Piramal Enterprises Ltd, the financial services division of the Piramal Group, disclosed a consolidated net loss of ₹2,377.6 crore for the third quarter ending December 31, 2023. This substantial setback is attributed to an exceptional loss of ₹3,339.8 crore linked to its investments in alternative investment funds (AIFs).
In contrast, during the same quarter in the preceding year, Piramal Enterprises reported a net profit of ₹3,545.4 crore, as stated in the regulatory filing. The company’s revenue from operations witnessed an 11.9% decline, reaching ₹2,475.7 crore compared to ₹2,811.2 crore in the corresponding period of the previous fiscal year.
The total assets under management (AUM) experienced a 6% quarter-on-quarter and 9% year-on-year increase, excluding the impact of AIF provisions. Provisions amounting to ₹3,540 crore, following the RBI circular on AIF investments, contributed to a decrease in AUM. Despite this setback, the company expresses confidence in the full recovery of the AIF investments.
The consolidated gross non-performing asset (NPA) ratio showed improvement, decreasing by 33 basis points quarter-on-quarter to 2.4%. The net NPA ratio also saw a decline of 37 basis points, settling at 1.1%. The net worth of Piramal Enterprises stood at ₹26,376 crore, with a healthy capital adequacy ratio of 24.3% on the consolidated balance sheet.
Interest income experienced a decrease to ₹1,931 crore from ₹2,006 crore in the year-ago period. However, the company reported total expenses at ₹2,414 crore, down from ₹2,807 crore in the same period a year ago.
Ajay Piramal, Chairman of Piramal Enterprises Ltd, highlighted the impact of the RBI circular on AIFs, leading to complete provisions for such investments. He expressed confidence in the full recovery, citing a positive payment record. Piramal also emphasized the company’s focus on enhancing profitability through operational efficiency and reducing reliance on legacy business contributions.
In a strategic move, Piramal Enterprises announced on January 27 its intention to sell the entire direct investment of 20% in Shriram Investment Holdings Pvt Ltd for ₹1,440 crore. The transaction is pending regulatory approvals and is anticipated to be completed before March 31, 2024, as per a regulatory filing.
“This transaction is aligned with our focus on monetizing non-core assets. The proceeds from the transaction will further strengthen our balance sheet,” the company stated, referring to the sale of Shriram Investment Holdings.
The financial results were disclosed after market hours, with Piramal Enterprises Ltd shares closing at ₹883.55, up by ₹10, or 1.14%, on the BSE.
