Rohit Chauhan presented his in-depth investment thesis on Piramal Enterprises (NSE: PEL) at Asian Investing Summit 2017.
Piramal Enterprises is an external growth story with a great capital allocator. CEO Ajay Piramal is very disciplined in terms of acquisitions and leveraging the growth opportunities in the Indian economy. The “outsider” CEO has built the company over the last 28 years and delivered a return of 28% CAGR over this period via growth, acquisitions, and strategic sale of businesses.
ROCE of 10% understates the underlying profitability due to ongoing investments in acquired businesses and under-accounting of income in strategic investments. The company continues to grow strongly, and the shares trade at ~25x suppressed earnings. Rohit estimates normalized earnings power at roughly twice recent earnings. He expects value to be unlocked via a demerger of the various businesses over the medium term.
Ankur Jain also presented on Piramal at Asian Investing Summit 2017.
About the instructor:
Rohit Chauhan is an Engineer / MBA with 20+ years of experience, working in different functions in large corporations in India and abroad. Rohit was introduced to the value investing philosophy in the mid 90s and has since then followed the philosophy in managing money for himself and others who have entrusted their capital to him. Rohit has been writing on the topic of investing for more than a decade via his blog.
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Interested in further insights into Piramal Enterprises? Access Ankur Jain’s session, also at Asian Investing Summit 2017.