PIRAMAL ENTERPRISES 2023-24 Annual Report Analysis

Tue, 18 Jun

PIRAMAL ENTERPRISES has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during the year 2023-24.

PIRAMAL ENTERPRISES Income Statement Analysis

• Interest income during the year rose 12.2% on a year-on-year (YoY) basis.
• Interest expenses were up by 8.9% YoY during the same period.
• Operating expenses declined by 16.3% YoY during the year.
• The company's net interest income (NII) increased by 14.9% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 29.4% in FY24 as against 16.5% in FY23.
• Other income declined by 23.2% YoY during the year.
• Net profit for the year declined by 116.9% YoY.
• Net profit margins during the year declined to -16.8% in FY24 from 111.6% in FY23.

PIRAMAL ENTERPRISES Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	89,343	100,203	12.2%
Other Income	Rs m	11,602	8,915	-23.2%
Interest Expense	Rs m	40,412	44,004	8.9%
Net Interest Income	Rs m	48,931	56,198	14.9%
Operating Expense	Rs m	83,948	70,279	-16.3%
Pre-provision Operating Profit	Rs m	-23,415	-5,166	77.9%
Provisions & Contingencies	Rs m	2,749	2,188	-20.4%
Profit before tax	Rs m	59,002	-32,784	-155.6%
Tax	Rs m	-40,684	-15,949	60.8%
Profit after tax	Rs m	99,686	-16,835	-116.9%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	16.5	29.4
Net profit margin	%	111.6	-16.8

Don't Miss: Key Information for Long-term Investors

PIRAMAL ENTERPRISES Balance Sheet Analysis

• The company's deposits during FY24 stood at Rs 0 m as compared to Rs 0 m in FY23, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 0 m as compared to Rs 0 m during FY23, a rise of 0.0%.
• Cost of deposits for PIRAMAL ENTERPRISES fell 56.8% and stood at 77910.0%, while yield on advances rose to 0.0%.
• The lender's investments fell to Rs 191.4 bn during the year from Rs 296.4 bn in FY23.
• Borrowing stood at Rs 74.7 bn, a growth of 65.8% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 869.5 bn as against Rs 895.4 bn during FY23, thereby witnessing a fall of 2.9%.

PIRAMAL ENTERPRISES Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	310,590	264,850	-14.7%
Advances	Rs m	0	0	0.0%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	180230.0	77910.0
Investments	Rs m	296,427	191,382	-35.4%
Borrowings	Rs m	45,041	74,686	65.8%
Total Assets	Rs m	895,368	869,525	-2.9%

Current Valuations for PIRAMAL ENTERPRISES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs -74.9, a decline from the EPS of Rs 417.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 880.0, stands at -12.1 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 0.7 times, while the price to income ratio stands at 2.0 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	374.4	446.0
Earnings per share (Unadj.)	Rs	417.7	-74.9
Diluted earnings per share	Rs	442.1	-74.7
Avg P/E ratio	Rs	3.6	-12.1
Avg P/ABV ratio	Rs	0.6	0.7
Avg Market Cap	Rs	359,797	203,989
Dividends per share (Unadj.)	Rs	31.00	10.00

Ratio Analysis for PIRAMAL ENTERPRISES

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 0.0x during FY24, from 0.0x during FY23. The credit/deposit ratio tells us how much money a company has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The company's debt to equity ratio increased and stood at 0.28x during FY24, from 0.15x during FY23. The debt to equity ratio of a company tells us how much debt a company uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): PIRAMAL ENTERPRISES's capital adequacy ratio (CAR) was at 35.5% as on 31 March 2024 as compared to 43.6% a year ago. This ratio helps measure the financial strength of the company or any finance company to meet their obligations using their assets and capital.

  A company that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the company's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a company sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the company is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that companies hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the company deteriorated and stood at -6.4% during FY24, from 32.1% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the company deteriorated and stood at -1.94% during FY24, from 11.13% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company deteriorated and stood at 1.40% during FY24, from 11.59% during FY23. The ROCE measures the ability of a company to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a company's gross NPAs to gross advances. PIRAMAL ENTERPRISES's gross NPA ratio stood at 2.4% as of 31 March 2024 compared to 5.1% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a company's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the company has made provisions.

  The net NPA ratio of PIRAMAL ENTERPRISES was 0.1% in financial year 2024. This compared with 2.3% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	0.0	0.0
Debt to Equity Ratio	x	0.1	0.3
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	43.6	35.5
Return on Equity	%	32.1	-6.4
Return on Assets	%	11.1	-1.9
Return on Capital Employed	%	11.6	1.4
% of Gross NPAs	%	5.1	2.4
% of Net NPAs	%	2.3	0.1
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

To see how PIRAMAL ENTERPRISES has performed over the last 5 years, please visit here.

PIRAMAL ENTERPRISES Share Price Performance

Over the last one year, PIRAMAL ENTERPRISES share price has moved up from Rs 782.1 to Rs 880.0, registering a gain of Rs 97.9 or around 12.5%.

Meanwhile, the S&P BSE HEALTHCARE is trading at 37,403.8 (up 0.3%). Over the last one year it has moved up from 25,067.1 to 37,403.8, registering a gain of 12,336.7 points (up 49.2%).

Overall, the S&P BSE SENSEX is up 22.2% over the year.

(To know more, you can check out historical annual results for PIRAMAL ENTERPRISES here and quarterly results for PIRAMAL ENTERPRISES here)