan book grew by 87 percent to Rs 24,400 crore at the end of March compared to Rs 13,048 crore a year ago, led by continued growth of wholesale lending business.

Ajay Piramal, chairman of Piramal Enterprises, attributed the earnings to a strong growth across all businesses.

We remain steadfast in our commitment to generate year-on-year improved performance and to drive innovative strategic business initiatives that bolster growth, strengthen our market leadership and consistently create long-term value for our shareholders.
Ajay Piramal, Chairman, Piramal Enterprises, In Earnings Statement

Other Triggers

The company applied for a retail housing finance licence in the fourth quarter and also entered into a strategic alliance with Ivanhoé Cambridge, a real estate subsidiary of Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), to provide capital to blue-chip residential developers. According to the earnings presentation, the company continues to look for such strong partners to ensure long-term capital for steady business growth.

The government’s ‘Housing for All by 2022’ scheme and the latest measures announced to promote affordable housing has generated significant interest in housing finance.

Piramal Fund Management, the financial services arm of the Piramal Group, is also extending a fresh loan of about Rs 1,800 crore to premium residential project builder Lodha Developers, according to a report in the Economic Times.