Piramal Enterprises Limited Investor Presentation - August 2018
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Piramal Enterprises Limited Investor Presentation August 2018
Piramal Enterprises Limited – Investor Presentation Page 2 Disclaimer Except for the historical information contained herein, statements in this presentation and any subsequent discussions, which include words or phrases such as 'will', 'aim', 'will likely result', 'would', 'believe', 'may', 'expect', 'will continue', 'anticipate', 'estimate', 'intend', 'plan', 'contemplate', 'seek to', 'future', 'objective', 'goal', 'likely', 'project', 'on-course', 'should', 'potential', 'pipeline', 'guidance', 'will pursue' 'trend line' and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to Piramal Enterprise Limited’s ability to successfully implement its strategy, the Company’s growth and expansion plans, obtain regulatory approvals, provisioning policies, technological changes, investment and business income, cash flow projections, exposure to market risks as well as other risks. Piramal Enterprises Limited does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date thereof. These materials are not a prospectus, a statement in lieu of a prospectus, an offering circular, an invitation or an advertisement or an offer document under the Indian Companies Act, 2013 together with the rules and regulations made thereunder, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended, or any other applicable law in India. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States or in any other jurisdiction. Note: Figures in previous periods might have been regrouped or restated, wherever necessary to make them comparable to current period.
Piramal Enterprises Limited – Investor Presentation Page 3
Piramal Enterprises Limited: Business Overview
FY18 Revenues:
Piramal Enterprises Rs. 10,639 Cr ($1.6 Bn)
Financial Services Pharma Healthcare Insight and Analytics
FY18 Revenue Contribution: 47% FY18 Revenue Contribution: 42% FY18 Revenue Contribution:11%
Wholesale Lending Global Pharma Decision Resources Group (DRG)
• Loan Book of Rs. 46,995 crs ($7 bn) • Strong portfolio of differentiated branded • Serving a large number of healthcare
• ROE of 19%2; GNPA ratio of 0.3% generic products companies
• Distribution to 100+ countries • Leveraging proprietary data
Alternative Asset Management • Integrated solutions across APIs, formulations • Offers information and analytical insights
• Marquee partners: CDPQ, APG, Bain, CPPIB and delivery systems
• Global team of over 1,200 eminent industry
• 13 sites (9 USFDA inspected) across US, UK experts (380+ in India)
Housing Finance and India
• Launched HFC in Sep 2017 and expanded • Recurring revenue model and high client
presence to Mumbai, Pune, Delhi-NCR and retention
Bengaluru
India Consumer Products
Diversified Retail Exposure via Shriram • Among the leading Indian OTC players
• Strong position in CVs, SME, Insurance • Pan-India distribution network
FY2018 Capital Employed1 : 58% FY2018 Capital Employed1 : 25% FY2018 Capital Employed1 : 17%
Note: 1) As per books. Excludes unallocated portion of capital employed to various business segments; 2) ROE for current reported period Q1FY2019 is considering Cash Tax and other synergies from merger
Piramal Enterprises Limited – Investor Presentation Page 4
Efficient capital allocation over years
Demonstrated track record of delivering value through focus on operating excellence, timely investments as well as disciplined exits
Loan Book Rs.46,995 Cr (on B/S) ~Rs.6,652 Crores invested in
& Alternative AUM Rs.7,620 Cr Pharma
8 businesses successfully built
6 year loan book CAGR: 122%1 7 Year Revenue CAGR : 16%1 across multiple sectors, 3 new
Q1 FY19 ROE : 19% Q1FY19 Global Pharma businesses in building up phase
Q1 FY19 GNPA ratio: 0.3% EBITDA Margin : 20%
8 acquisitions in last 3 years
Rs.4,583 Crores invested in Capital ~Rs.5,000 Crores invested in Company has made over 50
Shriram Group allocation Healthcare Insight and Analytics acquisitions till date. Most of these
Around 20% appreciation in acquisitions were successful
Around 16% annualized
USD (relative to INR) since
return on STFC and SCUF
investment
Peers trading at attractive
valuations in US
Rs.5,680 Cr of capital returned Over the preceding 30 years, more
to shareholders since 2010
than 90% of our key capital
Buyback of Rs.2,508 Cr allocation decision turned out to be
Annual dividends of Rs.2,568 Cr2 successful
& Special dividend of Rs. 604 Cr
FY2018 Dividend Payout – 29 %
Note: 1) CAGR is calculated based on reported annual numbers; 2) Excludes any dividend payout upon conversions of CCDs & related Rights till book closure date
Piramal Enterprises Limited – Investor Presentation Page 5
Delivering robust growth - track record
(In Rs. Crores)
Total Revenues1 Adjusted Net Profit1,2.3
6 yrs CAGR – 29% 6 yrs CAGR – 55%
10,639
Net Profit Net Profit Margin %
5% (6%) (11%) 8% 14% 15% 15%
8,547
1,551
1,252
6,381
905
5,123
4,503
3,544
421
112
2,352
(227)
(501)
FY12 FY13 FY14 FY15 FY16 FY17 FY18
FY12 FY13 FY14 FY15 2 FY16 FY17 FY18 3
Note:
1) FY2016, FY2017 and FY2018 results have been prepared based on IND AS, prior periods are IND GAAP; 2) FY2015 net profit excludes exceptional gain on sale of 11% stake in Vodafone India partly offset by
the amount written down on account of scaling back of our investments in NCE research.; 3) FY2018 adjusted net profit excludes synergies on account of merger of subsidiaries in Financial services segment
Piramal Enterprises Limited – Investor Presentation Page 6
Consistently delivering strong performance (In Rs. Crores)
Revenues Net Profits
Period Reported Period Previous Period % YoY Change Reported Period Previous Period % YoY Change
Q1FY15 1,182 965 +22% 55 (147) NM
Q2FY15 1,243 1,131 +10% 41 (32) NM
Q3FY15 1,400 1,286 +9% 224 (11) NM
Q4FY15 1,298 1,121 +16% 100 (311) NM
Q1FY16 1,401 1,182 +19% 169 55 +206%
Q2FY16 1,504 1,243 +21% 235 41 +473%
Q3FY16 1,786 1,400 +28% 307 224 +37%
Q4FY16 1,691 1,298 +30% 193 100 +93%
Q1FY17 1,776 1,401 +27% 231 169 +36%
Q2FY17 1,966 1,504 +31% 306 235 +30%
Q3FY17 2,342 1,786 +31% 404 307 +32%
Q4FY17 2,463 1,691 +46% 311 193 +61%
Q1FY18 2,254 1,776 +27% 302 231 +31%
Q2FY18 2,536 1,966 +29% 384 306 +25%
Q3FY18 2,858 2,342 +22% 490 404 +21%
Q4FY18 2,991 2,463 +21% 3754 311 21%
Q1FY19 2,902 2,254 +29% 3825 302 27%
12 consecutive quarter of delivering 12+ consecutive quarter of delivering
Revenue growth higher than 20% Adjusted Net Profit growth over 20%
Note:
1. FY2016, FY2017 and FY2018 results have been prepared based on IND AS, prior periods are IND GAAP; 2. FY2015 quarterly net profit numbers exclude exceptional gain from Vodafone transaction and exceptional loss from NCE shutdown;
3. NM – Not measurable; 4. Q4FY2018 is adjusted net profit excludes synergies on account of merger of subsidiaries in Financial services segment; 5. Q1FY2019 adjusted net profit excludes Exceptional Item of write off of Imaging assets
Piramal Enterprises Limited – Q4
Investor
& FY2017
Presentation
Results Presentation Page 7
Various business segments growing consistently over years
Metrics showing YoY revenue growth
FY13 FY14 FY15 FY16 FY17 FY18
Businesses
H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2
Pharma Financial Services
Financial Services
Healthcare Insight & Before acquisition
Analytics of DRG
Total Revenues
> 20% 11%-20% 1%-10% 0% < 0%
Piramal Enterprises Limited – Investor Presentation Page 8
Strong performance trend in Financial Services
Financial Services Performance • Growth: PEL’s loan book has grown at a robust CAGR of
122% over last 6 years.
