14 November 2018 Within a year of launch, PIEL has scaled up its loan book to INR23b, i.e. 4% of total loans. There would be some margin impact on the overall book due to the rising share of home loans. Over the past four quarters, net interest margin for the lending business has declined by 100+bp to 6.9% as the competitive environment has heated up. With the competitive scenario now benign, price wars in the wholesale finance segment have abated. However, Piramal Enterprises PIEL has the distinction of being one of the few companies in India to generate 25%+ book value CAGR over the past 25+ years. We believe the company has the DNA to incubate and grow businesses in niche segments. With a large product suite, huge growth opportunity and a focused team, the overall financial services business will continue to grow at a robust pace and generate 20%+ RoE, in our view.