Piramal Enterprises hosted its Investor Day on August 28, where the top management reaffirmed its earlier-stated ambition to double FY23 loan AUM by FY28 (₹1.2-1.3 lakh crore) and deliver a consolidated RoA of about 3 per cent. Importantly, the strategy to achieve this medium-term target was also reiterated as being a 70:30 retail to wholesale AUM mix.
In retail, the approach is multiproduct offering to target the customers of Bharat without directly competing with large banks; while in wholesale, the focus is to build a granular book in Real Estate and Corporate Mid-Market Lending (CMML).
Overall, the company is on the right track to deliver profitable growth and, more importantly, to deploy or distribute the capital for (in)organic growth or for distribution to shareholders.
The Investor Day commentary has reassured us about the company progressing on the right track with clear tangible milestones set for itself. Clarity about the core activity, periphery activity, unlocking the value from financial investments and finally the optimal utilisation of capital came as a great comfort.
We reiterate our Buy rating with an unchanged target price of ₹1,230.