(In Rs. Crores) — Consistently delivering 60%+ YoY growth in loan
Loan Book ROE (%)
book in each of the last 14 quarters
NR1 15% 16% 20% 25%+ 25%+ 19% — During Q1FY2019 loan Book grew 64% YoY to Rs.
46,995 Crores
6 yrs Loan Book 42,168
CAGR 122% Financial Services
• ROE: The Company has recorded an ROE of 25%+ over
last 10 consecutive quarters prior to the fund raise
through QIP and Rights Issue
Gross NPA ratio as on
31 Mar 2018 is 0.3% 24,975
• Asset Quality: Consistently maintaining a healthy asset
quality; GNPA below 1% since last 10 quarters
13,338
• Portfolio Diversification: The consistent robust growth
4,766
350
2,016 2,861 in loan book is an outcome of our strong diversification -
Launched 22 products across various business verticals
FY12 FY13 FY14 FY15 FY16 FY17 FY18 in last few years
Note:
1. NR – Not Reported
Piramal Enterprises Limited – Investor Presentation Page 9
Consistent performance trend in Pharma
Pharma Performance
(In Rs. Crores)
• Growth: PEL’s Pharma revenue has grown at a
Pharma Revenue 1 Global Pharma EBITDA Margin (%)
CAGR of 16% over last 7 years
10% 11% 14% 16% 16% 17% 20% 22% •
Profitability: Global Pharma (accounts for 92% of
Pharma revenues) has delivered a strong growth in
7 yrs Revenue EBITDA margins from 10% in FY2011 to 22% in
Financial Services
CAGR 16%
4,322 FY2018
3,893
3,467 • Quality & Compliance: Since FY2011, PEL
3,008
2,715 successfully cleared 32 USFDA inspections, 106
2,339
other regulatory audits and 877 customer audits
1,906
1,537
• Differentiated Model: Our differentiated business
model has ensured that we perform better than
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 most of the other Indian Pharma companies
Note:
1. Pharma Revenue includes Global Pharma & Consumer Products Revenue. Global Pharma revenue accounted for 92% of the Pharma revenue during FY18
Piramal Enterprises Limited – Investor Presentation Page 10
Returns to shareholders consistently outperforming all benchmarks
Consistently delivered strong shareholder returns – significantly Rs.5,680 Crores3,4,5 returned to shareholders since sale of
higher than benchmarked indices¹ Domestic Formulations business in 2010
(Rs. Crores)
5 year Annualized Return2 6,593%
Normal dividend Special dividend Buyback
PEL 40% 5
4525 5,680
Nifty 14%
362
302
Nifty PEL 345
906
604
302 302
2,709 302
1143%
871% 4,866
4,219 4,564
450% 446% 3,011 3,313
FY2017 Dividend Payout – 29 %
2,709
192% 2,508
121% 70% 95% 140%
6% 17% 41% 37%
201
1 yr 2 yrs 3 yrs 4 yrs 5 yrs 10 yrs 20 yrs
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Total
Annualized return to
Revenue CAGR for Net Profit CAGR for
23% last 30 years 29% last 30 years 29%* shareholders over
last 30 years
Notes:
1) Total shareholder returns are as on 30 Apr 2018. Assumes re-investment of dividend in the stock (Source : Bloomberg); 2) Annualized returns are as on 30 Apr 2018; 3) Of the buy back of 41.8 mn shares shown in
FY11, buyback of 0.7 mn shares happened in FY12; 4) Capital returned to shareholder through dividends doesn’t include amount paid under Dividend Distribution Tax; 5) Excludes any dividend payout upon
conversions of CCDs & related Rights till book closure datePiramal Enterprises Limited – Investor Presentation Page 11
Board of Directors
AJAY PIRAMAL
CHAIRMAN
AWARDED “ASIA BUSINESS LEADER OF THE YEAR” BY CNBC ASIA
NON - EXECUTIVE DIRECTOR, TATA SONS LIMITED
CHAIRMAN, SHRIRAM CAPITAL LIMITED
CO – CHAIR, UK–INDIA CEO FORUM
DIRECTORS INDEPENDENT DIRECTORS
DR. SWATI PIRAMAL DR. R MASHELKAR
VICE-CHAIRPERSON N VAGHUL EMINENT SCIENTIST
EMINENT SCIENTIST FORMER CHAIRMAN, FORMER DG, CSIR
AWARDED PADMA SHRI ICICI BANK AWARDED PADMA VIBHUSHAN
NANDINI PIRAMAL
EXECUTIVE DIRECTOR, KEKI DADISETH S RAMADORAI
OTC, HR, QUALITY & RISK FORMER CHAIRMAN, FORMER VICE-CHAIRMAN,
MBA, STANFORD HINDUSTAN UNILEVER LTD TCS
ANAND PIRAMAL PROF. GOVERDHAN MEHTA
NON-EXECUTIVE DIRECTOR, EMINENT SCIENTIST SIDDHARTH (BOBBY) MEHTA
HEADS PIRAMAL REALTY FORMER DIRECTOR - IISc FORMER PRESIDENT & CEO
MBA, HARVARD AWARDED PADMA SHRI TRANSUNION
VIJAY SHAH GAUTAM BANERJEE
EXECUTIVE DIRECTOR, DEEPAK M SATWALEKAR SENIOR MD & Co-CHAIRMAN,
25+ YEARS WITH GROUP FORMER MD & CEO, ASIA OPERATING COMMITTEE,
TURNAROUND BUSINESSES HDFC STANDARD LIFE BLACKSTONE, SINGAPOREPiramal Enterprises Limited – Investor Presentation Page 12
Robust Governance Mechanism
Board of Directors
Legal, Risk, Quality and Compliance teams are
independent and report directly to the Board members
Board Sub-committees
PHARMA FINANCIAL SERVICES HEALTHCARE INSIGHT & ANALYTICS
5 Investment Committees for Real Estate
Lending, RE Fund Management, Healthcare Insight & Analytics
Pharma Operations Board
Corporate Finance Transactions, Emerging Board
Corporate Lending and Housing Finance
• Executive Directors
• Executive Directors • Independent Directors • Independent Director
• Key Business CEOs • Financial Services CEO • Business CEO
• External Experts • External Experts • External Expert
• Business Vertical HeadsPiramal Enterprises Limited – Investor Presentation Page 13 Top Institutional Investors invested in the company
Piramal Enterprises Limited – Investor Presentation Page 14
Strategic partnerships
Total AUM - €479 Bn Total AUM - US$37 Bn Total AUM - C$317 Bn Total AUM - C$60 Bn
Alliance Partner – Alliance Partner – Alliance Partner – Alliance Partner –
Infrastructure Financing Distressed Asset Investing Real Estate Financing Real Estate Financing
Total AUM – US$22 Bn Market Cap - US$62 Bn Market Cap - US$66 Bn Market Cap - US$113 Bn
PEL invested in JV Partner PEL had invested Acquirer – Domestic
Shriram Group in Vodafone India Formulations Business
