Piramal Enterprises Ltd


#961

https://www.bloomberg.com/news/articles/2018-07-24/housing-downturn-puts-20-billion-in-indian-bank-loans-at-risk


(Growth_without Debt) #962

Latest credit rating report -
https://www.icra.in/Rationale/ShowRationaleReport/?Id=69155
ICRA takes note of the fact that debt funded acquisitions coupled with lower profitability for residual businesses have impacted the debtprotection matrix of PEL (excluding financial services business). ICRA will continue to monitor the impact of Piramalā€™s acquisitions on profitability & market share besides improvement in operating cash flows. Moreover PELā€™s ability to monetize some of its investments to improve liquidity profile of the residual businesses and improvement in debt protection metrics remain important in maintaining its credit profile
Credit weaknesses: (1) Weak operating cash flows and return indicators for residual businesses (2) Financial profile characterised by leveraged capital structure and weak debt protection matrix (3) Ability to sustain asset quality for its financial services portfolio

Credit rating agency having positive outlook on Pharma and other business but negative outlook on their landing businesses.


(Mahendra243) #963

Results for Q12019


(manivannan.g) #965

Impressive Finance and Pharma business numbers, especially that GNPA %:


(Growth_without Debt) #966

Can someone find absolute number of NPA instead % . % is very much misguiding for the initial rapid loan growth as more new loan cover absolute NPA number in% term of measurement


(Yatharth) #967

Every quarter, I get here something that is not anticipated or understood easily. This quarter it is one off loss of such a high magnitude. While Board here heaps praises on transparency of Piramal Group, to me it is extremely difficult to predict any CONSOLIDATED range of numbers. Am I alone?


(abhishkjain2626) #968

0.3% GNPA on a 47k cr book is ~141 crores. 3 yr lagged GNPA comes to 141/7611= 1.85%


(Growth_without Debt) #969

Itā€™s not good as Piramal Mgt claims


(bharat19) #970

Agree with youā€¦! Very difficult to understand the Business structure with so many subsidiaries and Associates/JV. Even the results too are complicated to understand. 60 Subsidiaries/JV/Associates and Parent company corresponds to revenue of 2900 Cr of which 2000 Cr are not reviewed by Auditor.

Even results are difficult to understand most of the times.
Results of 25 Subsidiaries are neither audited by Deloitte nor by any otherā€¦Deloitte just rely on what management tells !


Disc: Tracking , No Investments


(nil_71) #971

No wonder, ownership of MF institution is near Zero in PEL


(Chirag) #972

A very valid point.

If some small cap would have done it then people would have screamed ā€œchor companyā€ and shorted the stock to hell.

But Ajay Piramal is above any suspicion.


(MK) #973

Why did the management have to take the 452 crs write off in the first place itself?

The Imaging business was sold at Rs. 7.99crs, which is much below its carrying value.

Either was the management wrong by a wide margin in estimating the value of this business and hence carried it at such high value or they are wrong now in selling a 452 crs business for 7.99 crs (fire sale)?

Why did the management not take the write off / impairment before the sale in a structured / one-time fashion and why did they wait for this event to come up?


(Mahendra243) #974

No wonder it has delivered 29% annualized returns over last 30 years
MF owing shouldnā€™t be used as a yard stickā€¦FLLā€™s holds major chunk and that shouldnā€™t be either considered as +veā€¦as long as the incremental earnings comesā€¦i am happy to stick my neck out and will hold itā€¦and if someone wants to hold a diversified business in one companyā€¦this is it

Disc:Super bullish and too biased


(Yatharth) #975

ā€œDisc:Super bullish and too biasedā€ You need not say this, Sir. But the questions about 452 Cr write off are still valid.


(bharat19) #976

People even took this very lightly here when Piramals were fined for insider trading way back in 2016 !
https://www.thehindubusinessline.com/news/piramals-exceo-fined-for-insider-trading-in-abbott-deal/article9180965.ece
People took the Flashnet deal too very lightly as Ajay Piramal can not go wrong with his investments !


(Rohit Chauhan) #977

Please see the annual report page 272, the imaging subsidiary had a negative networth of 400 Crs of so. I dont recall the exact accounting, but for a 100% subsidiary, the carrying value is passed through the P&L only on disposal. The holding in shriram group also is a bit similar to that ā€¦company does not pass the changes in the value of this holding in the P&L and is adjusted against the networth. If the PEL were to dispose off this holding, then the gains would pass through the P&L


(Growth_without Debt) #978

[quote=ā€œMahendra243, post:974, topic:324ā€]
No wonder it has delivered 29% annualized returns over last 30 years
ā€œpast performance is no guarantee of future resultsā€ . Business model of past was full of Cashā€¦present model is full of debtā€¦past Abbott deal was at premiumā€¦preset deal of Imaging was at lossā€¦Past Piramal was very conservative in doing dealā€¦present piramal is doing lightning speed deal of 1000 croresā€¦still counting on his ability!!


(Mahendra243) #979

It is still been contestedā€¦no one is gulity unless provenā€¦flashnet they have issued clarificationā€¦i dont see anything wrong in that

for financial services/lending debt is the backboneā€¦dont say me that banks shouldnt raise capital via equity and other debt instrumentā€¦thatā€™s how it works


(bharat19) #980

I am still looking for the answers.

SEBI fined them after the investigations.


(Mahendra243) #981

pel