Piramal Enterprises falls 2% on dismal Q3 show

Shares of Piramal Enterprises Limited traded 1.8 percent lower at Rs 868 in the early trade on January 30 after the company reported a consolidated net loss of Rs 2,377.6 crore for the third quarter.

The drop was on account of an exceptional loss of Rs 3,339.8 crore linked to its investments in alternative investment funds (AIFs). Piramal Enterprises recorded a net profit of Rs 3,545.4 crore in the year-ago period.

Its revenue from operations saw a decline of 12 percent, amounting to Rs 2,475.7 crore.

In the last year, the stock has declined almost 7 percent against an over 20 percent rise in the Nifty during the same period.

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The total asset under management (AUM) increased by 6 percent quarter-on-quarter and 9 percent year-on-year, excluding the impact of provisions related to AIFs. Provisions of Rs 3,540 crore were made per the RBI circular on AIF investments, reducing AUM.

Global brokerage firm Jefferies has an “underperform” call on the counter and has a target price of Rs 775 apiece, 12.3 percent lower from the last closing price of Rs 884.

Analysts said that stress book wholesale loans rose quarter-on-quarter, and loss was due to AIF provisioning.

On January 28, the company announced its decision to divest its shareholding in Shriram Investment Holdings to Shriram Ownership Trust for Rs 1,440 crore.

The company signed a share purchase agreement to divest its entire direct investment constituting 20 percent of the fully paid-up equity share capital in Shriram Investment Holdings.

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