Note: Market Capitalisation data as on 2nd Aug 2018. Source: Yahoo FinancePiramal Enterprises Limited – Investor Presentation Page 15
Values Create Value
Tenured Leadership
Partnerships
Long term partnerships with financial and Professional management team
operational partners
Experienced leadership with domain expertise
Pharma business developed through relationships
Long-standing relationships with global partners
including Allergan (JV since 1996), Bain (JV for
distressed debt)
Alignment with Minority Shareholder Interests
Knowledge
Financial Services
Action Largest effective promoter shareholding among
Care Financial Institutions
Impact No equity investments of Promoters outside of
Shriram –Shared Vision
Piramal Group
Retail exposure through investments in Shriram No inter-group lending to Piramal Realty
Group
ESOP program funded by Promoters since 1996
Opportunity to invest in Shriram Group emerged due
to matching set of values
Mr. Ajay Piramal is the Chairman of Shriram Capital
Business Ethics, Integrity and Corporate Governance
32 US FDA Inspections cleared since 2011
High asset quality – GNPA1 of 0.3% in Q1 FY2019
Reputed and experienced Board
Note:
(1) Based on 90 days past due (DPD)Piramal Enterprises Limited – Investor Presentation Page 16 Financial Services
Piramal Enterprises Limited – Investor Presentation Page 17
Diversified exposure across both wholesale and retail financing
Financial Services
Wholesale business Retail business Distressed Asset Platform
Lending Alternative AUM Housing Finance Investments in Shriram India Resurgence Fund
Loan Book – AUM – Loan Book – Total investments – JV with Bain Capital
Rs. 45,391 Cr Rs. 7,620 Cr Rs. 1,604 Cr Rs. 4,583 Cr Credit
Real Estate CFG ECL Real Estate CFG SCL STFC SCUF
Loans - Loans – Loans – AUM – AUM –
Rs.34,814 Cr Rs.9,414 Cr Rs.1,163 Cr 20% stake 10% stake 10% Stake
Rs.5,790 Cr Rs. 1,830 Cr
CFG – Corporate Finance Group; ECL – Emerging Corporate Lending; HFC – Housing Finance Company; SCL – Shriram Capital Limited;
STFC – Shriram Transport Housing Finance; SCUF – Shriram City Union Finance
Strong portfolio with a total investments, loans and assets under management of over Rs.59,000 CroresPiramal Enterprises Limited – Investor Presentation Page 18
Building a robust and scalable financial services platform….
Continued scaling up of loan book
22,400
(in Rs. Crores)
Outstanding loan book Loans approved but yet to be disbursed
42,168
• Total Loan Book grew 64% YoY to Rs. 46,995 Crores as on 30 June 2018; Rs. 22,400
Crores of loan approved but yet to be disbursed
38,036
• Long term debt instruments of PCFHL were rated ‘AA+; Stable’, they were earlier
33,261
rated ‘AA; Stable’ by CARE Ratings for the erstwhile company
46,995
28,648
• Robust asset quality :
Financial Services
24,975
— Gross NPAs ratio (based on 90 dpd) remained stable at 0.3% in Q1 FY2019
22,651
19,640
— Provisioning maintained at 1.8%
15,998
13,338
11,069
9,020
7,611
4,766
3,933
3,602
3,193
2,861
2,650
2,590
2,588
2,016
1,349
812
498
350
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Mar-18
Jun-18
Jun-12
Jun-13
Jun-14
Jun-15
Jun-16
Jun-17
Sep-14
Sep-12
Dec-12
Sep-13
Dec-13
Dec-14
Sep-15
Dec-15
Sep-16
Dec-16
Sep-17
Dec-17
Alternative Assets Under Management was Rs. 7,620 Crores as on 30 June 2018Piramal Enterprises Limited – Investor Presentation Page 19
….through consistently expanding product portfolio
+11
Loan against property
Total no. of products - 22 Top-up on existing loan
Small CF
Home loans
Alternative Asset
Real Estate Loan against shares
Management
Loan against property
Corporate Finance Emerging Corporate
Lending Senior debt
Working Capital term
India Resurgence Fund Housing Finance loan
Capex Funding
Financial Services Promoter Funding
+3 Project Finance
Products added
India Resurgence Fund India Resurgence Fund
Acquisition Funding Acquisition Funding
+2 Lease Rental Discounting Lease Rental Discounting
Corporate Finance - AUM Corporate Finance - AUM Corporate Finance - AUM
+3 Senior Lending Senior Lending Senior Lending
CF - Commercial CF - Commercial CF - Commercial CF - Commercial
CF - Residential CF - Residential CF - Residential CF - Residential
+1 Loan Against Shares Loan Against Shares Loan Against Shares Loan Against Shares
Mezzanine & Structured Mezzanine & Structured Mezzanine & Structured Mezzanine & Structured Mezzanine & Structured
+1 Lending Lending Lending Lending Lending
1 Mezzanine Lending Mezzanine Lending Mezzanine Lending Mezzanine Lending Mezzanine Lending Mezzanine Lending
Real Estate – AUM Real Estate – AUM Real Estate – AUM Real Estate – AUM Real Estate – AUM Real Estate – AUM Real Estate – AUM
FY2006 FY2012 FY2013 FY2015 FY2016 FY2017 FY2018
Note : CF – Construction FinancePiramal Enterprises Limited – Investor Presentation Page 20
Enhancing diversification in the lending portfolio; significantly lowering overall risk profile
Trend of changing portfolio mix (%)
Mezzanine RE RE Construction Finance - Residential RE Construction Finance - Commercial
RE Lease Rent Discounting Corporate Finance Group Emerging Corporate Lending
Housing Finance
Total 7,611 11,069 15,998 22,651 28,648 38,036 46,995
(In Rs. Crores)
100%
17% 15% 15% 12% 16% 12% 15% 12% 15% 13%
18% 17%
6% 5% 7% 19% 20%
80% 4% 6% 7% 6%
18% 8% 10%
23% 9% 9% 9%
28% 7%
34% 38% 6% 7%
60% 40% 44%
43% 46%
39%
40% 40%
40% 76% 39%
65% 59% 53%
20% 44% 45%
38% 35% 29% 30% 29% 24% 21% 19%
0%
Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18
Note : RE – Real Estate; CFG Loan book includes old education loansPiramal Enterprises Limited – Investor Presentation Page 21
Strong trend of growth in income; maturing of the book
Rapidly growing income from Financial Services business Strong trend of cumulative exits / repayments1,2
