Piramal Enterprises Q1 Results: Net profit surges 52% to Rs 276 crore on improved margins, lower credit costs

The consolidated June-quarter net profit at Piramal Enterprises rose 52% to Rs 276 crore, driven by lower credit costs and improved margins.

“The strong (consolidated) profit growth this year is primarily driven by our retail business, which recorded a 37% growth in AUM, credit costs fell while margins improved,” Jairam Sridharan, managing director, Piramal Enterprises, told ET.

However, on a standalone basis, it reported a 39% drop in net profit to Rs 181 crore due to a 19% decline in interest income - to Rs 396 crore.


The company’s assets under management stood at Rs 85,756 crore, up 22% year on year, while the NBFC’s net interest margin rose 10 basis points to 5.9%.

“We have not yet benefited from the repo rate cuts announced by the central bank. The effects are just starting to show at the end of the quarter, but our margins have not been affected by the cuts and are only expected to get better in the next quarter,” said Sridharan.

The non-banking finance company’s net worth currently stands at Rs 27,174 crore.

The share of the retail loan book was 81% at Rs 69,000 crore, with a product mix of housing, personal, business and used car loans. Of this, 66% of the retail book is in affordable housing loans and loans against property.

Piramal’s legacy book has also been reduced to only 7%, allowing room for new loan growth, Sridharan said. Nearly 15% of the book is in the form of unsecured loans. Piramal’s gross non-performing assets (NPA) are at 2.8%, with a net NPA at 2%.

The company expects to complete the merger of Piramal Finance with itself by September this year.