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Piramal Enterprises Limited Announces Consolidated Results forQ1 FY2022

Piramal Enterprises Limited Announces Consolidated Results forQ1 FY2022 1

Mumbai, India | August 10th , 2021: Piramal Enterprises Limited (‘PEL’, NSE: PEL, BSE: 500302) today announced its consolidated results for the First Quarter (Q1) FY2022 ended 30thJune 2021.

Consolidated Financial Highlights
  P&L Performance:Q1 FY22 revenuesofINR 2,909 Cr.,broadly stable year over yearQ1 FY22 Net Profit at INR 534 Cr., increased 8% year over year   Balance Sheet:Equity increased by 29% to INR 34,996 Cr. since March 201950% reduction in Net Debt by INR 27,677 Cr. since March 2019PEL Net Debt-to-Equity at 0.8x   DHFL Acquisition – Significant progress made in Q1 FY22:Resolution Plan received approval from NCLT and Monitoring Committee appointed in June 2021Implementation of the Resolution Plan is in progress- To be completed within 90 days of NCLT approval, as per regulatory requirement

Ajay Piramal, Chairman, Piramal Enterprises Ltd. said, “Despite the impact of the second wave of Covid-19, we have delivered resilient performance during the quarter with Revenues at INR 2,909 Crores, Net Profit YoY growth by 8% to INR 534 Crores. We continue to maintain a strong balance sheet, with net debt-to-equity ratio at 0.8x.

In Financial Services, our resolution plan for DHFL’s acquisition received NCLT-approval in June-2021. We are on track with the Monitoring Committee mandate for completion of this transaction within 90 days from NCLT approval. After successfully going through the recent consolidation phase, we are now transitioning from a wholesale-led to a well-diversified Financial Services business. The transition augmented by the DHFL acquisition will not only bring quantum growth in our loan book but also create a large India-wide platform that will enable us to deliver sustained growth and profitability in the years to come.

Our Pharma business continues to deliver robust performance during the quarter, with 31% YoY revenue growth, indicating the strength of our business model. In addition, post the capital raise from the Carlyle Group, we have accelerated on our two-pronged strategic growth trajectory though investments in both organic and inorganic initiatives.

While we remain cautiously optimistic for FY22, we see a strong runway for growth across both our businesses. Our immediate focus will be to effectively integrate DHFL with our Financial Services organization. Pursuant to which, we will be better positioned to announce our plan to create two separate listed entities in Financial Services and Pharma.”

Key Business Highlights
Financial Services(FS)Pharma
Growth and Diversification of Financial Services business through DHFL transaction: Retail AUM expected to grow ~5x through the DHFL acquisitionExpect to become one of the top-5 HFCs in IndiaShare of retail loans to increase to ~50% in the near term and to two-thirds in the medium-to-long term   Asset quality remained stable QoQ:GNPAs (in absolute terms) remained broadly unchanged QoQ, with no major fresh slippages during the quarter   Maintaining adequate provisions to manage any contingencies:Maintaining conservative provisions of INR 2,748 Crores, equivalent to 5.8% of total AUM as of Jun-2021   QoQ decline in borrowing cost: Average cost of borrowings declined from 10.9% in Q4 FY21 to 10.1% in Q1 FY22, which is expected to further decline to ~9.5% post the DHFL transaction   Maiden retail bond issue– a step towards further diversifying the borrowing mix:PCHFL raised INR 805 Crores through public issuance of NCDs in July 2021, which saw healthy participation from Retail and HNI investors   Capital adequacy at 39% and net debt-to-equity at 1.6x as of Jun-2021:Financial Services net debt-to-equity to increase to 2.5x post the DHFL transaction and to 3.5x in the near termRevenue grew by 31% YoY to INR 1,362 Cr. for Q1 FY2022:CDMO Revenues were up 17% YoYComplex Hospital Generics Revenues were up 43% YoYIndia Consumer Healthcare Revenues were up 73% YoY   Delivered EBITDA of INR 170 Cr. For Q1 FY22, up by 56% YoYBetter capacity utilization as the business is normalizingBackward integration of raw materials   Invested recently raisedcapital in both organic and inorganic growth initiatives: Completed acquisition of Hemmo Pharmaceuticals for INR 775 Cr.Riverviewfacility expansion of US$ 35 MncommencedAurora facility expansion of $22 Mnnear completion   Other Highlights:Large orders won in CDMO, including 2 orders worth>$10 Mn eachStrong demand for Sevoflurane and injectable pain products in key marketsUsing e-commerce to pilot launches and analytics to improve sales at India Consumer Healthcare business.4 new productslaunched in Q1

Business-wise Revenue Performance:

Business-wise Revenue Performance                                                                             (INR Crores or as stated)
Net Sales break-upQuarter I ended% Sales for
Q1 FY2022
30-Jun-2130-Jun-20% Change
Financial Services1,5471,899-19%53%
Pharma CDMO71961417%25%
Complex Hospital Generics46232443%16%
India Consumer Healthcare18110473%6%

Note: Pharma revenue includes foreign exchange gains/losses

Consolidated P&L:

Consolidated Financial Performance                                                                              (INR Crores or as stated)
ParticularsQuarter I ended
30-Jun-2130-Jun-20% Change
Net Sales2,9092,937-1%
Non-operating other income1036557%
Total income3,0123,0030%
Other Operating Expenses1,4081,09129%
Impairment on financial assets-4951
Interest Expenses9851,105-11%
Profit before tax & exceptional items519622-17%
Exceptional items (Expenses)/Income-15
Income tax – Current tax135161-16%
DTA reversal / other one-time tax adjustments
Profit / (Loss) after tax (before Prior Period items)368461-20%
Share of Associates116535373%
Net Profit / (Loss) after Tax from continuing operations5344968%
Profit / (Loss) from Discontinued operations
Net Profit after Tax(after exceptional items)5344968%
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