Piramal Enterprises Ltd (PEL) had forayed into the Indian healthcare space in 1988, with a move that was contrarian at that time by purchasing a multinational company, Nicholas Laboratories, whereas most pharmaceutical players were exiting the country due to the negative business climate. After two decades, the company established itself as one of the most recognisable and respected names in the industry by becoming the third largest pharmaceutical company in the country. It later sold the domestic formulation business to Abbott in 2010 for US$3.8 billion at record valuations. At present the company has three vertical segments such as pharma, info management and financial services. The sale proceeds have been invested judiciously over the last few years, with Rs 4,583 crore invested in the Shriram Group, Rs 4,400 crore in the healthcare segment, Rs 4,400 crore in information management and a substantial amount in Vodafone India. It has manufacturing facilities across India, UK, Scotland, US and Canada, whereas critical care products are available in the emergency rooms of hospitals across the globe, in over 100 countries. It is presently the third largest player in the global inhalation market and the only company in the world with a complete product portfolio of inhalation anaesthetics drug. Its manufacturing capabilities make it one of the largest custom manufacturing companies in the world. Through the years, Piramal Healthcare has partnered with the largest and most reputed organisations in the global pharmaceuticals industry to expand its product offering and deliver the best innovations to their customers.
Piramal Healthcare is presently the third largest player in the global inhalation market and the only company in the world with a complete product portfolio of inhalation anaesthetics drug. Its manufacturing capabilities make it one of the largest custom manufacturing companies in the world.
PEL reported a 30.18% rise in its net profit of Rs 306.06 crore for the quarter ended September 2016 on the back of robust growth in financial services business, whereas the total income rose to Rs 1,966.15 crore for the same quarter under consideration. An increase in the size of the loan book along with strong execution capabilities has helped PEL to grow organically and otherwise. As many as six companies including PEL will be added to the MSCI India domestic index, with effect from 30 November 2016. As is known that MSCI is a leading provider of benchmark indices globally and this will help PEL stock to be in the books of many large foreign investors. Many domestic and foreign brokerage houses have a positive rating on the PEL stock with the financial services segment emerging as a key value driver. The company foresees good progress and increase in the OTC Pharma business , as also the info management business could be the first source of value unlocking via a US stock exchange listing . PEL has returned capital to shareholders consistently over the last five years . It has delivered a return of 43% per annum as against the average 10% by the Nifty . The PIramal stock currently quoting on the bourses at Rs 1430 is a good buy for one year portfolio investment with a price target of Rs 1920 during that time horizon. The BSE Sensex ended the week at a six month low to close at 26150 levels with traders continuing to avoid taking fresh positions on the back of an impending interest rate hike in the US next month . Analysts are hoping that the stock market will consolidate for the next couple of weeks before initiating a bounce back .
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.