We Don't Want To Be Starved Of Capital As We Grow

Piramal Enterprises Chairman Ajay Piramal speaks about the recent ₹5,000-crore fundraising plan and how his company managed to post strong earnings growth despite challenges.

- Aveek Datta & Salil Panchal

Despite exposure to sectors such as pharmaceuticals and real estate, both of which are facing serious challenges, the Ajay Piramal-led flagship and listed company Piramal Enterprises (PEL) has performed well in FY17. The company reported a 61 percent year-on-year rise in its consolidated net profit for the three months ended March 31, 2017, to ₹311 crore, and a 46 percent jump in operating turnover to ₹2,463 crore.

What’s also interesting is that financial services now contributes 39 percent to PEL’s revenues, second to pharma (47 percent)—in FY13, financial services contributed just 11 percent and pharma 71 percent. It’s a trend that is likely to continue. Piramal, 61, says though both businesses will continue to grow, financial services will probably overtake health care as the larger contributor soon. Piramal, who has been reinvesting the proceeds from the divestment of PEL’s branded generic drugs portfolio to Abbott for $3.7 billion in 2010, also ruled out a merger of his company’s financial services business with that of the Shriram Group (PEL holds a stake in three of its companies) in the near term. It is better for the two entities to grow their respective ventures, he tells Forbes India in an interview. Excerpts:

Q Despite the real estate and pharma sectors facing serious challenges, PEL has performed well in FY17. How did it manage to achieve this?