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Piramal Enterprises Q1 PAT quadruples, revenue up 25%

piramalDiversified Piramal Enterprises Ltd reported a 25% jump in its first-quarter revenue to Rs 1,474 Crores and a quadrupling of net profit to Rs 205 Crores.

Company has delivered a strong revenue performance with growth across all three business segments during the quarter.

63% of the total revenues were generated in foreign currency.

Operating profit for Q1 FY2016 was 93% higher at Rs.300 Crores, primarily driven by strong revenue performance across most of the businesses during the quarter and fall in R&D expenses. R&D expenses were lower during the quarter on account of scaling back of the company’s investments in NCE research in FY2015. OPBITDA margin was higher at 20% in Q1 FY2016 as compared with 13% in Q1 FY2015.

Net Profit for Q1 FY2016 was at Rs.203 Crores. Healthy profitability was mainly on account of improved performance across business segments, lower R&D expenses and higher share of income from associates, partly offset by increase in interest expense and marginal increase in depreciation.

Interest expense for the quarter was higher primarily on account of increase in debt for making investments under Financial Services segment.

There was an exceptional loss of Rs.2.6 Crores in Q1 FY2016 on account of loss on sale of clinical research business in April 2015. Exceptional gain in Q1 FY2015 primarily included gain on sale of 11% stake in Vodafone India for Rs.8,900 Crores (an Investment of Rs.5,864 Crores made in FY2012).

The Piramal Group, led by Ajay Piramal, is one of India’s foremost business conglomerates with a global footprint. With operations in 30 countries and brand presence in over 100 countries, the Group’s turnover exceeded $1 billion in FY2015. The Group’s diversified portfolio includes presence in industries like healthcare, financial services, healthcare information management, glass packaging and real estate.

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Healthcare

In Q1 FY2016, Healthcare segment delivered revenues of Rs.850 Crores, as compared with Rs.724 Crores in Q1 FY2015; a growth of 17% YoY.

In healthcare, PEL is one of the leading players globally in CRAMS (custom research and manufacturing services) as well as in the critical care segment of inhalation and injectable anaesthetics. It also has a strong presence in the OTC segment in India. The Molecular Imaging Division was formed in 2012 with presence in Europe and USA.

Pharma Solutions Revenues from Pharma Solutions business grew by 27% YoY, to Rs.567 Crores in Q1 FY2016, primarily driven by growth in its Formulation business. We have seen significant traction at the company’s Coldstream site, post the company’s acquisition. The facility has its order book already running full and detailed assessment for capacity expansion is underway. We also commenced operations at the newly expanded capacity under the company’s Discovery Services business and completed the capacity expansion at Grangemouth.

Critical Care Revenues from Critical Care business were at Rs.191 Crores in Q1 FY2016, broadly in line with corresponding quarter of the previous year. We continue to work towards entering new markets and increasing the company’s share in existing markets. We have maintained the company’s cost leadership and initiatives are underway towards further optimization.

Consumer Products Revenues from Consumer Products business grew 9% during the quarter to Rs.93 Crores on account of growth across the company’s balanced portfolio. Saridon, i-pill & Lacto continue to maintain their leadership positioning. QuikKool became a respected brand in mouth ulcer category and Caladryl has doubled its distribution in just less than a year. We are continuously striving to improve the company’s presence in existing market and expand geographically.

Financial Services
Income from Financial Services was 69% higher at Rs.369 Crores for Q1 FY2016. The growth in income was primarily driven by increase in size of Loan Book and Assets under Management. Loan Book grew by 138% over last year to Rs.7,611 Crores. We made highest-ever disbursements during the quarter. We also saw significant growth in construction financing to real estate developers.

In financial services, PEL, through its Piramal Fund Management Division, provides comprehensive financing solutions to real estate companies. Its Structured Investments Division invests in various sectors including infrastructure. The total funds under management under these businesses are around $ 2 billion. The company also has strategic alliances with top global pension funds like CPPIB Credit Investment Inc. and APG Asset Management. PEL also has long term equity investments worth over $ 700 million in Shriram Group, a leading financial conglomerate in India.

Gross Assets under Management grew to Rs.8,676 Crores during the quarter. We exited more than 91% of corpus in real estate vintage funds and expecting to reach 100% in next few months.

During the quarter, we agreed towards a Special Situation mezzanine investment of Rs.900 Crores to GMR. In July 2015, Company entered to into another mezzanine investment worth Rs.275 Crores to ReGen Infrastructure.

Information Management

PEL’s healthcare information management business, Decision Resthe company’sces Group, is amongst the top 20 US market research organizations which provide information services to the healthcare industry.

Revenues from Information Management business grew by 10% YoY, to Rs.248 Crores in Q1 FY2016, driven by growth in the company’s data and analytics products. the company’s business has high revenue visibility with 95.3% retention rate for CY2015 till date. The business continues to expand geographically. Post establishing its presence in China, the business is moving ahead towards establishing its presence in India as well.

Piramal Enterprises Limited (PEL) is one of India’s large diversified companies, with a presence in healthcare, healthcare information management and financial services. PEL’s consolidated revenues were over $ 830 million in FY2015, with approx. 70% of revenues from outside India.

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