Piramal Enterprises: Journey of Evolution, Led by Owner-Operator

Ankur Jain presented his in-depth investment thesis on Piramal Enterprises (NSE: PEL) at Asian Investing Summit 2017.

Piramal is an Indian conglomerate with interests across financial services, pharmaceuticals and information management. The group is led by Ajay Piramal, one of the best capital allocators across Indian businesses. The key differentiation is Piramal group’s laser focus on creating businesses that enjoy a lollapalooza of competitive advantages. Intellectual property, high margin potential, scale, and low cost of operations — that is the mesh on which the Piramal Group builds any business. With an impressive track record of mergers and acquisitions behind it, Piramal has created three valuable businesses within the company. The three businesses have reached critical mass and management intends to separate them at an opportune time to unlock value.

With a recent market cap of $4.8 billion, the equity trades at 24x FY17 expected EPS. Given the conglomerate structure, reported earnings do not yet reflect the full value of the company. Ankur estimates that based on a sum-of-the-parts valuation, Piramal trades at a discount of 30-35% to intrinsic value. With a long runway ahead for the underlying businesses, Ankur considers the shares a compelling investment.

Rohit Chauhan also presented on Piramal at Asian Investing Summit 2017.

About the instructor:

Ankur Jain learned value investing studying under Prof. Sanjay Bakshi. He further sharpened the investment skills working at his investment firm, Tactica Capital for ​eight years. At present, Ankur manages money for clients as an independent investment advisor. Ankur invests in businesses with reasonably strong entry barriers, run by simple and ethical managements and selling at a good margin of safety. He pays special emphasis on the differentiating aspects of the business (unique selling proposition) which are difficult to be replicated by others, runway ahead for the business, competitive intensity in the external environment, and trusteeship quality of the management.

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