Yahoo Finance

• Total AUM Growth: Up 12% year on year to INR 74,692 crores.

• Retail AUM Growth: Grew 8% quarter on quarter and 42% year on year, now forming 73% of total AUM.

• Wholesale 2.0 AUM: Rose by 12% quarter on quarter and 75% year on year to INR 7,889 crores.

• Legacy Discontinued AUM: Stands at INR 12,000 crores, 16% of total AUM.

• Consolidated Net Profit: INR 163 crores.

• Growth Business Net Profit: INR 130 crores.

• Net Interest Margin (NIM): Improved to 5.1% from 4.9% in Q1 FY '25.

• Operating Profit to AUM for Growth Business: Stable at 2.8%.

• Opex to AUM: Down 10 basis points quarter on quarter and 80 basis points year on year to 4.5%.

• Gross Credit Cost: 1.8% versus 1.6% in Q1 FY '25.

• Net Credit Cost: 1.6% versus 1.3% in Q1 FY '25.

• Retail Lending Disbursements: Over INR 8,000 crores, reflecting a 29% year on year increase.

• Mortgage Business AUM: Grew 37% year on year to INR 37,005 crores.

• Used Car Loans Growth: Up 145% year on year.

• Salary Personal Loans Growth: Up 148% year on year.

• Business Loans Growth: Up 55% year on year.

• Wholesale Lending Disbursements: INR 1,837 crores, a 17% quarter on quarter increase.

• Legacy Wholesale AUM Reduction: Down 49% year on year to INR 12,066 crores.

• Net Worth: INR 26,009 crores.

• Capital Adequacy Ratio: 23.3%.

• Cost of Borrowing: 9.1%.

• Warning! GuruFocus has detected 8 Warning Signs with BOM:500302.

Release Date: October 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Piramal Enterprises Ltd (BOM:500302) reported a consolidated net profit of INR163 crores for Q2 FY25, with the growth business contributing INR130 crores.

• The company's total AUM grew by 12% year-on-year to INR74,692 crores, driven by a 45% year-on-year increase in the growth wholesale AUM.

• Retail AUM grew by 42% year-on-year, now forming 73% of the total AUM, indicating strong performance in the retail lending segment.

• The company successfully diversified its borrowing base, with securitization now at 14% of total borrowings, up from 4% in the same quarter of FY24.

• Piramal Enterprises Ltd (BOM:500302) has made significant progress in reducing its legacy discontinued wholesale AUM, which is down 72% since March 2022.

Negative Points

• The company's gross credit cost increased to 1.8% in Q2 FY25 from 1.6% in Q1, indicating rising credit risks.

• The digital loan business faced constraints, with disbursements reducing significantly from previous quarters.

• There is a noted increase in risk within the unsecured business loans segment, with rising delinquency trends.

• The legacy discontinued AUM still stands at INR12,000 crores, representing 16% of the total AUM, which the company aims to reduce further.

• The retail credit cost is expected to increase in the coming quarters due to the challenging risk environment.