Piramal eyes small stakes in top insurers

Piramal Healthcare, which is sitting on a cash pile after selling its generics product business to US-based Abbott Labs last year for about Rs17,190 crore, is looking at investment opportunities across various sectors.

“With the funds that we have today it is not possible to invest only in pharma. We will look at both pharma and non-pharma sectors,” chairman Ajay Piramal said while announcing the company's first quarter results.

Piramal said though insurance is not a preferred sector for investment in financial services segment, the company may look at minority stakes in top companies in the sector.

 “We may use some of the surplus funds to make opportunistic investments in top companies (insurers) where risk is minimal, and our investments will be for the short to medium term,” Piramal said.

He said the company would diversify into the non-pharma space and position itself as a growing conglomerate.

So will the Indian drug maker shed 'Healthcare' from its name in the future?

Piramal said that naming is an issue which the company has to think about, while pointing out regulatory challenges in renaming a company and registration of names.

After selling its unit to Abbott, Piramal had set up a non-banking financial services unit lending to real estate and the infrastructure sectors.

The NBFC will get an initial equity capital of Rs750 crore and the drug maker will be conservative when it comes to further developing the business, Piramal said.

The drug maker posted a net profit of Rs89.23 crore for the quarter ended June 30, 2011 as against Rs80.74 crore in the year-ago period.

Net sales stood at Rs440.98 crore for the quarter ended June 30, 2011. It was Rs842.21 crore for the corresponding last fiscal.

The results for the first quarter are not comparable over the previous quarter on account of sales in the domestic formulations business to Abbott and diagnostic services to Super Religare, Piramal Healthcare said.

Revenues from the pharma solutions business were up 40% at Rs207.5 crore.

The chairman expects the company's over-the-counter business to grow 45-50% in the current fiscal.