Piramal Enterprises (PEL) Q2 24/25 earnings summary

Executive summary

• Total AUM grew 12% year-on-year to INR 74,692 crore, with growth business AUM up 45% YoY to INR 62,626 crore, now forming 84% of total AUM.

• Retail AUM rose 42% YoY to INR 54,737 crore, now 73% of total AUM; legacy (discontinued) AUM reduced by 49% YoY to INR 12,066 crore, now 16% of total, with a target to bring it below 10% by March 2025.

• Consolidated net profit for Q2 FY25 was INR 163 crore, with growth business contributing INR 130 crore.

• Net worth stood at INR 26,930 crore with capital adequacy at 23.3%.

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

Financial highlights

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

• Operating profit for growth business rose 23% YoY to INR 397 crore; PPOP up 58% YoY to INR 396 crore.

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

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

• Core NIM for growth business at 4.5%, consolidated NIM at 4.6%; borrowing cost at 9.1%.

Outlook and guidance

• Legacy AUM reduction of INR 7,000 crore or more expected for FY25, targeting <10% of total AUM by March 2025.

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

• Medium-term AUM growth guidance of 25-26% CAGR; targeting ROA of over 3% by FY28, driven by OpEx reduction, fee income, and margin expansion.

• Credit costs may rise further in coming quarters due to ongoing risk cycle.

• Retail:Wholesale mix expected to shift to 75:25 by FY28.