PEL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

🏦 Fundamental Stock Analysis: Piramal Enterprises Ltd (PEL) Rating: 3.2

🔍 Core Financials & Profitability

ROE: 1.63% and ROCE: 6.78% — significantly below ideal thresholds, pointing to weak capital deployment and shareholder returns.

EPS: ₹25.7 — moderate but doesn’t justify lofty valuations.

Debt-to-Equity: 2.42 — highly leveraged; potential risk during rising interest rate cycles or macro stress.

Qtr Profit Surge (₹276 Cr vs ₹102 Cr) — strong quarterly bounce, but the sustainability of this growth is uncertain.

Dividend Yield of 0.85% — slightly better than peers, but likely not a key attraction.

💰 Valuation Metrics & Technical Pulse

Metric Value Interpretation

P/E Ratio 56.5 Expensive relative to industry PE of 25.2

P/B Ratio ~1.08 Fair value based on book assets

PEG Ratio -1.50 Negative PEG likely due to uncertain or volatile earnings growth

RSI 63.0 Mildly overbought; suggests caution on fresh entry

MACD 41.1 Bullish momentum; recent upward traction

Price vs DMA ₹1,295 vs DMA50/200: ₹1,189 / ₹1,077 Trading well above averages — momentum is strong

Volume Insight: Below weekly average, suggesting fading buying interest or investor hesitancy.

FII/DII Activity: FII reduced stake (–0.89%) while DII increased (+0.86%) — mixed institutional sentiment.

🧠 Business Profile & Strategic Positioning

Focus: Diversified financial services, including lending, insurance, and investments — post demerger from its pharma business.

Moat Evaluation

Transitioned into NBFC space with emphasis on retail lending.

However, lacks the scale, asset quality, or operational depth of larger NBFCs like Bajaj Finance.

Leverage and low ROE present challenges in outcompeting peers.

📌 Investment Strategy

Entry Zone Recommendation: ₹1,150–₹1,200 — closer to DMA50 and under RSI 55, with improved risk-reward setup.

Long-Term Outlook

Riskier bet within NBFC space due to poor return metrics and high debt.

Position sizing should be conservative.

Monitor for strategic clarity in lending segments, asset quality metrics, and debt management.

Would you like a head-to-head fundamental breakdown with another NBFC like L&T Finance, Shriram Finance, or Muthoot? That might help clarify where PEL stands competitively and growth-wise. I’m game if you are.

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