Piramal drops nearly 10% on weak Q4 earnings – business news

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Shares of Piramal Enterprises tumbled 9.68% to Rs 842 on the BSE on Tuesday after the company reported a net loss of Rs 1,703 crore in the March quarter of the financial year 2019-20 over the coronavirus pandemic.

The stock opened at Rs 866 and touched an intraday high and low of Rs 889.95 and Rs 842 respectively in the session so far. It quoted a 52-week high of Rs 2,256.49 and a 52-week low of Rs 606.85.

At 10:43am, the stock was down 8.13% at Rs 856.45 in the S&P BSE Sensex. The stock hit its 52-week low of Rs 608 on March 24, 2020.

Piramal Enterprises on Monday reported a consolidated net loss of Rs 1,702.59 crore for the fourth quarter ended March 2020 due to the impact of the coronavirus pandemic. The company had posted a net profit of Rs 454.63 crore in January-March quarter a year ago, Piramal Enterprises said in a BSE filing.

Its total revenue from operations dropped 1.98% to Rs 3,341 crore during the quarter under review as compared with Rs 3,408.52 crore in the corresponding quarter of the previous year.

“The Group has estimated and recognised an additional expected credit loss of Rs 1,903 crore on certain financial assets, on account of the anticipated effect of the global health pandemic,” the company said.

“As a result of the uncertainties resulting from COVID-19, the impact of this pandemic may be different from those estimated as on the date of approval of these financial results and the Group will continue to monitor any changes to the future economic conditions,” it added.

Its total expenses during the quarter stood at Rs 4,876.77 crore.

“The last few quarters have been challenging for the Indian economy. The situation has further worsened due to the COVID-19 pandemic, with a subsequent economic recovery likely to be long-drawn,” Piramal Enterprises’ chairperson Ajay Piramal said on the results.

“To navigate through such an environment, we have significantly strengthened and deleveraged our balance sheet through multiple initiatives to raise capital.”

During the quarter, Piramal Enterprises’ revenue from pharmaceuticals stood at Rs 1,622.58 crore as against Rs 1,475.76 in the corresponding quarter a year ago.

Revenue from financial services segment stood at Rs 1,718.42 crore during the quarter as against Rs 1,932.76 crore in the year-ago period.

The company had on January 17, 2020, approved divestment of its entire stake in healthcare insights and analytics business, through its wholly-owned subsidiaries, to Clarivate Analytics Plc and its subsidiaries for an aggregate consideration of approximately $950 million.

“USD 900 million was received, on the closing date and the balance USD 50 million would be received at the end of twelve months from the closing of the transaction.

“Consequently, profit before tax and tax expenses relating to the Healthcare Insights and Analytics business have been disclosed separately as discontinued operations as part of the above results,” the company said.

For the fiscal year 2019-20, Piramal Enterprises net profit stood at Rs 21.14 crore. It was at Rs 1,464.09 crore in the previous year. Its total revenue from operations in the fiscal stood at Rs 13,068.29 crore. It was at Rs 11,882.59 crore in 2018-19.

According to the company, it transferred certain financial assets to wholly-owned subsidiaries, hence “the results for year ended March 31, 2020, are not comparable with the results of the earlier periods presented.”

“Our pharma business continues to be operational despite COVID -19 lockdowns and has delivered a healthy revenue growth of 13 per cent YoY to INR 5,419 crore and an EBITDA margin of 26 per cent for FY20,” Piramal said.

The revenue from financial services business was at Rs 7,649.42 crore in FY20.

In a separate filing, the company informed BSE that its board has recommended a dividend of Rs 14 per equity share.

“Keeping in mind the global environment of heightened uncertainty caused by the COVID-19 pandemic on one hand and on the other, the recent sale of our DRG business as well as the interest of the minority shareholders, the board has recommended a dividend of INR 14 per share for the approval of the shareholders in the AGM,” the company said.

(With agency inputs)



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