Diversified Piramal Enterprises Friday reported an 88 per cent dip in consolidated net income at Rs 456.24 crore for the three months to March, on the high base due to a one-time gain in the same period a year ago.
In FY18, the company had booked a net income of Rs 3,943.98 crore on the back of a deferred-tax gain of Rs 3,569.18 crore following the merger of its subsidiaries.
Excluding this one-time gain, the company said its 'normalised net profit' rose 25 per cent to Rs 470 crore in the reporting period from Rs 375 crore in the year-ago period.
Consolidated revenue from operations stood at Rs 3,679.67 crore for the reporting quarter, up from Rs 2,991.06 crore in the same period a year ago.
For the full fiscal 2019, net income stood at Rs 1,470.12 crore as against Rs 5,120.28 crore in the previous year. But the normalised net for the year rose 25 per cent to Rs 1,936 crore over FY18.
"Strong growth in profitability was on account of higher revenue across all segments. We have been maintaining over 20 per cent growth in net income and revenue for the last 15 years and have been delivering a seven-year revenue CAGR of 28 per cent and a normalised net profit CAGR of 50 per cent," chairman Ajay Piramal told reporters in a concall.
Loan book grew 34 per cent to Rs 56,624 crore, despite volatility in the NBFC sector, he said, adding gross NPAs of its financial services business stood at 0.9 per cent, while provisioning stood at 1.93 per cent of the loan book.
Its wholesale real estate (excluding hospitality and lease rental discounting) exposure has significantly declined from 83 per cent in March 2015 to 63 per cent in March 2019.
"On the other hand, our housing finance book grew to Rs 5,188 crore, representing 9 per cent of the overall loan book. We will continue to reduce our exposure in the wholesale realty segment and plans to take it down further to around 50 per cent this year, and increase the share of loans to other corporate, SMEs and housing finance," Piramal said.
He said the company significantly diversified its borrowings in the year by raising long-term funds of Rs 16,500 crore since September 2018, apart from bringing down the CP borrowings by 50 per cent to Rs 8,900 crore from Rs 18,000 crore in September 2018.
"We hope to reduce the dependence on CPs further down to around 10 per cent of our total borrowings this fiscal year itself and a lot will happen by June itself," he said.
Piramal also said their differentiated business model in pharma has enabled them to sustain higher revenue growth in spite of the pricing pressures and regulatory concerns.
On reports about plans to exit Shriram Capital, he said, "we are evaluating whether it makes sense and value for our shareholders to exit. There is no time limit to do it but if we get the right value, we will exit." The Piramal group invested in Shriram group six years ago.
He further said he is also working to merge all the Shriram group entities and the financial services of Piramal and the insurance activities with the holding company, which is Shriram Capital for better synergies.
Revenue from pharma business grew 11 per cent to Rs 1,477 crore for the quarter and 11 per cent to Rs 4,786 crore for the full year and the revenue from healthcare business grew 16 per cent to Rs 270 crore for the quarter and 10 per cent to Rs 1,332 crore for the full fiscal.
On reports about Piramal looking at acquiring DHFL, he said, "by and large we are conservative as far as acquisition is concerned in the financial space sector.
"We are looking at various portfolios and home loans and DHFL is one of them. We are looking at their portfolio and if at all we go ahead, it will be in acquiring a portfolio, and not investing into the shares of the company."
The group is also planning to raise funds under the India Resurgence Fund, which is an equal joint venture between Piramal Enterprises and Bain Capital Credit to invest in distressed assets, he said as he sees many good opportunities in this space.
Earlier this month, the fund had said it would invest up to USD 144 million (Rs 992 crore) in New Delhi-based Panacea Biotech.