(in Rs. Crores) (in Rs. Crores)
4,981 28,948
6 yrs CAGR 60%
Loan Book
Asset Management
3,352
Financial Services
13,625
1,740
8,531
937 4,799
726
297 389 2,150
830 1,027
223
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Notes:
1. FY2016, FY2017 & FY2018 numbers are as per IND AS and prior period are as per IND GAAP. 3. Exits from Asset Management business have been included on calendar year basis
2. Excludes our investment in Vodafone India, which was exited during FY2015Piramal Enterprises Limited – Investor Presentation Page 22
Consistently expanding loan book across segments
Rapidly growing Real Estate (incl. Housing Finance) loan book Strong growth in Corporate Finance and ECL portfolio
(in Rs. Crores) (in Rs. Crores)
9,125
33,043
3 yrs CAGR 126%
5 yrs CAGR 88%
21,209 Financial Services
3,766
11,166
2,172
3,972
794
1396 1568
As on As on As on As on As on As on As on As on As on As on
Mar 2013 Mar 2014 Mar 2015 Mar 2016 Mar 2017 Mar 2018 Mar 2015 Mar 2016 Mar 2017 Mar 2018Piramal Enterprises Limited – Investor Presentation Page 23
Real Estate end-to-end financing model
Private Mezzanine Construction Lease Rent Housing
Particulars
Equity Lending Finance Discounting Finance
Post land purchase till
Lease rental
Stages of lending for a Primarily for land commencement of For construction of Providing housing
discounting for
project purchase construction (Phase of projects loans to home buyers
commercial projects
obtaining approvals)
Off Balance Sheet (Third
Party Funds with PEL On Balance Sheet
Current Size sponsor commitment On Balance Sheet On Balance Sheet On Balance Sheet
upto 7.5%)
Started in 2006;
Year of commencement acquired by PEL in 2011 2015 2016 2017
2011
Current Size Rs.5,151 Crores Rs.8,974 Crores Rs.21,561 Crores Rs.4,279 Crores Rs.1,604 Crores
Yield / IRR 20-24% 14-17% 13-15% 9-11%* 9-11%*
Tenor 4-6 years 3-5 years 4-6 years 7-15 years 20-30 years
* To down-sell a portion of the portfolio to maintain ROEPiramal Enterprises Limited – Investor Presentation Page 24
How will we grow rapidly and create a sizeable HFC?
Significant opportunity from existing developer Leveraging Brickex Focusing on Tier II and Tier III cities
relationships
130+
Developers Particulars Unsold Total Targeting to open 24 branches by 2020
(Rs. 000‘ Crores) Value1 Value1
10,000+ Distributors Brickex is India’s leading
Total projects financed by B2B aggregation platform
60 118
PEL focusing on sales &
Total projects with
marketing of Real Estate Tier I
382+ 151 296 and Financial Services
Projects developers (PEL customers) 50% 50%
products with a network
of 10,000+ distributors Tier II & III
Tapping even a portion of the
existing developers’ customer base across Tier I cities
can create a significant opportunity
Extending loans to the self-employed LAP, Small Construction Finance Affordable housing
Small Construction Finance
• Our development partners entering affordable
Salaried • Target top developers in Tier II & III cities segment
30% • Leveraging Brickex for market insights / sourcing o To selectively fund based on existing
FY2020 Loan against property (LAP) relationship
• To enter the market through Piramal ecosystem • Higher margins with selective use of
Self-employed syndication/down selling
70% • Specialised underwriting cell for self-employed
Note: 1) Values are based on Sept 2017Piramal Enterprises Limited – Investor Presentation Page 25
HFC : Measures to reduce costs and enhance returns
Hub and Spoke model (Branch light) Latest technology
• Consistency in decision making • Leveraging Fintechs, etc.
• Better control • Transparency on application status
• Scalability with optimum cost • Quick turnaround time
Leveraging group’s shared services Sourcing from developers (B to B to C Model) and Brickex
• Manage non-core activities efficiently • Lower cost compared with DSAs, connectors, etc.
• Greater economies of scale • Properties sold through Brickex will be referred to
our HFC for loans – low cost of sourcing
Usage of data, analytics and bureau insights Diversification and expected rating upgrade
• For setting up credit policy framework • Improve leveraging capability
• For early warning signals • Reduce cost of borrowings
• Enhance ROE for overall Financial ServicesPiramal Enterprises Limited – Investor Presentation Page 26
Corporate Finance Group
• Diversified offering across sectors including senior debt,
Type of • Average tenure of around 5-6 years and lock in period
project finance, acquisition finance, promoter finance, Tenure
product for 1-2 years.
and mezzanine investments
• Mostly first charge & escrow on existing / future
Nature of Security
revenues, fixed / movable assets, pledge of shares, • 1.5-2x times
security cover
corporate guarantee, etc.
• Loan book grew 163% YoY to Rs.9,414 Crores as on 30
Loan book Yield • Yield range widened to 14-17%
June 2018
Sector Agnostic
Auto
Structured Finance Renewables Infra Cement E’tainment Services Telecom Logistics Others
Component
Transactions
Senior lending
Promoter funding
Loan against shares
Mezzanine lending
Project Finance Piramal Enterprises Limited – Investor Presentation Page 27
Launch and progress of Emerging Corporate Lending
Target segments
Financing requirements of emerging and mid-market companies
Products offered
Senior Debt, Loan against Property, Lease Rental Discounting, Promoter Financing, Structured Debt, Loans against Shares etc.
Ticket size
Offering solutions with ticket size ranging from Rs.10 Crores to Rs.125 Crores
Sector-agnostic platform
Funding diverse sectors including auto ancillaries, manufacturing, pharma, services, hospitality, etc.
