So what will be the correct PE now? should be same as earlier 30 ?
As per their presentation, normalised profit is Rs 1551 cr, which is around Rs 86 per share. So, at price of Rs 2416, PE ratio is around 28.
So does that mean their was some goodwill to the tune of Rs. 10,000 crs which is getting amortized once it for call, creating a 10,000cr notional loss and hence a ~3,500 crs deferred tax asset?
If yes, how did such a large goodwill get created in the first place?
Apologies to ask this pertinently and thank you for your earlier reply.
(1) This time in con-call management themselves stretching too much for rating upgrades. It raises doubts !. Let management improve quality parameters needed for rating upgrades so that rating agency upgrades company rating.
(2) Loan book growing rapidly and it would take time for seasoning. However, in such exponential initial loan book growth, NPA get suppressed in % term but if you take in absolute term it will give real picture. Any one evaluated NPA in absolute fig.?
Listened to the con call. A few minor observations
- Total 58 mins. Management kept talking for the first 30 mins. Only 28 mins for Q&A
- They kept talking about Revenue/Profit cagr for the last few years. And surprisingly they also talked about stock price CAGR/comparison with nifty.
- They dont want to call themselves lenders to real estate. But call themselves solution providers.
- They dont see any major headwinds in real estate. Nor in their pharma business.
Discl : No holdings
In the concall, an analyst from Motilal Oswal asked the management about the 100 bps change in RoA figures between FY2018 and 9MFY18, and the reasons for the same. Management seemed surprised and promised to get it clarified offline. However reading the Q4 results update report from MOSL, it appears that management did not clarify even later, as the analyst has specifically called this issue out and marked it as response from management awaited.
As others have mentioned, it was less of a Q&A session and more of one way speech from Mr. Piramal and more so from Mr.Jijina.
Link to the audio recording for those interested: https://www.youtube.com/watch?v=8emTEocREQc
As we can see in the slide below, the sales and profit growth has slowed down in last few qtrs
With infusion of capital of Rs 5000 Cr in financial business and Rs 2000 Cr in Pharma business (from Rights and QIP) and HFC business just beginning to gain traction, I am sure the growth will continue.
@hitesh2710, what are your thoughts about the Q4 results since you have invested recently?
Check out the new presentation given to the stock exchanges. The ROA has been changed from 3.1 to 3.9.
Could you please share the link where @hitesh2710 said that he bought Piramal recently.
i can’t locate the link but I very clearly remember that he has bought Piramal post right issue when price fell below rights issue price of 2380. He purchased it more as “techno funda” pick so it was mentioned on some other threads where technical charts were being discussed.
Please see the link as requested:
I dont know why there is so much issue with my buying PEL.
Yes I did buy PEL some time ago and have been holding it since. The recent results seem to be suggesting some kind of moderation in the earlier high growth rate and probably reflected in the stock price which seems to have been under pressure almost since the time of rights issue. There seems to be a time correction going on in the stock price where price has remained consistently below 200 day moving average without really collapsing.
AP is up to his usual corporate rejig antics and we need to see what comes out of it. I think when a lot of small/midcaps have corrected to the tune of 20-30-40% or even more a 10-15% in PEL should be a healthy correction.
Business wise finance remains the main growth engine with pharma and healthcare analytics being the drags to overall performance.
SOTP suggests that finance business is trading at c.3 times F18 book value. Given the dip in RoA and RoE, that seems to be a fair valuation. Even the potenitial upside from demerger of pharma business seems priced in. This is a great management, so I’d hold my initial position. But I can’t say the stock is juicy at this price.
About Piramal Enterprises, he said the company is a blue chip, high quality business with relatively low uncertainty. “Ajay Piramal is focused on delivering shareholder value in ethical ways,” Pabrai added.
Does he have stake in PEL ? though he is talking about PEL several times, I couldn’t read anywhere that he has stake in PEL
Even if he does have a holding it’s unlikely anyone knows about it. Being a company with market capitalisation in thousands of crores there’s hardly any non institutional investor with more than 1% stake. And, if shareholding is below 1% disclosures needn’t be made in the shareholding pattern.
Yes he has a stake in piramal. In one of his videos on Twitter he is seen wearing the brands of all his stocks on his Jersey. That had piramal on it as well.
Very likely. In this latest interview, he almost calls Ajay Piramal to be best in the game promoter.
Recall reading, some time over last few days, that Pabrai has a holding in PEL. Very likely on a twitter thread given to fitness challenge with Pabrai on a cycle in a striking Jersey. Some one inquired from where to get that jersey!! These two stayed in my mind, Pabrai in PEL and Samir Arora in Amazon [ In a piece Arora wrote].