February 14, 2017

Oct-Dec 2016-17 earnings review of Piramal Enterprises

Piramal Enterprises Oct-Dec consol net profit margin growth flat YoY
Feb 13

Higher operating profit from its financial services and its
pharmaceuticals business segments drove Piramal Enterprises Ltd to record a
on-year jump of 32% in its consolidated net profit to 4.04 bln rupees in
    Segmentwise data of the company showed the financial services segment
profit to more than double to 3.95 bln rupees in the December quarter from
1.84 bln rupees a year ago.
    Pharmaceuticals business of the company recorded a segment profit of 339
mln rupees in Oct-Dec, up 28% on year.
    Piramal Enterprises' information services business, on the other hand,
recorded a on-year fall of 10% in segment profit to 1.60 bln rupees in the
reporting quarter.
    The company's consolidated total income grew by 31% to 23.42 bln rupees,
driven by on-year increases of 96%, 8.3% and 9.3% in the segment revenues
from the financial services, pharma and information segments.
    The consolidated operating margin of Piramal Enterprises stood at 46.3%
in the December quarter, 850 basis points higher than that in the year ago
    The segment margin, calculated as the percentage of segment profit to
segment revenue, rose the highest in the company's financial services segment to
43.7% in from 39.9%. Following it was the pharmaceuticals segment whose
margin went up to 3.5% from 2.9%. On the other hand, the information
management services business saw segment margin decline to 34.6% from 42.0% a
year ago.
    Though the operating margins grew at a robust pace, the consolidated net
profit margin of the company showed a near flat growth to 17.3% in Oct-Dec
from 17.2% a year ago.
    This was because of a sharp increase in the company's interest costs in
Oct-Dec which stood at 5.91 bln rupees, 130% more than the year ago quarter.
The company said this was primarily on account of increase in debt for making
investments under financial services business and partly for the acquisitions
in its pharma business.
    "This quarter (Oct-Dec) witnessed new acquisitions... We remain
committed to our overall business strategy of efficiently allocating capital
towards growing both organically and inorganically," Ajay Piramal, chairman
of Piramal Enterprises said in a company statement.
    In its pharma segment, the company said its global pharma business
revenue grew 5% on year to 8.70 bln rupees while its domestic consumer
products business rose 28% on year to 850 mln rupees. The company said
despite demonitisation, most brands under its consumer healthcare products
performed better than expectations.
Today,  Piramal Enterprises shares ended at 1,811.10 rupees on the NSE, up
1.94% over Friday.

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