Brokerages cut target on Piramal Enterprises post Q2; stock down 5%

Piramal Enterprises shares slipped nearly 5 per cent in the morning deals on November 10. The selling pressure was witnessed after CLSA, Jefferies, and Citi cut their target price on the stock.

At around 11:09 a.m., shares of Piramal Enterprises traded 3.95 per cent or Rs 38.95, lower on the BSE at Rs 947.4 apiece. The market capitalisation of the company stood at Rs 22,611 crore.

Brokerages' view

CLSA maintained a 'reduce' rating on the stock and cut the target to Rs 1,050 apiece from Rs 1,150.

Jefferies also continued with an 'underperform' rating and cut the target to Rs 855 apiece from Rs 920. According to the brokerage, the second quarter's profit before tax (PBT) was well below their estimates amid a tad lower net interest income (NII), higher opex, and provision, which offset higher other income.

Likewise, Citi maintained a 'sell' and cut the target to Rs 970 apiece from Rs 1,010.

Here's how Piramal Enterprises performed in Q2:

Piramal Enterprises posted its Q2 results post-market hours, where it reported a consolidated net profit of Rs 48 crore as against a loss of Rs 1,536 crore in the year-ago period.

The interest income of the company came down to Rs 1,778 crore as against Rs 1,842 crore seen in the same period a year ago. The total assets under management (AUM) rose 5 per cent to Rs 66,933 crore.

Consolidated gross non-performing assets (GNPA) also came down 10 basis points (bps) to 2.7 per cent while net non-performing assets (NPA) remained flat at 1.5 per cent at the end of the quarter.

"Our retail lending business is consistently growing, driven by increased disbursements to fulfill the credit needs of the "Bharat" market. We will continue investing in talent, branches, cognitive intelligence, and data analytics to keep this momentum going," Piramal Enterprises Chairman Ajay Piramal said.

Piramal Enterprises share price: Past performance

In 2023 so far, shares of Piramal Enterprises have gained over 13 per cent as against the Nifty50's rise of over 6 per cent. 

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