Today after stupendous results, I added Piramal Enterprises decisively. (Entry price 1605 ) It was already there in my portfolio but holding was not significant. With today's excellent numbers, added Piramal enterprises
with such conviction that it has now entered into top 5 holdings by allocation !!!!
Link: Company Website
Why I entered?
Piramal was on tracklist as small portion of portfolio:
Piramal Enterprises basically consist of 3 business verticals: Pharma, Technology, Financials
Earlier the company was dominated by Pharma vertical , What has happened recently, in last 2 quarters, its financial vertical is growing at scortching pace !!!
Link: Piramal Q1FY 17 result presentation
Read slide 13/17 of presenation ! Most important slide :
Total Loan Book size Rs.16,112 Crores
Average Yield on Loans 16%
Cost of Capital 9%
Cost to Income Ratio 7%
Gross NPA ratio 0.6%
On next slide, PEL is promising to increase loan book from 16 k to 43k in next 2-3 years...
In my opinion, in next 3 years, out of PEL overall revenues, 70℅ plus revenue will get generated from financial vertical and pharma and analytics will constitute rest 30% revenue contribution.
Ajay Piramal is a astute wealth creator and is eyeing for value unlocking. He is trying to demerge pharma, financial srvs biz, which will take 2 years..
Parallely, Ajay Piramal has grand plans : He want to merge Shriram group finance business with Piramal Capital (Demerged entity as mentioned above) !!!
LInk: Merger with Shriram Group
If one want to see the detailed article about how Ajay Piramal want to steer the businesses and create long term wealth for shareholders, Dont miss reading this superb article : cover-story/flush-with-rs-23500-crore-ajay-piramal-is-making-bold-bets/story/235343.html
FIIs are gung ho on stock !!!Yet this giant in still un-noticed by domestic investor fraternity.... !!!
I am really amazed by the fact that, not a single DII is tracking this scrip.Not a single brokerage firm has coverage/ buy targets on this company..
Please listen below video carefully where Ajay Piramal is explaining all the three core business verticals himself !!!
Recommendation: This stock is just buy and forget kind of stock... Not to be sold in next 5 years in any condition.... Returns, what can i tell, let market re-rate it to whatever levels it want to :-) Gem Stock, Hold in core portfolio with Conviction !!!(My Hunch : Piramal enterprises can go bajaj finance way (Note: not comparing businesses just stock price).two and half years ago bajaj finance used to trade at 1600 rupees per share,Today it is trading at 11226 ! )