Piramal Enterprises (PEL) Q2 24/25 earnings summary

Executive summary

• Total AUM grew 12% year-on-year to INR 74,692 Cr, with growth AUM up 45% YoY to INR 62,626 Cr and legacy AUM down 49% YoY to INR 12,066 Cr, now 16% of total AUM.

• Retail AUM rose 42% YoY, now 73% of total AUM, with disbursements up 29% YoY to over INR 8,000 Cr.

• Consolidated net profit for Q2 FY25 was INR 163 Cr, with net worth at INR 26,930 Cr and capital adequacy at 23.3%.

• Asset quality remains stable with GNPA at 3.1% and NNPA at 1.5%.

• The Board approved a Composite Scheme of Arrangement with a subsidiary, pending regulatory approvals.

Financial highlights

• Interest income for Q2 FY25 was INR 2,198 Cr, up 22% YoY; net interest income grew 17% YoY to INR 881 Cr.

• Total income increased 24% YoY to INR 1,137 Cr; PPOP rose 58% YoY to INR 396 Cr.

• Operating expenses rose 12% YoY to INR 741 Cr.

• Loan loss provisions increased 60% YoY to INR 317 Cr.

• Net interest margin for Q2 FY25 at 4.6% (consolidated); growth business NIM at 6.6%.

Outlook and guidance

• Legacy AUM targeted to fall below 10% of total AUM by March 2025, with a reduction of INR 7,000 Cr or more in FY25.

• FY25 AUM growth expected at ~15%, with total AUM targeted at ~INR 80,000 Cr by Q4 FY25.

• ROA target of over 3% by FY28 remains unchanged.

• Retail:Wholesale mix expected to shift to 75:25 by FY28E.

• OpEx to AUM in retail targeted to reduce to 3.5%-4% per annum.