Financial Performance
Operating revenue for the fiscal year reached ₹11,852.49 crore, marking a 42.18% annual growth. The company’s consolidated Net Interest Margin (NIM) improved to 6.5%, while the retail opex-to-AUM ratio declined to 3.6%, demonstrating improved operational efficiency through scale. The quarterly performance was equally robust, with net profit for the final quarter growing 25.18% sequentially to ₹500.94 crore.
These results were supported by a diverse funding base, including recently secured $350 million in DFI funding, which helped maintain a stable debt-to-equity ratio of 2.8x while funding the expansion of the retail portfolio.
Management Outlook
Management expressed high confidence in achieving a target AUM of ₹1.5 lakh crore by FY28. For the upcoming fiscal year, the company has set aggressive targets including approximately 25% AUM growth and 50% profit growth. The leadership aims for an exit Return on Assets (RoAUM) of 2.5% by FY27.
Strategic focus remains on an AI-native approach, with management noting that 59% of the company's code is now written by AI to drive tech-led lending efficiencies. This technological integration is expected to further lower operating costs as the retail segment continues to mature and scale across diverse product lines.
Business Overview
Piramal Finance Limited has transitioned from a legacy wholesale lender to a retail-heavy financial institution. The company offers a wide range of retail products including housing loans, loans against property, used car financing, and small business loans. With a current market capitalization of ₹43,329.44 crore, it operates with a Mid-range Performer classification according to Trendlyne DVM scores.
Institutional holding remains strong at 33.43%, reflecting investor confidence in the business model transition. The growth AUM segment, specifically, witnessed a 33% year-on-year increase, driven by significant demand in the mortgage and retail lending space.
Sector Dynamics
The Indian banking and finance sector has seen varying growth rates, with Piramal Finance's 42% annual revenue growth significantly outperforming the broader sector's quarterly revenue growth of 4.47%. The company is capitalizing on the strong demand for retail credit in Tier 2 and Tier 3 cities across India. Management highlighted that mortgage AUM grew by 32% year-on-year, indicating robust underlying housing demand.
The ongoing shift towards diversified retail portfolios across the NBFC industry is helping major players mitigate risks traditionally associated with wholesale exposure while improving the overall Return on Assets profile.
What to Watch
- Progress toward the FY28 milestone of ₹1.5 lakh crore in total Assets Under Management.
- Maintenance of the 0.6% retail 90+ DPD levels during rapid credit expansion cycles.
- The impact of the AI-native coding strategy on further reducing the opex-to-AUM ratio below current levels.
- Achievement of the 2.5% exit Return on Assets (RoAUM) target set for the FY27 fiscal year.
- Regulatory environment changes that could impact the unsecured retail lending segments.
