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PIRAMAL ENTERPRISES 2022-23 Annual Report Analysis

Sun, 11 Jun

PIRAMAL ENTERPRISES has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during the year 2022-23.

PIRAMAL ENTERPRISES Income Statement Analysis

• Interest income during the year rose 15.6% on a year-on-year (YoY) basis.
• Interest expenses were down by 5.6% YoY during the same period.
• Operating expenses increased by 316.7% YoY during the year.
• The company's net interest income (NII) increased by 42.1% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 16.5% in FY23 as against 10.2% in FY22.
• Other income increased by 326.0% YoY during the year.
• Net profit for the year increased by 528.3% YoY.
• Net profit margins during the year increased to 111.6% in FY23 from 20.5% in FY22.

PIRAMAL ENTERPRISES Income Statement – 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Interest Income	Rs m	77,255	89,343	15.6%
Other Income	Rs m	2,724	11,602	326.0%
Interest Expense	Rs m	42,817	40,412	-5.6%
Net Interest Income	Rs m	34,438	48,931	42.1%
Operating Expense	Rs m	20,144	83,948	316.7%
Pre-provision Operating Profit	Rs m	17,018	-23,415	-237.6%
Provisions & Contingencies	Rs m	4,713	2,749	-41.7%
Profit before tax	Rs m	20,684	59,905	189.6%
Tax	Rs m	4,062	-39,781	-1079.4%
Profit after tax	Rs m	15,866	99,686	528.3%
Minority Interest	Rs m	-757	0	100.0%
Net Interest Margin	%	10.2	16.5
Net profit margin	%	20.5	111.6

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PIRAMAL ENTERPRISES Balance Sheet Analysis

• The company's deposits during FY23 stood at Rs 0 m as compared to Rs 0 m in FY22, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 0 m as compared to Rs 0 m during FY22, a rise of 0.0%.
• Cost of deposits for PIRAMAL ENTERPRISES fell 75.2% and stood at 180230.0%, while yield on advances rose to 0.0%.
• The lender's investments fell to Rs 296.4 bn during the year from Rs 336.8 bn in FY22.
• Borrowing stood at Rs 34.1 bn, a growth of 9.3% as compared to previous year.
• Overall, the total assets and liabilities for FY23 stood at Rs 895.4 bn as against Rs 1,068.0 bn during FY22, thereby witnessing a fall of 16.2%.

PIRAMAL ENTERPRISES Balance Sheet – as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	354,891	310,590	-12.5%
Advances	Rs m	0	0	0.0%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	728060.0	180230.0
Investments	Rs m	336,815	296,427	-12.0%
Borrowings	Rs m	31,217	34,126	9.3%
Total Assets	Rs m	1,067,987	895,367	-16.2%

Current Valuations for PIRAMAL ENTERPRISES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 417.7, a decline from the EPS of Rs 66.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 784.4, stands at 3.6 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 0.6 times, while the price to income ratio stands at 4.0 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Income per share (Unadj.)	Rs	323.7	374.4
Earnings per share (Unadj.)	Rs	66.5	417.7
Diluted earnings per share	Rs	66.5	417.7
Avg P/E ratio	Rs	34.8	3.6
Avg P/ABV ratio	Rs	1.1	0.6
Avg Market Cap	Rs	551,910	359,797
Dividends per share (Unadj.)	Rs	33.00	31.00

Ratio Analysis for PIRAMAL ENTERPRISES

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 0.0x during FY23, from 0.0x during FY22. The credit/deposit ratio tells us how much money a company has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The company's debt to equity ratio increased and stood at 0.11x during FY23, from 0.11x during FY22. The debt to equity ratio of a company tells us how much debt a company uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): PIRAMAL ENTERPRISES's capital adequacy ratio (CAR) was at 43.6% as on 31 March 2023 as compared to 0.0% a year ago. This ratio helps measure the financial strength of the company or any finance company to meet their obligations using their assets and capital.

  A company that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the company's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a company sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the company is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that companies hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the company improved and stood at 32.1% during FY23, from 4.5% during FY22. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the company improved and stood at 11.13% during FY23, from 1.49% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 11.69% during FY23, from 7.73% during FY22. The ROCE measures the ability of a company to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a company's gross NPAs to gross advances. PIRAMAL ENTERPRISES's gross NPA ratio stood at 5.1% as of 31 March 2023 compared to 0.0% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a company's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the company has made provisions.

  The net NPA ratio of PIRAMAL ENTERPRISES was 2.3% in financial year 2023. This compared with 0.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Credit/Deposit Ratio	x	0.0	0.0
Debt to Equity Ratio	x	0.1	0.1
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	0.0	43.6
Return on Equity	%	4.5	32.1
Return on Assets	%	1.5	11.1
Return on Capital Employed	%	7.7	11.7
% of Gross NPAs	%	0.0	5.1
% of Net NPAs	%	0.0	2.3
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

To see how PIRAMAL ENTERPRISES has performed over the last 5 years, please visit here.

PIRAMAL ENTERPRISES Share Price Performance

Over the last one year, PIRAMAL ENTERPRISES share price has moved down from Rs 1,701.3 to Rs 784.4, registering a loss of Rs 916.9 or around 53.9%.

Meanwhile, the S&P BSE HEALTHCARE is trading at 24,181.0 (down 0.1%). Over the last one year it has moved up from 22,030.6 to 24,181.0, registering a gain of 2,150.4 points (up 9.8%).

Overall, the S&P BSE SENSEX is up 14.1% over the year.

(To know more, you can check out historical annual results for PIRAMAL ENTERPRISES here and quarterly results for PIRAMAL ENTERPRISES here)