PEL back in the black on large tax write-back

MUMBAI: Piramal Enterprises (PEL), the non-banking finance company of the real estate and pharma group swung to a profit in the March quarter helped by a large tax write-back even as higher funding costs and continued paring of its wholesale loan book pressured earnings. The consolidated net profit was 137 crore from a

loss of 196 crore a year earlier helped by a 1,203 crore tax write-back including the carrying forward of a loss of 10,627 crore, arising from the acquisition of the insolvent DHFL two years ago. The write-back also included tax gains from investments in alternative investment funds and other reversals, CEO Jairam Sridharan said.

On an annual basis, PEL swung to a loss of 1,684 crore from a profit of 9,969 crore, due to the impact of AIF provisions during the fiscal.

Total assets under management (AUM) were up 8% year-on-year led by a 49% growth in retail AUM to 47,927 crore. Quarterly disbursements grew 30% to 8,910 crore. Piramal continued to reduce its legacy wholesale AUM, which halved to 14,572 crore YoY. This shrinkage impacted net interest income which fell 18% YoY to 755 crore.Piramal’s cost of funds increased to 6.50% from 6.20% a year ago.