Ajay Piramal: Growing Inorganically

Ajay Piramal took over the reins of the Piramal Group in the early 1980s. The initial journey wasn’t an easy one as he lost his father first and then his brother within a short span of time. In fact, Piramal reminiscing his early days during the Oxford India Speaker Series, was quoted saying: “That’s when I was saddled with this”.

What began as a family textile business back then has evolved into a conglomerate today that has interests in diverse sectors such as pharmaceutical, healthcare, financial services and real estate, among others. It sure reflects on Piramal’s vision, grit and determination.

Piramal Group, today valued at over $10 billion, has offices in 30 countries such as the US, the UK, the European Union, Japan, Asia-Pacific and South Asia, with a brand presence in over 100 global markets. That is not all. It has a team of over 10,000 people from 21 diverse nationalities. Its flagship company, Piramal Enterprises, generates more than 51 per cent of its revenues from the international markets.

In a letter addressed to shareholders in the latest annual report of Piramal Enterprises, Piramal says, “Over the past 29 years, since the acquisition of Nicholas Laboratories, we have delivered annualised shareholder returns of 30 per cent, a milestone very few Indian companies have achieved.”

Piramal acquired the Australian MNC in 1988 when the latter was exiting India. That’s the when Piramal forayed into the pharmaceuticals sector. “At that time, many multinationals were leaving India, so we slowly acquired them all,” he was quoted as saying in a  leading financial daily. Since then, the group has completed around 50 acquisitions to expand its presence in the overseas market.  Going forward, the company has the same strategy for growth and is open to for inorganic opportunities both in India and abroad.

In 2016-2017 fiscal, revenue for Piramal Enterprises was 34 per cent higher at Rs  8,547 crore. Its net profits increased by 38.4 per cent to Rs 1,252 crore for the year. “Consistent improvement in our performance is a clear reflection of the strength in our businesses and the focus on execution of our long-term growth plans,” says Piramal, adding the company announced a dividend of Rs 21 per share for the year.

To breakdown the numbers further, its financial services segment delivered robust growth during the year. Its loan book grew 87 per cent to Rs 24,975 crore, that can be attributed to the consistent expansion of its product portfolio. During the year, it started providing construction finance and lease rental discounting in commercial space. On the other hand, the pharma businesses delivered significant year-on-year growth. After the Abbott deal that was clinched in 2010, Piramal Group’s pharma business has grown at a CAGR of 17 per cent.

During the year, it added two niche differentiated product portfolios in its global pharma products business. “We acquired a portfolio of five branded products in the injectable anaesthesia and pain management area,” says Piramal. Going forward, the company will continue to work towards adding more products to better leverage its global distribution network.

Piramal wears several hats. He serves on the Boards of several regulatory, professional and academic institutions. For instance, he is on the Harvard Business School’s Board of Dean’s Advisors. More recently, he was roped in as the Non-Executive Director at Tata Sons. There is more to the list.  In his leisure time, Piramal likes to indulge in his passion for wildlife photography.