Financial Performance
Piramal Finance delivered robust financial results for the fiscal year ending March 2026, characterized by significant bottom-line expansion. The consolidated PAT of ₹1,506 crore represents a 210% increase compared to the previous year, surpassing the management's earlier guidance range of ₹1,300-1,500 crore. Total income for the year stood at ₹5,601 crore, up 22% year-on-year.
For the final quarter of FY26, the company reported a net profit of ₹500.94 crore, a 389% increase over the same period last year, while quarterly operating revenue grew by nearly 20% to ₹3,424 crore. Consolidated Net Interest Margins (NIM) remained healthy, improving to 6.5% in Q4 FY26.
Management Outlook
The leadership team expressed strong confidence in the company's long-term growth trajectory, aiming to reach an AUM of ₹1.5 lakh crore by March 2028. For the upcoming fiscal year (FY27), the management has set a target of 25% AUM growth and approximately 50% profit growth. The strategy remains focused on scaling the retail franchise, which saw disbursements grow by 34% YoY in the recent quarter.
Additionally, the company intends to further leverage its AI-native infrastructure to drive operational efficiencies and customer acquisition, which currently stands at 5.7 million users.
Business Overview and Innovation
- Retail AUM grew to 85% of total mix, completing a multi-year transition from wholesale lending.
- Wholesale 2.0 AUM grew 38% YoY, focusing on granular and high-quality corporate exposures.
- The customer base expanded by 22% YoY, reaching a total of 5.7 million customers.
- Technology integration remains a core pillar, with over half of the new system code being written by AI to accelerate product launches.
- Phase 1 of the gold loan business is underway, marking an entry into high-yield secured retail segments.
- Legacy AUM has been successfully contained and now represents less than 3% of the total portfolio.
Sector Dynamics and Risks
The company operates within a competitive NBFC landscape where credit quality and borrowing costs are paramount. Piramal Finance received credit rating upgrades from CARE, ICRA, S&P, and Moody's during the period, reflecting its improved balance sheet strength and diversified funding mix. Total borrowings stood at ₹79,945 crore with a Debt-to-Equity ratio of 2.8x.
While the growth trajectory is strong, management remains watchful of credit costs in specific high-yield segments, such as rural micro-loans, where the 90+ DPD (Days Past Due) currently stands at 0.9%.
Executive Commentary
Successfully transitioned to 85% retail-led AUM mix. Management explicitly confirmed meeting all FY26 targets.
What to Watch
- Progress toward the ₹1.5 lakh crore AUM target by March 2028.
- Scalability and asset quality of the newly launched Gold Loans business.
- The impact of the AI-native pivot on further reducing the opex-to-AUM ratio.
- Movement in credit costs within the high-yield rural micro-loan portfolio.