Risk profile
Low Risk Portfolio with deals backed by cashflows
Progress so far
Loan book of Rs.1,163 Crores as on 30 June 2018; disbursed Rs.257 Crores during Q1FY2019
Set up team of 21 people including underwriting, investment, dedicated business operations, legal and asset management functions
For deal origination, senior relationship managers are based in Mumbai, Delhi, Chennai, Hyderabad, Pune and Ahmedabad
— Bangalore to be staffed in Q2FY2019Piramal Enterprises Limited – Investor Presentation Page 28
Borrowing profile
PEL Financial Services Borrowings Mix
Funding mix by investor Funding mix by type of instrument
35% Banks Term loans
22%
6% 26%
Mutual Funds
NCDs / Bonds
As on Insurance/Pensions/PFs As on
7%
30 June 30 June 7% Commercial Paper
Others
2018 2% 2018 Others
FIIs
1% 1%
NBFCs Tier II
49% 44%
As on 30 June 2018
Tenure-base Fixed vs. Floating
Short Term
35% Borrowings Floating
43%
Long term 57% Fixed
65% BorrowingsPiramal Enterprises Limited – Investor Presentation Page 29
Merger of Piramal Finance and Piramal Capital with Piramal Housing
Finance
Before Merger Restructuring Mechanics After Merger
Issue of shares
PEL to the PEL PEL
shareholders of
100% 100%
PFL and PCL
100%
PFL PCL PFL PCL PHFL
100%
100%
PHFL’s name has been changed to
PHFL PHFL
PFL & PCL Piramal Capital & Housing
merged in PHFL Finance Limited
Note :
PEL – Piramal Enterprises Ltd. PCL – Piramal Capital Ltd.
PFL – Piramal Finance Ltd. PHFL – Piramal Housing Finance Private Ltd.Piramal Enterprises Limited – Investor Presentation Page 30
Synergies from the merger
Improve profitability and risk adjusted returns Enhance lender base
Synergies expected to improve the annual ROE of the Open up avenues for combined entity to raise funds from
Financial Services business by 2-3% in the next few years diversified lenders
Improvement in credit rating Optimum capital adequacy
Synergies
Diversified portfolio comprising both retail and wholesale from
Optimum capital adequacy will improve returns
shall improve credit rating Merger
Reduction in borrowing cost Higher allocation from Mutual Funds on lending to HFCs
Borrowing cost expected to go down by 25 to 50 basis Mutual Fund can lend higher amount to HFCs as against
points NBFCs (40% vs. 25% of overall lending)
Merger to improve ROE of Financial Services business in a range of 2-3% every yearPiramal Enterprises Limited – Investor Presentation Page 31
Performance metrics
PEL Financial Services (excluding Shriram) performance against various parameters
Particulars Q1 FY2019
Total Loan Book size Rs. 46,995 Crores
Total Equity in Loan Book and AUM business Rs.9,855 Crores
Average Yield on Loans 13.9%
Average Cost of Borrowings 8.5%
Net Interest Margin 7.1%
Cost to Income Ratio 18.0%
Total Provisioning 1.8%
Gross NPA ratio (based on 90 dpd) 0.3%
ROA 3.6%
ROA (considering Cash Tax and other synergies from merger) 4.2%
ROE 17%
ROE (considering Cash Tax and other synergies from merger) 19%+
Note: Provisioning numbers are in line with IND ASPiramal Enterprises Limited – Investor Presentation Page 32
Consistently delivering exceptional performance quarter after quarter
Trend of key ratios
FY2016 FY2017 FY2018 FY2019
3M 6M 9M 12M 3M 6M 9M 12M 3M 6M 9M 12M 3M
Loan Book 138% 150% 181% 180% 110% 118% 105% 87% 79% 69% 68% 69% 64%
Growth (%)1
GNPA Ratio (%) 1.5% 1.1% 1.2% 0.9% 0.6% 0.4% 0.5% 0.4% 0.2% 0.2% 0.4% 0.3% 0.3%
ROE (%) 25%+ 25%+ 25%+ 25%+ 25%+ 25%+ 25%+ 25%+ 25%+ 25%+ 21%2 19%2 19%3
Note :
1. As on end of reported period
2. ROE calculation also takes into account the capital allocation from recent fund raise. During Q3 FY2018, Rs 2,300 Crores was allocated to financial services.
In Q4 FY2018, the entire Rs.5000 crores of estimated allocation got allocated towards financial services business
3. ROE considers cash tax and includes other synergies on account of merger of subsidiaries in Financial services segmentPiramal Enterprises Limited – Investor Presentation Page 33
Performing better than the best performing banks and NBFCs of India
25%
X-axis : FY2018 Gross NPA Ratio (%)
Y-axis : FY2018 ROE (%)
Size of the circle : FY2018 Loan book growth (%)
22%
PEL
PEL’s Financial Services business
Banks & NBFCs
FY2018 RoE (%)
19%
16%
13%
10%
2.5% 2.0% 1.5% 1.0% 0.5% 0.0%
FY2018 Gross NPA ratio (%)
Note: Banks and NBFCs includes Bajaj Finance, HDFC Ltd, HDFC Bank, Kotak Bank, IndusInd Bank and Yes BankPiramal Enterprises Limited – Investor Presentation Page 34 Measures to ensure healthy asset quality
Piramal Enterprises Limited – Investor Presentation Page 35
Review and governance mechanism
Board of Directors
Legal and Risk teams are
independent and report directly to
Board Sub-committee for Financial Services the Board members
This sub-committee comprise of Executive Directors,
Independent Directors & External Experts
5 Investment Committees for Real Estate Lending, RE Fund Management, Corporate Finance Transactions, Emerging Corporate Lending
and Housing Finance
These investment committees comprise of Executive Directors, Managing Director, Independent Directors, External Experts and Business Heads
Deal Clearance Committee
Independent Risk Independent
Asset Management Team Finance & compliance Brickex
Management Team Legal Team
Investment TeamsPiramal Enterprises Limited – Investor Presentation Page 36
Stringent controls across stages of lending
Controls at Pre-qualification stage
Real Estate lending in Tier I cities of
Mumbai, Pune, Bengaluru Hyderabad, 98%
Presence in only Tier 1 cities Chennai and NCR
‘Grade A’ developers having strong track record Portfolio comprising of Grade A
Developers
70%+
Controls at Pre-approval
Financial Services stage
Sensitivity analysis not just based on sales and cost but also based
Deals with underwriting assumptions
based also on delay in velocity by 6 to 100%
on velocity
12 months
Proprietary risk scoring system to avoid bias
Deals with Escrow A/C 100%
Structuring each transaction uniquely to address any specific risks
associated with the project Deals with a ‘Minimum Selling Price’
clause ensuring collection of sales 100%
Strategic alliances with global funds serving as external validation of value into our Escrow A/C
underwriting and reassures investment thesis
Deals with fixed IRR & obligation to
Security and cash cover of 1.5x-2x based on conservative pay without any linkage to market 62%
underwriting assumptions performance or sales realizationPiramal Enterprises Limited – Investor Presentation Page 37
Constant asset monitoring ensuring healthy asset quality
Developers 130+ Transactions 239+ Projects pan India 382+
Site Visits / month 190+
Constant monitoring by local teams in each city and dedicated asset Developer sales MIS monitored per
monitoring team month 100%
Financial Services
— Monthly / Quarterly site visits to assess the project progress Project escrow Accounts monitored
per month 100%
— Monthly performance review with regard to sales units, value &
price, collections and various costs Transaction coverage in Early Warning
Signal Meetings 100%
— Computation of monthly cash cover to ensure adherence to
stipulated cash cover Projects under construction stage /
completed 80%
Gross NPA ratio of 0.3%Piramal Enterprises Limited – Investor Presentation Page 38
Sample images of the construction sites - Proof of site visits with date
and time
Oct’16 – RCC work in progress Apr’17 – façade work in progress Dec’17 – façade work nearing completion
Financial Services
Monthly construction progress monitoredPiramal Enterprises Limited – Investor Presentation Page 39
Sample of Site Visit Report
Expected
Tower Name Dec 07, 2016 Nov 23, 2016 Oct 20, 2016 Sep 20, 2016 Aug 16, 2016 Jul 18, 2016
completion date
No. of Labours on
400 - 425 400 - 425 400-425 430-450 360-380 310-330
site
Tower 1 : 4B + G + 22
Flr.
