Piramal Enterprises Ltd

(Rudra Chowdhury) #387

Great post @poddy

Also this overall concern of wholesale lending book in investors is somewhat misplaced, as they have substantial retail lending through SCUF and STFC.

Housing finance of course will bring in the much needed balance on standalone book.

(Rudra Chowdhury) #388

Please go through this interview to understand the business in depth

(Pod85) #389

So I would say that the investments in SCUF and STFC are purely financial for the time being. Both these books do not get consolidated with Piramal book. Piramals book today would be 90% wholesale and 10% SFG lending to sectors other than RE. It remains to be seen how much their retail book I.e HFC/SME/LAP/LRD etc can contribute to the overall AUM

Also what most people forget is that Piramal has a killer pharma business with EBITDA margings going from higher single digits to mid teens and finally to 20-21%. With most listed/unlisted Indian pharma companies facing the heat with USFDA Piramal stands out like a diamond in a coal mine. According to me this business should be valued at higher multiples. His non compete with Abbott ends soon and knowing Piramal there may a surprise acquisition of a pharma company that could be a turnaround candidate under his guidance.

(Saji John) #390

Piramel is always in the news!! http://www.moneycontrol.com/news/business/piramal-enterprises-plans-to-raise-up-to-rs-600-crore-via-ncds-2301339.html

(ashishjp) #391

Is piramal right to enter at current valuation for long term. Asking this because is it good to buy the stock at bull run Or to invest based on business progress.

(Growth_without Debt) #392

Retail investors always eager to ride when stock at its cliff !!
Worst business at excellent price and excellent business at worst price both have lower probability of return - Buffet.
Every stock gives opportunity to buy at right priceā€¦patience is the greatest quality of investor who creates wealth!!

(Bheeshma Sanghani, PhD) #393

Held for a long enough period a stock will ultimately give a return which will be close to the return on capital given by the underlying business it represents regardless of the price you purchased it at. If you purchased it at a high price you may have to wait for several years before it shows a return but ultimately returns will closely track the underlying return on capital if you hang on to it till judgement day.

The key question is how long are you willing to hold on to a stock that shows great ROC but prices move up and down living a life that seems to be independent of the business they are supposed to represent. Since for a large percentage of businesses no one can predict how long a particular ROC can sustain itself the return can also not be predicted.

Thats why financially stable businesses with little change in consumer behavior command a high multiple as the ROC is locked in for a long period of time.

(Storyteller) #395

Rudra Sir

Many thanks. An excellent interview: sharp and lucid. I had saved its viewing for a totally unencumbered
mind state. Just finished viewing-listening.
It adds depth to my understanding of the business as you said and also gives me a much deeper sense
of the thought process directing their business growth in the financial vertical.
The passion is contagious and left me feeling excited about their journey in this domain. Thanks again.
The two important take-aways for me were ā€œrelevantā€ and ā€œinnovationā€ defined as providing solution relevant
right at this time. It means: a continuous innovation stream of products. :innocent::innocent:

(Value Seeker) #396

No flames please.

I have been watching PEL and this thread from the sidelines for some time now. For some reason (bias I guess) I am not convinced to buy into this business. To me it feels too much like a story stock. There is much hype around PEL being like the BRK of India and the greatness of Mr. Piramal as a capital allocator. Only time will tell - but the valuation already assumes a blockbuster exit like the previous one :slight_smile:. The past is no predictor of future success - neither is pedigree. Otherwise Abhishek and not SRK would have been the king of Bollywood ;). I see large bets being made in the RE sector that make me uncomfortable. Goes to show the need for true understanding of the business levers and conviction to buy into the business and the promoter.

(Rudra Chowdhury) #397

Ajay Piramal on the business and outlook. Good watch.
Piramal Finance and Other divisions to be demerged in next 12-24 months

(Rudra Chowdhury) #398

How Piramal Finance stands against competition (May 2017)

Superior growth while maintaining very high asset quality.

(Marathondreams) #399

No hard feelings but feels like case of sour grapes to me :wink: On a lighter note, I think AP is more like Amitabh not Abhishek as this wealth is all created by AP himself not his fatherā€¦

For me, 26 years on consistent return is good enough to put my faith in this company. Not everybody has to agree with me. Only time will tell if pedigree and past performance has any value in this particular case or not.

Disclosure - invested for last 2 years and continue to add

(Rudra Chowdhury) #400

While it is always good to have counter views and validate all risk assumptions for a business, posts like this add very little value.

I would strongly encourage you to present your bear views without any preconceived bias and tell us why do you think what Piramal is doing is risky and might fall apart. That would be quite useful for everyone.

(Sunday) #401

Why is Piramal interested in a stake in the debt-ridden Amtek Auto ?

How does it benefit ?


The news reported has been confirmed to be incorrect as per management update to BSE dated 21st June.

([emailĀ protected]) #403

What would be impact on Piramalā€™s books if they retain the stake in merged entitiy?

(Marathondreams) #404

As per article below

After merger, Piramal Enterprises would not be able to own more than a 10 per cent stake in the merged entity under the Reserve Bank of Indiaā€™s norms on corporates owning stakes in banks, said a banking source.

Knowing APā€™s deal making skills, I guess he may be looking to get enhancement of value of Piramal Enterpriseā€™s stake by getting in the banking sector, which he may sell later at better valuation.

(unmesh) #405

More news on probable deals

(Kranthi Kumar) #406

(Harpreet Singh) #407

what would prevent a PEL sometime in future , basically a large NBFC ( esp after having demerged pharma in the future) to become a bank ā€¦thats natural progression for an NBFC , No ?