Piramal Enterprises' Profit Surge amid Credit Challenges

Piramal Enterprises reported a significant increase in net profit to Rs 163 crore for the September quarter, spotlighting a precarious credit environment. Despite improved net interest income and reduced asset quality, concerns about retail loans and speculative investments persist. Managing Director Jairam Sridharan flags potential setbacks and emphasizes caution.

Non-bank lender Piramal Enterprises has tripled its net profit to Rs 163 crore for the September quarter, contrasting sharply with the Rs 48 crore reported during the same period last year. However, the company highlights concerns over the fragile credit environment, which poses potential future risks.

While the company saw a 17% rise in core net interest income to Rs 881 crore, driven by recoveries from alternate investments, its gross non-performing assets ratio has edged up to 3.1%. The shift towards growth assets contributed to a rise in net interest margin to 5.1% from 4.7%.

Managing Director Jairam Sridharan warns that although the company has managed to lessen digital loan stress, challenges remain, particularly from over-levered borrowers and speculative market borrowings. With loan loss provisions increasing by 60% to Rs 317 crore, caution is advised as retail loan quality faces potential setbacks.

(With inputs from agencies.)