Financial Services
Work in progress on Work in progress on Work in progress on Work in progress on Work in progress on Work in progress on
RCC Mar, 2017
18th and 19th floors 18th floor. 14th & 15th floor. 12th & 13th floors. 9th & 10th floors. 6th & 7th floors.
Block Work Jun, 2017 12th floor in progress. 9th floor in progress. 6th floor in progress. 4th floor in progress. 3rd floor in progress. 2nd floor in progress.
Gypsum started on 1st
Plastering / Gypsum Sep, 2017 - - - - -
and 2nd floor.
Awaiting for material
Flooring Dec, 2017 to start with flooring in - - - - -
next week.
Finishes Jun, 2018 - - - - - -
Dashboard of site visits and stalled projects separately highlighted to the MD on a monthly basisPiramal Enterprises Limited – Investor Presentation Page 40
Sample of overall Portfolio Performance Review Sheet
O/s Summary (Rs crs)
No. of Pune / Bengaluru /
Category Mumbai NCR Chennai Total
Deals Ahmedabad Hyderabad
Green
– No Issue over next 6 months
Yellow
– No issue ; however, closely monitor for next 6 months
Orange
– Envisage stress over next 6 months
Financial Services
Red
– Default
Total
Note: Colour coding is done after factoring in the project performance vis-à-vis budget on the following parameters
1. Sales Velocity in terms of units, area and value
2. Pricing – per sq ft and ticket size
3. Collections
4. Approval timelines
5. Construction cost incurred
6. Cash cover
7. Ability to meet principal and interest obligations
8. Site visit findingsPiramal Enterprises Limited – Investor Presentation Page 41 Distressed Investment Opportunity
Piramal Enterprises Limited – Investor Presentation Page 42
Distressed Investment Opportunity
Industry Overview Our Differentiated Positioning and Strategy
Stressed Loans (% of Bank Loans in India)1
GNPA Restructured Board and Sponsors track
investment record in
committee turnaround
12.5% with deep
9.1% investments
insights
Mar '13 Mar '18 Flexible and
Preferential
efficient
• India must resolve its NPL problem (~USD 220-250 Bn) to fund new asset investment
access to
creation (key for maintaining 6-7% GDP growth); 11 banks placed in PCAP3 stakeholders
structure
• RBI firm on ensuring that Debt Restructuring schemes are viable (rated
investment grade), else pushing banks to recover via IBC/cash settlement Ability to carry Tailored
• Stress lies in industrial sectors (power, steel, cement), export businesses out deep investment
approach
(textiles, pharma) & domestic underfed sectors (hospitals, hotels) business
diligence
• Enforcement via IBC has been slower than anticipated due to litigations &
delays in hearing; however both these issues are getting addressed
Overview of India Resurgence Fund Progress so far
• Investment across the capital stack (debt and equity) & across
• Active pipeline of ~USD 1 Bn of debt (to be acquired through IBC/directly
Product all sectors (other than real estate), with a view to drive control
from banks) across various sectors such as cement, chemicals, steel, etc.
and restructuring with active participation in turnaround
• The fund has received SEBI AIF approval for investing
• Partnership with Bain Capital Credit, a multi-asset alternative • The partnership has also received in-principal approval from the RBI for
Partner
investment firm with AUM of USD 37 Bn2 setting up an Asset Reconstruction Company
Note 1: Source: RBI Financial Stability Report
Note 2: Data estimated as of January 1, 2018. Bain Capital Credit AUM includes Bain Capital Credit, LP, its subsidiaries and credit vehicles managed by its AIFM affiliate.
Note 3: PCAP stands for RBI’s Prompt Corrective Action Plan under which various restrictions were imposed on certain banks by RBI (including on lending), with the objective of restoring their financial healthPiramal Enterprises Limited – Investor Presentation Page 43 Partnership with Shriram – Strategic in nature
Piramal Enterprises Limited – Investor Presentation Page 44
Partnership with Shriram – Strategic in nature
Acquired ~10% Acquired 20% Acquired ~10% Total
stake in STFC stake in SCL stake in SCUF investments in • Market capitalization of c. Rs. 443 bn
Invested Invested Invested Shriram Group (US$6.6bn) for listed entities1,2
Rs.1,636 Crores Rs.2,146 Crores Rs.801 Crores Rs.4,583 Crores
• US$ 21.8 bn3 of assets under
management
Share Price Performance since investments (Rs. per share)
• 3,500+ branches3
Shriram Transport Finance Shriram City UnionServices
Financial Finance
• Customer base of 19.9+ mn3
1,393 1,922 • Exposure to retail financing segments
including: Used and New CVs, Small and
+93% +60% Medium Enterprises, Consumer and Gold
loans, Life Insurance and General Insurance
723 1,200 • Leading player in used Commercial
Vehicle and Micro, Small and Medium
Enterprises financing
Note: FX rate: 1 USD= Rs. 65
4 4 (1) Listed entities include Shriram Transport Finance and Shriram City Union
10 May 2013 2 Aug 2018 5 Jun 2014 2 Aug 2018 Finance (2) As of 2nd Aug, 2018 (3) As of 31st March, 2018 (4) PEL’s purchase
price on the respective date of investment - Doesn’t include related costs in
acquiring these stakesPiramal Enterprises Limited – Investor Presentation Page 45
Future Roadmap: On track to create one of the largest well-diversified
Financial Services businesses of India
Building an Integrated Financial Services Business
• Continue to grow real estate loan book by launching relevant, innovative and customized solutions
• Further growing the recently launched products such as commercial construction finance and LRD
• Continue to diversify loan book through focus on non – real estate space through Corporate Finance Group and Emerging
Corporate Lending Group
• Scale up Housing Finance through:
– Developer relationships through point of presence loan origination
Financial Services
– Brickex network
– Enter into tier I and tier II cities
• Maintain focus on asset quality while generating higher risk adjusted ROEs
• Contribute in taking Shriram to the next level
• Optimize liability franchise
– Further deepen and diversify funding sources
– Target credit rating improvement
• Continue to enhance technology usage to improve efficiency through:
– Use of analytics for decision making
– Automation of system and processes to improve Turnaround Time (TAT)Piramal Enterprises Limited – Investor Presentation Page 46 Pharma
Piramal Enterprises Limited – Investor Presentation Page 47
Pharma business portfolio delivering strong growth within and outside
India
Piramal Pharma
FY2018 Rev: Rs.4,513 Crores
Global Pharma India Consumer Products
FY2018 Rev: Rs.3,976 Crores FY2018 Rev: Rs.537 Crores*
• End-to-end manufacturing • Strong portfolio of OTC brands
capabilities
• 8 brands among top 100 OTC
• 13 manufacturing facilities brands
• Portfolio of niche branded generic • Large distribution network
products
• Among top 5 OTC players
• Distribution to >100 countries
Note * Includes Allergan JV RevenuePiramal Enterprises Limited – Investor Presentation Page 48
Eight value accretive acquisitions to boost growth
Global Pharma
Growing largely organically since Abbott deal
Coldstream (Injectables) Injectable anaesthesia & pain
management products Pharma Revenues* (in Rs. Crores)
4,513
7 yrs CAGR 16%
4,054
3,632
Intrathecal severe spasticity & pain
Ash Stevens (HPAPI)
management products
3,122
2,819
2,440
1,988
India Consumer Products
1,605
4 brands from Pfizer 5 brands from Organon Baby-care brand- Digeplex and
India & MSD BV Little’s associated brands
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Notes: * Includes Allergan JV revenuesPiramal Enterprises Limited – Investor Presentation Page 49 Global Pharma
Piramal Enterprises Limited – Investor Presentation Page 50
Global Pharma : How are we rapidly moving up the value chain ?
