Piramal Finance Q1 FY27 Result: PAT up 67%, On-track FY27 Guidance

PAT growth of 50%, AUM growth of 25% in FY27. PIRAMALFIN on track to deliver FY27 guidance after Q1 FY27. Re-rating potential of multiples at current valuation

Jul 19, 2026

Stock Ideas at moneymuscle.in

1. Retail Focussed NBFC

piramalfinance.com | NSE: PIRAMALFIN

2. FY22-26: A period of transition

3. FY26: PAT up 210% & Net Interest Income up 32% YoY

4. Q1-27: PAT up 67% & Net Interest Income up 43% YoY

PAT down 8% & Net Interest Income up 6% QoQ

AUM grew by 25%
- Core growth business—which excludes the discontinued legacy book and now represents 98% of total AUM—increased by 32% year-on-year.

On the overall demand environment, yes, we are seeing strong demand, and that has resulted in a solid 25% growth at the consolidated level
Demand has remained positive across most categories, resulting in broad-based growth.
The first quarter surprised positively. Typically, first-quarter asset quality numbers tend to be weaker, but this year we did not see that seasonality. The numbers were actually quite strong across the board.

With El Nino, we will need to monitor customers whose incomes depend more on agriculture. The rains during the first few days of July have eased some of those concerns, but it is still something to watch.

5. Outlook: 25% AUM Growth; 50% PAT growth

5.1 Management Guidance and Outlook

Bottom-line growth driven by improving profitability

Confident in achieving its original FY2027 guidance for AUM growth, profit growth, and Return on AUM (ROAUM).
Aiming for a 2.5% ROAUM by Q4, up from 1.9% in Q1
- driven by operating leverage as the loan book grows against stabilised baseline staffing costs.
Retail opex to AUM ratio is expected to improve
- improvement of 40-50 basis points of value over the next 4-5 quarters.
Long-term leverage goal (AUM to equity) of 4.5x to 5x
- enabled by their domestic credit rating upgrade
- strategic shift towards lower-risk, larger-ticket lending.
Gold loans network rollout aims to reach 200 branches by the end of March 2027.
- To shift staffing models to reach 100% branch penetration for personal loans in the next two to three quarters.
Sourcing from cross-selling unsecured disbursements is expected to materially improve, bringing lower opex and credit costs.
- Digital loans business will remain agile — prepared to quickly scale down volumes if current historically low risk levels begin to rise.
Capital Raise and M&A: Approved an enabling resolution to raise up to ₹4,000 Cr to comfortably support growth requirements.
- Open to inorganic acquisitions if appropriate valuations arise — nothing is currently imminent

5.2 Q1 FY27 Performance vs FY27 Guidance

On-track — Sustained Delivery Required

AUM growth of 25% — same as guidance
- Growth in their continuing businesses reached 32% year-on-year in Q1
- AUM growth has sustained at these levels for several quarters
PAT growth of 67% is ahead of 50% growth guidance
- Required run-rate to achieve FY27 target is high
- Required quarterly run-rate for PAT the next 3 quarters is ~₹600 Cr vs the ₹461 Cr PAT delivered in Q1 FY27

6. Valuation Analysis

6.1 Valuation Snapshot — Piramal Finance

Current Market Price — ₹2,130
Market cap — ₹48,513 Cr
FY27 PAT = 1.5 X FY26 PAT
FY28 PAT =3% X average(FY26 AUM, FY27 AUM)

PIRAMALFIN trades at 1.6 P/B (×) on FY27 estimates.
For a company guiding to deliver 50% PAT growth with ROAUM closer to 2.5% — the P/B multiple provides an opportunity of re-rating closer to 2 P/B (×)

6.2 Opportunity at Current Valuation

Consistent Growth: Core business delivered a 32% year-on-year AUM growth — driven by 44% year-on-year surge in retail loan disbursements.
- Demand situation looks strong to the management
Credit Rating Upgrade Advantage: Domestic rating upgrade to AA+
- will lower the cost of borrowing — improve margins
- enable the company to increase its leverage while aggressively targeting larger-ticket, lower-risk borrowers — enable the growth ahead
“Hidden” Capital Reserve:
- The balance sheet contains roughly ₹9,000 Cr of embedded regulatory capital via deferred tax assets and legacy investments; this will naturally unlock over time, providing a substantial long-term safety net.
Flexibility for Expansion:
- Approved resolution to raise up to ₹4,000 Cr
- Openness to opportunistic mergers and acquisitions,
- PIRAMALFIN has the ammunition to sustain its growth into FY28.

Increased Profitability: RoA improving to 2.5% in FY27 to 3% by FY28 creates the opportunity as bottom-line grows faster than the top-line

Multiple Re-rating: Opportunity of being re-rated at around 2(×) P/B if FY27 guidance is delivered and PIRAMALFIN shows progress on executing FY28 guidance.

6.3 Risk at Current Valuation

Early signs of financial stress among salaried IT sector customers, specifically in Southern India.
- Stress is currently manifesting as higher bounce rates in secured loan products rather than unsecured ones.
Wholesale lending portfolio (which includes real estate and corporate mid-market lending) is experiencing highly elevated prepayment rates.
- In Q1, the company received 74% of its disbursed amounts back as repayments — 61% of all contractual repayments due for the entire FY2027 year have already been paid by borrowers.
- While this indicates robust asset quality and strong borrower cash flows, it acts as a severe headwind to actually growing the wholesale AUM.
Asset quality in the LAP segment saw a slight sequential deterioration in Q1, going back to Q3 levels.
- This uptick removed some of the comfort they had built up in the previous quarter, stating that their “seat belts are very much on” regarding LAP asset quality.
Sluggish organic demand in the small-ticket housing loan segment (under 35 lakhs).
- Forced to pivot its growth strategy toward larger-ticket sizes and mass-affluent home loans.
Piramal’s digital lending business—which is primarily embedded finance conducted through fintech partnerships—is highly cyclical and dependent on the overall health and activity of the fintech sector.
- Portfolio’s risk is currently at historic lows (allowing the company to operate at historically high volumes),
- Management warned that this is not a “steady as she comes” business.
- Volumes can move up or down quite meaningfully, and the company is prepared to aggressively cut back on this business if risk metrics begin to tick upward.