Skip to content

    PIRAMALFIN

    PIRAMALFIN
    Financial Services·27 Apr 2026
    Management Summary

    Piramal Finance delivered a strong Q4 and full year FY26, surpassing profit targets and achieving significant AUM growth, particularly in its retail segment. The company demonstrated robust asset quality, expanding NIM, and a strong capital position, while strategically utilizing one-time gains to strengthen its balance sheet. Management provided optimistic FY27 guidance for AUM and profit growth, emphasizing continued focus on operational efficiency and leveraging its upgraded AA+ credit rating.

    Highlights

    5

    • Total AUM grew 25% YoY and crossed the INR1 lakh crores mark, reaching INR1,01,230 crores.

    • FY26 Consolidated Net Profit was INR1,506 crores, a 3x increase YoY, exceeding the target of INR1,300-1,500 crores.

    • Retail business AUM grew 33% YoY to INR85,885 crores, now comprising 85% of total AUM, with retail opex ratios lowered and risk tightly controlled.

    • Consolidated Net Interest Margin (NIM) expanded 20 bps QoQ to 6.5%, driven by a decline in the cost of borrowing by 11 bps QoQ to 8.84%.

    • Asset quality remained robust with Growth business credit cost at 1.5% and total GNPA down 30 bps QoQ to 2.3%, while Wholesale 2.0 reported zero NPAs.

    Concerns

    2

    • Q4 FY26 fee income was low due to a one-time reversal for an associate company, though management expects it to be restored.

    • Geopolitical disruptions in the Gulf have created a volatile global macroeconomic environment, with potential impact on certain sensitive sectors, though currently contained.

    Key financials

    Metrics

    13

    Periods

    3

    Headline

    3
    • Total AUM
      ₹1.01L Cr
      YoY+25%
    • Net Worth
      ₹28,191 Cr
    • Cash and Cash Equivalents
      ₹8,640 Cr

    Q4 FY26

    9
    • Consolidated Net Profit
      ₹502 Cr
      YoY+3.9%
    • Growth Business RoAUM
      2.1%
    • Consolidated NIM
      6.5%
      QoQ+0.2%
    • Cost of Borrowing
      8.8%
      QoQ-0.1%
    • Growth Business Credit Cost
      1.5%
      QoQ-0.1%

    FY26

    1
    • Consolidated Net Profit
      ₹1,506 Cr
      YoY+2%

    Segment breakdown

    Share of Total AUMBook Size
    Retail Business85%—
    Wholesale 2.0 Business—₹12,538 Cr
    Legacy Book3%₹2,807 Cr
    Heatmap· 2 shared metrics

    Capital allocation

    3
    high confidence
    CategoryHeadline
    M&A

    Piramal Imaging

    divestment · closed · Consideration USD 148 million

    M&A

    Shriram Life Insurance

    divestment · closed · Consideration ₹600 crores

    Liquidity

    Cash ₹8,640 crores

    LCR in Q4 was 450%. CPs form less than 1% of liability stack, minimizing liquidity risk and maximizing opportunity from falling short-end rates.

    Guidance & targets

    10
    CategoryTargetPriority
    AUM
    Total AUM Growth
    ~25%
    		High
    AUM
    Total AUM
    INR1,50,000 crores
    		High
    Profitability
    Consolidated Profits Growth
    ~50%
    		High
    Profitability
    Exit FY27 RoAUM
    ~2.5%
    		High
    Leverage
    AUM to Equity Leverage
    4.5 to 5x
    		Medium
    Cost of Funds
    Cost of Borrowing Reduction from AA+ Rating
    50-80 bps
    		High
    Operating Efficiency
    Opex to Assets Ratio
    continue to fall
    		High
    Branch Network
    Gold Loan Branches
    ~200
    		High
    Portfolio Mix
    Unsecured AUM Share
    400-500 bps larger
    		Medium
    Taxation
    Effective Tax Rate
    very low
    		High

    Geopolitical impact on asset quality (bounce rates)

    Next quarter (Q1 FY27)
    CurrentBounce rates in April same as March.
    TargetContinued stability in bounce rates; no visible impact of conflict on retail risk metrics.

    Why it matters

    Geopolitical events are a key macro risk, and management indicated Q2 FY27 as a potential inflection point for impact. Monitoring bounce rates will be an early indicator.

    Overall, while geopolitical risks remain a key monitorable, India's macroeconomic stability, policy responsiveness, and domestic demand strength continues to support the growth outlook... We remain, however, watchful and ready to act as necessary.