1 Acquired global businesses to enter into niche capabilities
Injectable HPAPI
2 Expanding manufacturing capacities in niche areas
ADC Injectable Inhalation Anaesthesia Drug DiscoveryPiramal Enterprises Limited – Investor Presentation Page 51
Global Pharma: How are we rapidly moving up the value chain ?
3 Adding differentiated hospital branded generic products 4 Strong product portfolio to leverage global distribution network
organically and inorganically
Controlled substances Injectable Anaesthesia
Desflurane Intrathecal
• Leverage global distribution network by adding • Entry barrier – Complex to manufacture, sell and distribute
differentiated products resulting in limited competition
• Differentiated offerings – Niche branded generics and • Expands addressable market size from US$ 1 bn Inhalation
controlled substances Anaesthesia market to US$20 bn generic hospital product market
Our strategy of moving up the value chain will enable us boost growth and enhance margins significantlyPiramal Enterprises Limited – Investor Presentation Page 52
Creating a solid product portfolio
Product Portfolio
Injectable Anaesthesia / Intrathecal Severe
Inhalation Spasticity / Pain
Anaesthesia Pain Management Other Products
Management
Desflurane Sublimaze* Gablofen® Generics API
Sevoflurane Sufenta* Products under Vitamins & Premixes
development
Isoflurane Rapifen*
Acquired from
Mallinckrodt LLC Differentiated
Halothane in Mar 2017
Dipidolor* branded
To be launched in FY19 Acquired from hospital
Hypnomidate Janssen generics
Pharmaceutica
* Controlled substances in Oct 2016Piramal Enterprises Limited – Investor Presentation Page 53
Integrated in capabilities: Discovery – Clinical Development - Commercialisation
On- Off-
Discovery Preclinical Phase 1 Phase 2 Phase 3 Launch
patent patent
CRO Development (CDMO & Generic API) Late Phase & Commercial (CDMO), Generic API
Discovery Early Phase API Early Phase Formulation Late Phase API (including high Late Phase Formulation
Ahmedabad, (including high Potency) (OSD's & Steriles
India Potency) Mumbai, Ahmedabad – India (Injectables & FFS))
Ennore,India | Lexington, KY Digwal, India Aurora, Canada Pithampur, India | Morpeth,
Aurora,Canada | Grangemouth (ADC), UK Ennore, India Riverview, USA UK | Lexington, KY |
Riverview, USA Morpeth, UK, Grangemouth (ADC), UK
Special services
Antibody Drug High Potent (HPAPIs) Clinical Trial Supplies Regulatory, Patents, Vitamins & Nutrition
Conjugates (ADC) Riverview (USA) Morpeth (UK) Pharma co-vigilance Solutions Mahad
Grangemouth (UK) Mumbai (India)Piramal Enterprises Limited – Investor Presentation Page 54
13 manufacturing facilities both in East and West – All key sites US FDA
inspected
LEXINGTON MORPETH MUMBAI CHINA
High potent injectable API & Formulation API & Formulations Development Sourcing Office
development and manufacturing Development & Manufacturing
USFDA MAHAD PITHAMPUR
USFDA, MHRA
Vitamins & Minerals Premixes Formulations Manufacturing
RIVERVIEW
USFDA*, WHO-GMP USFDA, MHRA
HPAPI Development &
GRANGEMOUTH AHMEDABAD DIGWAL
Manufacturing
ADC Manufacturing 2 Sites :
USFDA 2 sites :
USFDA, MHRA • Drug Discovery
AURORA • Formulation Development • API Development & Manufacturing
API Development & USFDA, MHRA
Manufacturing • Anaesthesia Manufacturing
USFDA, MHRA
ENNORE
API Development &
Manufacturing
BETHLEHEM
Anaesthesia
Manufacturing
USFDA, MHRAPiramal Enterprises Limited – Investor Presentation Page 55
Global Pharma : Strengthening presence in key geographies
Strong presence in North America Expanding presence in Europe
Manufacturing Faculties • Aurora : API Development & manufacturing • Grangemouth : ADC Manufacturing
• Lexington : Sterile Development & Manufacturing • Morpeth : API & Formulation Development &
• Riverview : HPAPI Development & Manufacturing Manufacturing
• Bethlehem : Anaesthesia Manufacturing
% Global Business Revenues 29%
38%
(as on 31st Mar 2018)
% Global Business Assets
(as on 31st Mar 2018) 24% 43%
Distribution Presence 30% market share in US in Inhalation Expanding presence in key countries including
Anaesthesia UK, Italy, Germany, etc.
Distribution Model Through direct sales force Through direct sales force and distributorsPiramal Enterprises Limited – Investor Presentation Page 56
Global Pharma : Strengthening presence in key geographies
Strong presence in India
Manufacturing facilities in India
• Mumbai : API & Formulations Development
• Digwal : API Development & Manufacturing and Anaesthesia Manufacturing
• Pithampur : Formulations Manufacturing
• Ahmedabad : Drug Discovery and Formulations Development
• Ennore : API Development & Manufacturing
• Mahad : Vitamins & Minerals Premixes
33% of Total Assets of Global business is in India
Expanding Presence in Japan
One of the two approved generics in the market for Sevoflurane, with leading market share
Leading market share for Fentanyl with the only currently approved generic in the marketPiramal Enterprises Limited – Investor Presentation Page 57
How are we performing in the areas of compliance, quality and reliability ?
