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On Wednesday, CLSA upgraded Piramal Enterprises Group (PIEL:IN) stock rating from Underperform to Hold, increasing the price target to INR1,030.00 from INR925.00. The revision followed the company’s fourth-quarter financial results, which were bolstered by a significant one-off income.
Piramal Enterprises disclosed a net profit of INR1 billion for the fourth quarter of the fiscal year 2025, aided by a one-off income of INR3.7 billion from alternative investment funds. This income helped to counterbalance the high credit costs, which stood at an annualized rate of 2.7%. Analysts at CLSA highlighted the company’s recovery in operating profit following four quarters of underperformance and noted the strategic reduction of its legacy book, adhering to previous guidance.
The management of Piramal Enterprises has expressed intentions to further decrease the proportion of its legacy book to 4% by the fiscal year 2026, with an anticipated asset under management (AUM) growth of 25% year-over-year in the same period. Despite observing some areas of concern within the retail segment, CLSA has adjusted its credit cost projections to between 1.3% and 2.1% for the fiscal years 2026 to 2028.
The firm’s efforts to streamline its operations and clear its books have been recognized by CLSA. Analysts expect Piramal Enterprises to achieve a return on equity (ROE) of 5% to 7% over fiscal years 2026 to 2028. The upgraded rating and revised price target reflect these positive developments and the firm’s adherence to its strategic objectives.
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