    How to verify

    risks_and_concerns[risk='Geopolitical Disruptions']

    Risks & concerns

    3
    RiskSeverity

    Geopolitical Disruptions

    Volatile global macroeconomic environment, rising crude oil prices, and concerns about refined product availability due to Gulf disruptions, with potential impact on India's economy and financial services sector, though currently contained. — Management acknowledged

    medium

    Asset Quality in Specific Segments

    Elevated risk metrics in the semi-secured (used cars) business for three quarters, though a steep fall in Q4. Smaller ticket mortgages with MSME customers were flagged as potentially problematic. — Management acknowledged

    medium

    Volatility in Digital Lending

    Digital loans are faster to scale but tend to be more volatile, with management having cut volumes by over 60% during peak risk in FY25. — Management acknowledged

    low

    Q&A highlights

    7

    “Consol NIM and Growth NIM will become effectively the same, hopefully it was the latter half of this coming year as the Legacy book becomes smaller and smaller. And Growth NIM of course today is about 7%.”

    Clarifies the convergence of NIMs and the diminishing impact of the Legacy book, which is critical for future profitability.

    asked by Shreya Shivani (Nomura)

    3 min read7 chapters

    Detailed Narrative

    01

    Strong AUM Growth and Retail Dominance

    Piramal Finance achieved a total AUM of INR1,01,230 crores in FY26, marking a 25% year-on-year growth and crossing the INR1 lakh crore milestone. The retail business was a primary driver, growing 33% year-on-year to INR85,885 crores and now constituting 85% of the total AUM. This rapid scale-up, from INR20,000 crores to INR85,000 crores in four years, has been achieved while lowering opex ratios and maintaining tight risk control.

    02

    Robust Profitability and Asset Quality Improvement

    The company reported a consolidated net profit of INR1,506 crores for FY26, a 3x increase year-on-year, surpassing its target of INR1,300-1,500 crores. The Growth business RoAUM improved to 2.1% in Q4 FY26 from 1.7% in Q4 FY25. Asset quality remained strong, with retail 90+ delinquencies down 20 basis points quarter-on-quarter to 0.6% and Growth business credit cost at 1.5%. The Wholesale 2.0 book maintained zero NPAs.

    03

    Expanding Margins and Optimized Cost of Funds

    Consolidated Net Interest Margin (NIM) expanded by 20 basis points quarter-on-quarter to 6.5%, with the Growth book NIM at 7%. The cost of borrowing declined by 11 basis points quarter-on-quarter to 8.84%. Management expects the recent AA+ credit rating upgrade to further reduce the cost of borrowing by 50-80 basis points over the next three years as existing liabilities are churned, significantly contributing to future NIM expansion.

    04

    Strategic Balance Sheet Strengthening and Capital Position

    Piramal Finance proactively utilized one-time📎 gains from the sale of Piramal Imaging ($148 million) and Shriram Life Insurance (INR600 crores) to strengthen its balance sheet. This included taking write-downs and impairments of approximately INR900 crores and INR590 crores respectively, to pre-empt future losses and build conservatism. The company maintains a strong capital adequacy ratio of 19.8% as of March 2026, with a comfortable runway of 3-4 quarters for growth without immediate capital raising.

    05

    Operational Efficiency and AI Adoption

    Operational productivity has doubled in the last two years, with AUM doubling while staff headcount remained flat, showcasing significant efficiency gains. Retail opex to AUM further decreased by 21 basis points quarter-on-quarter to 3.6% per annum. The company is also aggressively adopting AI, with total token volume reaching 178 billion in Q4, indicating high levels of AI integration across sales, underwriting, collections, and operations.

    06

    Legacy Book Nearing Resolution

    The Legacy book was reduced by 59% year-on-year to INR2,807 crores, now representing less than 3% of the total AUM. Management expects this book to become "irrelevant" by the latter half of FY27, signaling the near completion of its run-down and a cleaner balance sheet going forward⏳. Potential write-backs of "a few hundred crores" from this book are also anticipated.

    07

    FY27 Outlook and Growth Drivers

    For FY27, Piramal Finance targets approximately 25% growth in total AUM and around 50% growth in consolidated profits, aiming for an exit FY27 RoAUM of 2.5%. Key growth drivers include continued expansion in retail (especially unsecured and gold loans), leveraging the AA+ rating for lower cost of funds, and further improvements in operational efficiency (opex to assets). The company plans to open 180 more gold loan branches in FY27, bringing the total to around 200.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.