Target: Rs 1,230
CMP: Rs 1,052.90
Piramal Enterprises held its investor day on August 28, where top management reaffirmed its previously stated target of doubling FY23 loan size by FY28 (Rs 120-130 crore) and achieving Approximately 3% consolidated RoA. Importantly, the strategy to achieve this mid-term target was also reiterated as a 70:30 mix of retail to wholesale AUM.
In the retail sector, the approach is to offer a wide range of products to target Bharat’s customers without directly competing with the big banks; in the wholesale sector, the focus is on creating a detailed book on real estate and corporate middle market lending (CMML).
Overall, the company is on the right track for profitable growth and, more importantly, deploying or allocating capital for (internal) organic growth or distribution to shareholders.
Investor day comments reassure us that the company is on the right track and has set clear, tangible milestones for itself. The clarity of core activities, peripheral activities, unlocking financial investment value and ultimately the best use of capital brings us great comfort.
We reiterate our BUY call with an unchanged target price of Rs 1,230.
