Piramal Enterprises Sets Record Date For Rs. 1,750 Cr Share Buyback

Piramal Enterprises a large-cap NBFC has announced share buyback of 1.40 Cr shares at an amount of Rs. 1,750 Cr. For the purpose of the same record date has been finalized. At its meeting on July 28, 2023, the company approved the buyback of up to 1.40 Cr equity shares with a face value of Rs. 2 for a total amount of Rs. 1,750 crores, or 5.87% of the total paid-up equity share capital, at a buyback price of Rs. 1,250 per equity share.

Piramal Enterprises Buyback Record Date

"Pursuant to Regulation 42 of the SEBI Listing Regulations and Regulation 9(i) of the Buyback Regulations, the Board has fixed Friday, August 25, 2023, as the record date for the purpose of determining the entitlement and names of the shareholders eligible to participate in the Buyback. The tendering period of the Buyback will be open for a period of 5 working days in accordance with the Buyback Regulations," said Piramal Enterprises in a stock exchange filing.

Piramal Enterprises Financials

Piramal Enterprises Ltd. reported a net profit of Rs 509 crore, down approximately 94 per cent year on year (YoY), from Rs 8,155 crore in the corresponding period of the previous fiscal. On a sequential basis, however, the net profit jumped by 160 per cent from the quarter ending March 31, 2023, when it had a net loss of Rs 196 crore. While this was going on, the company's revenue from operations climbed 34% to Rs 2,899 crore in Q1FY24 from Rs 2,161 crore in the same period last year.

Retail AUM climbed 57 per cent YoY to Rs 34,891 crore during the quarter, while retail disbursements climbed 132 per cent YoY to Rs 5,707 crore in the quarter under review. Total assets under management (AUM) for the quarter were Rs 63,938 crore. Piramal Enterprises has a healthy consolidated net worth of Rs 30,844 crore, a capital adequacy ratio of 34.3 per cent, and cash and liquid investments of Rs 9,613 crore. The gross non-performing assets ratio, or GNPA ratio, dropped from 3.8 per cent in Q4 of FY23 to 2.8 per cent in Q1FY24. The proportion of net non-performing assets, or NNPA, has dropped from 1.9 per cent in the March quarter to 1.5 per cent in the quarter under review. While operating income climbed to Rs 189 crore from Rs 58 crore, interest income fell 10% to Rs 1,725 crore.

Piramal Enterprises Share Price

On Friday, the shares of Piramal Enterprises closed on the BSE at Rs 1072.80 apiece down by 2.15% from the previous close of Rs 1096.35. The stock made a 52-week-high of Rs 1,202.73 on (26/08/2022) and a 52-week-low of Rs 630.20 on (28/03/2023). During Q1FY24, the company recorded promoter shareholding of 43.48%, FIIs stake of 26.04%, DIIs stake of 11.92%, public stake of 18.06% and others stake of 0.49%.

Piramal Enterprises Share Price Target

Deven Mehata, Equity Research Analyst - Choice Broking, said "PEL's stock is on a robust uptrend, evident by its continuous formation of higher highs and higher lows on the weekly charts. Currently, the stock is trading at 1072.95 levels, showcasing its ability to sustain its positive momentum. The fact that PEL is trading above its crucial moving averages of 20, 50, and 100 indicates a strong bullish sentiment prevailing in the market. The presence of a minor resistance level at 1118 adds an interesting dimension to the stock's trajectory. Once this resistance is overcome, it has the potential to act as a catalyst, propelling the stock towards further upward movement."

"The Relative Strength Index (RSI) stands at 72 and is trending upwards, which points towards a growing buying interest in PEL's stock. This surge in buying activity further strengthens the notion that investors have a positive outlook on the company's prospects, contributing to the current bullish sentiment. In summary, PEL's stock is exhibiting remarkable strength with a consistent uptrend, higher high higher low formations on weekly charts, and solid support above key moving averages. The minor resistance at 1118 and the rising RSI underscore the optimism and growing buying interest surrounding the stock, providing potential opportunities for further upward movement in the near future. However, caution is advised, with a close eye on the stock falling below 1040, as it could negate the positive outlook. A short-term target of 1130 is plausible," said Deven Mehata.

Nirav Karkera, Head of Research, Fisdom said, "In FY23, Piramal Enterprises achieved an impressive turnaround by overcoming challenges in its wholesale lending division. The company actively diversified its retail lending portfolio, improving asset quality, and reducing concentration risk. Their strategic acquisition of Dewan in FY22 was crucial in enabling this transformation. Furthermore, Piramal Enterprises' well-timed decision to conduct a buyback following the sale of a stake in Shriram Finance and its strategic partnerships with fintech players for unsecured lending has been received positively by the market. These moves align with the optimistic and bullish sentiment prevailing in the market, positioning the company for continued growth and success."

"The company's financial results mirror the wisdom of their decisions, with net sales growing by an impressive 38% in June 2023 and the EPS showing a significant increase from 20.7 in June 2022 to 21.3 in June 2023. Additionally, the company's valuation is comfortable compared to its industry peers. Considering Piramal Enterprises' strategic initiatives to enhance its business and valuation, we expect the company to continue making meaningful progress. Their prudent moves have placed them on a promising trajectory, making them an attractive prospect in the market. On the daily chart, PEL (a stock) had a strong recovery that looks like the letter "V" after reaching a low point at 630 levels on 28th March 2023. After an excellent upward movement in prices, there was a correction, and they retraced to about 78.60% of the previous move in the weekly time frame," said Nirav Karkera.

"Currently, the stock is showing a pattern where prices are falling in a channel but in a bullish way. It means that the prices are moving downwards, but in a way that suggests they might go up again later. The stock is also trading above its short-term and medium-term averages, which is a positive sign for the stock. If someone is considering investing in this stock, it would be wise to wait for the prices to go down to around 1,040 and 1,000 levels before buying. It's also essential to set a stop level at 920, which means if the prices fall below that point, they should consider selling to limit potential losses. On the other hand, if the prices go above 1,150 levels, it could lead to another upward movement, possibly reaching levels between 1,300 to 1,350," Nirav Karkera further stated.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.