Piramal Enterprises eyes de-merger of financial services business
17 May 2016
Piramal Enterprises is looking to de-merge its financial services businesses in a ''couple of years'', as it unbundles its complex structure to emerge leaner and stronger with focused businesses, chairman Ajay Piramal said.
''We will simplify it in the medium term, but there is no definite timeframe as of now,'' Piramal said, without getting into specifics.
For the company, which sold its domestic formulations business to Abbott for Rs17,000 crore in 2010, it is a constant evolution - ''reinventing'' itself even as it delivers healthy returns to shareholders, says Piramal.
The company has reinvested the cash and got shareholders a 34-per cent return, Piramal told reporters at an interaction to discuss the company's annual performance.
Piramal Enterprises is a conglomerate today and may seem to be complex and difficult to understand, he said.
''We are fully aware and alive to this fact. It is our intent to simplify the structure going forward and create focused businesses and, in the process, also unlocking value for our shareholders.''
Piramal has interests in healthcare, financial services and information management and of these financial services business grew the most this year, at 99 per cent, Piramal pointed out.
Its healthcare business grew 14 per cent and information management at 13 per cent.
Piramal is also looking at new sectors for investment and the group is setting up a fund to invest in stressed assets.
''It's in the process. It will take a couple of months. We are in talks with global partners and also in the process of hiring an independent team to identify and invest in stressed assets,'' Piramal added. He did not elaborate on the corpus of the fund or the sectors it will invest in.
Piramal Enterprises saw its net profit almost double to Rs180 crore for the three months ended 31 March 2016, against a net profit of Rs95 crore during the comparable year-ago quarter.
The company's total revenues stood at Rs1,734 crore. However, Piramal said the company's performance in the quarter and the financial year as a whole was not comparable to its performance last year because of various acquisitions and divestments.
For the financial year ended 31 March, the company's net profit stood at Rs951 crore, while revenues stood at Rs6,610 crore.
The healthcare segment contributed 53.8 per cent of the total sales, followed by financial services at 28.2 per cent and information management at 17.5 per cent, he added.