Be prepared for one or two major shocks in NBFC sector: Piramal

Only a few strong players will succeed, says PEL chairman

January 28, 2019 10:42 pm | Updated 10:42 pm IST - MUMBAI

The liquidity problem among NBFCs is expected to continue for some time and there could be one or two major shocks in the financial services sector in the coming months, Ajay Piramal, chairman, Piramal Enterprises Ltd. (PEL), said on Monday.

“One should be ready for one or two major shocks in the financial services sector as our system is fragile,” Mr. Piramal said in response to a question.

“In August, I had said that there could be a shake up in the financial services sector and it will turn systemic. So, we had taken corrective steps and added to the equity,” he said.

“Our group’s credibility, robust track record and balance sheet strength enabled us to get enough liquidity from banks and mutual funds, despite tightened liquidity for the sector over the last few months,” he added.

Mr. Piramal said like the real estate sector, the NBFC sector was also heading for consolidation and only very few, strong players would survive.

“The marginal ones will close down in the medium term. And companies with strong track record will survive,” he added.

PEL on Monday reported a 23% growth in third quarter net profit to ₹603 crore compared with ₹490 crore in the year-earlier period.

“We continue to consistently deliver strong performance during the quarter, despite volatile business environment. For Q3 FY2019, PEL’s revenues grew by 22% to ₹3,489 crore and net profit grew by 23% to ₹603 crore, led by growth across financial services and pharma businesses,” Mr. Piramal said.

“We grew our overall loan book by 45% for the quarter to ₹55,255 crore. Leveraging the opportunity, our housing finance business reported a strong loan book growth of 69% QoQ to ₹3,920 crore. The financial services business reported Gross NPA of 0.5%,” he added.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.