Jefferies has maintained its ‘Underperform’ rating on Piramal Enterprises with a target price of ₹820/share, as the brokerage expects a slow recovery in the company’s profitability metrics. While retail AUM growth is projected to remain healthy at 25-30% in FY25, Jefferies flagged near-term challenges such as NIM pressure and higher credit costs that could impact the company’s financials. The brokerage believes that Piramal’s RoA (Return on Assets) improvement will be gradual, driven by the unwinding of legacy assets, cost rationalization, and an increase in fee income.
However, it estimates that RoA will remain below 1.5% for FY25-27, contrary to market optimism. Jefferies remains cautious about the company’s ability to deliver sustained profitability in the short term, given its ongoing business restructuring and operational challenges. While the retail lending business remains a key driver, the brokerage emphasizes that investors should temper expectations for a near-term turnaround in financial performance.
