IIFL Securities Stock Idea: Buy Piramal Enterprises with Target Rs 1010

Piramal Enterprises has been given a buy call by IIFL Securities, with a target price set at Rs 1010. At the time of the call, the stock's market price stood at Rs 973.25. This implies a potential upside of around 3.8%. The brokerage firm has cited the company's strong financial performance, expanding product portfolio, and focus on value-added businesses as reasons for its bullish stance.

About Piramal Enterprises:

Piramal Enterprises Limited (PEL) is a diversified financial services company listed on the National Stock Exchange (NSE). It operates across a range of businesses, including financial services, pharmaceuticals, healthcare information, and consumer products. The company's financial services arm, Piramal Capital & Housing Finance Ltd., is a leading player in the mortgage loan industry, providing home loans, loans against property, and other financing solutions. PEL's pharmaceutical arm, Piramal Pharma Solutions (PPS), is a global contract development and manufacturing organization (CDMO) offering end-to-end solutions for the pharmaceutical industry. The company's other businesses include Piramal Healthcare, which provides healthcare information and services, and Piramal Glass, which manufactures glass packaging products.

52 Week Price Trend:

Piramal Enterprises (PEL) is a diversified financial services company with a market capitalization of approximately Rs. 57,000 crores. As of Jul 12, 2023, PEL's stock price is Rs 973.25. It has a 52-week high of Rs 1140 and a 52-week low of Rs 630.2. PEL's stock has been on a downward trend in the past year, primarily due to concerns about its exposure to the troubled real estate sector. However, the company has taken steps to reduce its exposure to this sector and has also diversified its revenue streams. As a result, analysts believe that PEL's stock could be undervalued at current levels and could provide a good investment opportunity for long-term investors.

Stratzy's MOST Analysis:

Stratzy's MOST framework has assessed PEL as BB-, indicating moderate fundamental risks. This rating reflects a balance between the company's strengths and weaknesses. PEL has demonstrated solid management, a positive outlook, and a safe operating environment. However, it faces challenges in terms of its financial trend, which has been showing signs of deterioration. The overall BB- rating suggests that investors should exercise caution while investing in PEL, as there is a potential for downside risks due to its financial trajectory.

Company's Fundamentals:

Piramal Enterprises (NSE:PEL) is a diversified Indian conglomerate with interests in pharmaceuticals, financial services, and real estate. Its stock carries a Price-to-Earnings (PE) ratio of 13.5, indicating that investors are willing to pay 13.5 times the company's annual earnings for each share. The Price-to-Book (PB) ratio of 0.71 suggests that the market value of PEL's assets is 29% lower than its book value, potentially indicating a value investment opportunity. The company's Dividend Yield of 3.41% offers a steady stream of income for investors, making it attractive for those seeking both growth potential and dividend income.

Fundamental and Technical information provided in this blog were last updated on 16 Jul, 2024

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