Piramal Enterprises plummets 8% after Rs 1,536 crore loss in Q2 on high provisions

Shares of Piramal Enterprises plummeted 7.85% to Rs 819 in Thursday’s intraday trade after it suffered a Rs 1,536 crore consolidated net loss for the September quarter on account of hefty loan loss provisions in its first-ever quarterly results as a listed and regulated non-banking finance company following the demerger of its pharma business.

The demerged financial services player’s operating profit shrunk 12% at Rs 456 crore against Rs 516 crore, while the loan loss provisions of Rs 3,311 crore forced it to report a net loss for the quarter despite a 34% rise in net interest income at Rs 934 crore.

The lender's gross non-performing assets ratio stood at 3.7% at the end of September with the net NPA ratio being at 1.3%. Its assets under management stood at Rs 63,780 crore, which is 35% higher than what it was before its acquisition of Dewan Housing Finance. The acquisition was completed in September last year.


“Our size now places us in a dominant position amongst large NBFCs in India,” chairman Ajay Piramal was quoted as saying in a statement issued by the company. “Retail lending business continues to grow faster than our earlier guidance, taking us closer to our aspirations of becoming a more retail-oriented NBFC,” he said.

Piramal’s retail loan book now accounts for 43% of the overall loan book against 12% before the merger. In the wholesale lending business, Piramal said the asset recognition cycle has mostly been completed and provided for against possible credit risks.

At 10.34 am, the scrip was trading 7.39% lower at Rs 823.20 against its last day’s closing price of Rs 888.85 apiece. Also, the stock has fallen nearly 57% in the last six months while it has dropped about 70% year-to-date.