Detailed Narrative
Retail Growth Engine Sustains Momentum
Retail AUM grew 37% YoY to ₹47,101 crores, driven by the flagship mortgage business which now accounts for 68% of retail AUM. Disbursements reached ₹8,718 crores, up 28% YoY, despite seasonal weakness typically seen in the first quarter. Management attributed this outperformance to their 'multi-product strategy' and focus on middle-tier markets where competition is less intense than at the top or bottom ends.
Proactive Risk Management in Unsecured Segments
Management highlighted a deliberate slowdown in MSME unsecured lending, with quarterly disbursements dropping from ₹1,200 crores to ₹700 crores over the last three quarters. This was a response to deteriorating credit trends in open-market sourcing, whereas cross-sell MSME business continues to perform well. Similarly, they identified stress in the used car refinance segment and are monitoring it closely, while maintaining a 'neutral' stance on digital loans backed by FLDG protection.
Wholesale 2.0: A Clean Slate Scaling Up
The Wholesale 2.0 portfolio grew 14% QoQ to ₹10,425 crores, maintaining its track record of zero delinquencies since inception. Disbursements for the quarter were ₹2,302 crores, a 35% increase QoQ, with an average ticket size of ₹74 crores. The book is well-diversified across real estate (70-75%) and corporate mid-market lending, featuring an effective interest rate of 14.5%.
Operational Efficiency and NIM Expansion
Consolidated NIM improved by 10 bps QoQ to 5.9%, aided by the reducing drag of the legacy business. Opex to AUM for the growth business moderated to 3.9% from 4.5% a year ago, reflecting the maturing branch network and investments in technology/AI. Management expects further efficiency gains, targeting a medium-term retail opex ratio of 3.5% to 4%.
Strategic Merger and Capital Re-alignment
The merger of Piramal Enterprises with Piramal Finance is on track for completion by September 2025. This corporate simplification is expected to reverse approximately 245 basis points of the recent capital adequacy reduction (currently at 19.3%). Post-merger, the company will also benefit from significant carry-forward tax losses, which will align PBT and PAT figures for the foreseeable future.