Buy Piramal Enterprises, target price Rs 1360: Emkay Global

Emkay Global has buy call on Piramal Enterprises with a target price of Rs 1360. The current market price of Piramal Enterprises is Rs 964.85. Time period given by analyst is one year when Piramal Enterprises Ltd. price can reach defined target.

Piramal Enterprises Ltd., incorporated in the year 1947, is a Large Cap company (having a market cap of Rs 22991.67 Crore) operating in Diversified sector.

Piramal Enterprises Ltd. key Products/Revenue Segments include Pharmaceuticals, Interest, Income From Financial Services, Sale of services, Dividend, Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 3726.46 Crore, down -15.33 % from last quarter Total Income of Rs 4401.03 Crore and up 23.74 % from last year same quarter Total Income of Rs 3011.60 Crore. Company reported net profit after tax of Rs 316.78 Crore in latest quarter.

Investment Rationale
The brokerage initiates coverage with a BUY rating and Sep-23 TP of Rs1,360, based on SOTP methodology, valuing: i) the financial services business using the Excess Return on Equity (ERE) method for a per-share value of Rs845, implying 1.03x of Sep24E BVPS; ii) Investments in Shriram Finance based on TP for Shriram Transport and Shriram City Union Finance, post holdco discount, at Rs179 per share; iii) Investments in the AIF and Insurance at allocated equity book value of Rs58 and Rs40 per share, respectively; and iv) the unallocated networth at Rs237 per share. Key risk: Integration issues from the merger due to mismatch of corporate culture and technology.

Promoter/FII Holdings
Promoters held 43.49 per cent stake in the company as of 30-Jun-2022, while FIIs owned 34.54 per cent, DIIs 8.13 per cent.