Since 2011, cleared all inspections : Recognized at reputed global forums :
• Global Pharma Services won the CMO Leadership Award 2018
• 32 USFDA inspections in all six categories in March 2018 at New York
• PEL won the ‘manufacturing Supply Chain Operational
• 106 other regulatory inspections Excellence in Pharmaceuticals” at 7th Manufacturing Supply
Chain Awards in Mumbai - February 2018
• 877 customer audits • PEL won the ‘Regulatory Procedures and Compliance’ award
at CPhI Pharma Awards (2017) in Germany in Oct 2017Piramal Enterprises Limited – Investor Presentation Page 58
Global Pharma : Growth Strategy
• Continue to add more products both organically and inorganically to leverage Strong revenue growth track record
our strong sales and distribution network (In Rs. Crores)
— Continue to look for acquisition opportunities in complex products
7 yrs CAGR 16% 3,976
— Launching latest generation Inhalation Anaesthesia i.e. Desflurane
— Integrate the acquired products and generate synergies 3,517
3,206
• Leverage and expand our end to end manufacturing and service delivering
capabilities (especially in niche capabilities i.e. injectable, HPAPI, ADC etc.)
2,765
— Good traction for development business and integrated offerings 2,506
— Injectable and HPAPI acquisitions will enhance cross selling 2,169
opportunities
1,768
— Undergoing capex worth over USD 85 mn to expand capacities and
capabilities across facilities 1,409
• Further expand our presence in strong markets including US, Europe, Japan etc.
• Continue to maintain focus on quality and compliance
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Continue to actively look for organic and inorganic opportunities to enhance growthPiramal Enterprises Limited – Investor Presentation Page 59
Global Pharma : Enhancing EBITDA Margin
Industry
standard
Margins
20-25%
22%
20%
16% 17%
16%
14%
11%
10%
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY20E
• Acquired high margin products • Backward integration for raw materials
• Introduction and growth of high margin products (including Desflurane etc.) • Further leverage global distribution
• Manufacturing at facilities with niche high-end capabilities • Optimise yields and manufacturing processes
• Higher capacity utilization • Cost improvement initiatives
EBITDA Margins to significantly improve in coming yearsPiramal Enterprises Limited – Investor Presentation Page 60
Why can we create a large and profitable global pharma business ?
End-to-end
Strong focus on
Significant market manufacturing Investing to move up
compliance, quality
opportunity capabilities with niche the value chain
and reliability
offerings
Potential to grow Strong presence in
Well-positioned to create a large, well-diversified
rapidly and expand US, Europe, Japan and
and profitable global pharma business
margins India
Offering
complete pool
Growing organically Strong portfolio of Large distribution
of services to large &
and inorganically niche products and network reaching
mid sized Pharma
services >100 countries
CompaniesPiramal Enterprises Limited – Investor Presentation Page 61 India Consumer Products
Piramal Enterprises Limited – Investor Presentation Page 62
Strong product portfolio
Eight brands among India’s top 100 OTC brands
Most brands are among the top two in their respective representative marketPiramal Enterprises Limited – Investor Presentation Page 63
Developed a large India-wide distribution network
Wide Distribution Network FY2008 FY2012 Now
No. of towns
present
16 481 2000
Total Outlet
presence
24,000 200,000 420,000
Chemist Outlet
presence
16,000 100,000 220,000
Field Force
Our chemist coverage is now comparable
with the top 3 OTC players 80 800 2,100Piramal Enterprises Limited – Investor Presentation Page 64
Adding products organically and inorganically
Products added organically Product portfolios added through acquisition
Instant pain relieving mouth A non-drowsy anti-allergy
ulcer gel Oil Balance Face Wash
OTC brand
& Face Scrub
5 brands from Organon
4 brands from Pfizer Ltd India & MSD BV
A sore throat pain relief Paan flavoured
A pregnancy test kit
product antacid
Detoxifies the after effects of Educational game Jungle Baby-care brand ‘Little’s’ Digeplex and associated brands
Ovulation test kit
socializing, etc. Magic Garden ScienczPiramal Enterprises Limited – Investor Presentation Page 65
Strong growth track record
1000
India Consumer Products revenues
(In Rs. Crores)
Consumer Products Total Revenue JV with Allergan1 Ranks
9 yrs CAGR 18% 537 537
426
357
313
271
196 220
177
124 375 346
209 243 261
125 128 138 170
76
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY20E
40 28 14 10 7 7 6 6 5 5 3
• Integration of acquired portfolios • Tap e-commerce, rural, exports & alternate opportunities
• Continue to add products both organically (including brand extensions) and through • Addition of new products or brands will leverage the distribution network; and help fixed
acquisitions cost amortisation resulting in higher margins
• Reduced stock-outs
Note: 1. Allergan JV revenue includes only PEL’s revenue share of 49%Piramal Enterprises Limited – Investor Presentation Page 66
How Consumer Products business can become a significant play for us?
Significant market Strong product
opportunity portfolio
Significant Leverage large
margin expansion India-wide
Well-positioned to create a large, well- distribution network
diversified and profitable India Consumer
Products business focusing on niche areas of
routine disruption
Launching new
Asset Light model products and
Acquiring extensions
leading brands or
Strong track
brands with
record
potential to become
#1Piramal Enterprises Limited – Investor Presentation Page 67 Overall
Piramal Enterprises Limited – Investor Presentation Page 68 Our differentiated business model enabling better performance vs. peers Revenue Growth Rates of Top Pharma companies Top Pharma Companies FY16 FY17 FY18 Sun Pharma 4% 11% (14%) Lupin 12% 23% (9%) Aurobindo Pharma 15% 8% 9% Cipla 22% 6% 3% Dr. Reddy’s Lab 5% -9% 1% Cadila Healthcare 11% 0% 24% Glenmark Pharma 17% 20% 0% Jubilant Lifesciences 1% 2% 26% Peers Average 11% 8% 5% PEL Overall Pharma business 16% 12% 11% Source : Companies reported numbers, Stock Exchange Filings
Piramal Enterprises Limited – Investor Presentation Page 69 Healthcare Insight & Analytics
Piramal Enterprises Limited – Investor Presentation Page 70
Healthcare Insight and Analytics: At A Glance
Historically viewed as a syndicated healthcare market research company, Decision Resources Group (DRG) has
transformed itself into a data-driven, technology enabled, healthcare insights business
• Where to invest?
We assist our clients in the Pharma, MedTech, Insurance
• How to get approved, contracted and paid?
(Payer), and Provider sectors, addressing many of the
most pressing questions in the healthcare industry: • How to prove value?
• How to drive commercial success?
• Market Research
We do this by leveraging a large team of area experts,
• Services
Real World Health Data, sophisticated analytics tools and
data science to deliver: • Data
• Analytics
• Embedded in our clients’ workflows
We are increasingly:
• Delivering critical client solutions, which have a bespoke front
end, but which are based upon a series of common back-end
algorithmsYou can also read
