Piramal Enterprises Q2 Review - DHFL Integration Without Any Incremental Hit: ICICI Securities
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ICICI Securities Report
Piramal Enterprises Ltd.’s consolidated financials, post Dewan Housing Finance Corporation Ltd. integration and completion of review by auditors, were key to watch out in Q2 FY22 earnings.
The fair value of DHFL assets acquired was pegged at Rs 203 billion (Rs 185 billion of retail plus Rs 20 billion of wholesale book), netting of cash on DHFL’s book (net of creditors entitlement) of Rs 140 billion from purchase considerations of Rs 342.5 billion.
There were no incremental gross non performing assets against net assets acquired and the extent of mark-down of more than 50% suggests adequate buffer for any unforeseen risks.
Adjusting for one time expense of Rs 1.43 billion related to transaction cost (including stamp duty) for DHFL acquisition, Piramal Enterprises reported Q2 FY22 normalised net profit of Rs 5.4 billion (against our expectations of Rs 5.8 billion).
Effectively leveraging the acquired network to cross-sell existing retail products will be key going forward.
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