Key Financial Metrics Signal Robust Recovery (Image Credits: Pixabay)
Mumbai’s Piramal Finance Ltd closed the December quarter with a striking turnaround in profitability, as its profit after tax reached ₹401 crore. This figure represented a 940 percent jump from ₹39 crore in the same period a year earlier, alongside a 23 percent sequential increase from the prior quarter.[1][2] The results highlighted the company’s shift toward a growth-oriented portfolio, now dominated by retail lending, amid broader efforts to strengthen its balance sheet and expand market reach.
Key Financial Metrics Signal Robust Recovery
Total assets under management climbed to ₹96,690 crore by the quarter’s end, reflecting 23 percent growth year-over-year and six percent from the previous quarter.[1] Net interest income rose 31 percent annually to ₹1,227 crore, supported by a net interest margin expansion to 6.3 percent, up 51 basis points from last year.
Pre-provision operating profit increased 84 percent to ₹659 crore, while loan loss provisions grew 36 percent to ₹370 crore. For the nine months of FY26, consolidated profit after tax stood at ₹1,004 crore, a 162 percent improvement over the prior year.[1]
- Profit after tax (PAT): ₹401 crore (+940% YoY, +23% QoQ)
- AUM: ₹96,690 crore (+23% YoY)
- Growth AUM: ₹91,460 crore (95% of total, +34% YoY)
- Net interest income: ₹1,227 crore (+31% YoY)
- Net interest margin: 6.3% (+51 bps YoY)
Retail Lending Fuels Expansion
Retail assets under management reached ₹79,413 crore, accounting for 82 percent of the total portfolio and growing 34 percent year-over-year. Mortgage lending, which forms 68 percent of retail AUM, expanded 35 percent to ₹53,958 crore.[1] Disbursements in retail hit ₹10,498 crore, up 26 percent from the previous year, with yields holding steady at 14.4 percent.
The customer base grew to 5.4 million, a 22 percent increase, supported by 518 branches across 429 cities in 26 states. Wholesale lending under the “Wholesale 2.0” segment also advanced, with AUM at ₹12,047 crore, up 35 percent annually. Repayments in this area covered 66 percent of disbursements, indicating disciplined portfolio management.[2]
Margin Expansion and Cost Discipline Drive Profitability
The quarter’s profit surge stemmed from higher AUM, wider margins, controlled operating expenses, and moderated credit costs, according to management. Operating expenses rose only four percent year-over-year to ₹821 crore, with retail opex-to-AUM improving to 3.8 percent, down 270 basis points over 11 quarters.[3]
Return on assets under management in the growth business improved to 1.9 percent, up 62 basis points annually. Credit costs for the growth portfolio eased to 1.6 percent, a 10 basis point drop sequentially. Other income contributed ₹252 crore, up 23 percent, including associate income that jumped significantly.[4] These factors combined without reliance on major one-off gains, underscoring operational strength.
Anand Piramal, Chairman, noted, “Our consolidated PAT stood at over ₹1,000 Cr [for 9M FY26], driven by better margins, stable asset quality and operating leverage, without any major one-off gains.”[1]
Asset Quality Remains Steady Amid Growth
Gross non-performing assets stood at 2.6 percent, with net NPAs at 1.9 percent. In retail, delinquencies over 90 days remained stable at 0.8 percent, consistent with historical ranges.[2] Management highlighted improvements in unsecured portfolios and microfinance, while monitoring segments like used car loans and low-ticket loans against assets.
Liquidity buffered the balance sheet at ₹7,504 crore, or seven percent of total assets, with net worth at ₹27,872 crore. The CRISIL AA+ rating for long-term debt and $350 million in development finance institution funding from IFC and ADB further bolstered funding diversity.
Outlook Points to Sustained Momentum
Piramal Finance affirmed its FY26 guidance, targeting AUM exceeding ₹1 lakh crore by year-end and ₹1.5 lakh crore by FY28. Medium-term goals include three percent return on AUM and opex-to-AUM of 3.25-3.75 percent.[2]
Jairam Sridharan, MD and CEO, emphasized further margin gains from lower borrowing costs post-rating upgrade and multilateral funding. Plans include opening around 100 branches in Q4 and leveraging AI for collections and customer service. A stake sale in Shriram Life Insurance for ₹600 crore, set for Q4 closure, will enhance capital flexibility.
Stakeholders, from retail borrowers gaining broader credit access to investors eyeing predictable earnings, stand to benefit as the company balances expansion with risk control. This quarter’s performance positions Piramal Finance for continued leadership in India’s NBFC space, reflecting resilience in a competitive lending landscape.
