Sidd Mehta presented his in-depth investment thesis on Piramal Enterprises (India: PEL) at Asian Investing Summit 2016.

Piramal Enterprises is a conglomerate run by one of India’s greatest capital allocators, Ajay Piramal. The company has roots in the pharma space, most of which (generics) was sold to Abbott Labs in 2009 for 9x revenue. Ajay Piramal has used the funds to build what Sidd believes is the Berkshire of India. The business has three verticals: information management, financial services, and healthcare. Piramal shares recently traded at 1.3x price-to- book. For a business that has compounded BV at 32% over 27 years, this appears cheap. The Indian financials universe trades at 2-5x book value. The Indian pharma universe trades at 4-8x book value. Conservatively, the information management business can be valued at 1.5-2x book value, though recent deal multiples suggest a much higher valuation. Sidd believes a 2-2.5x book value multiple is justified for the entire business, offering substantial upside.

About the instructor:

Siddharth Mehta founded Beaconsfield Investment Management in 2010. Prior to that he worked as an analyst covering Asian equities at Fairfax Financial Holdings and as an associate analyst at Credit Suisse equity research. Born and raised in Chennai, India, Siddharth completed his bachelor’s of science degree from Purdue University.

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