PEL - Piramal Enterp.

📊 NSE: PEL 🏢 Finance & Investments 📅 Last Updated: 12/14/2025 11:01

💰 Financial Performance

Revenue Growth by Segment

Interest income grew 24% YoY to INR 2,504 Cr in Q1 FY26. Fee and commission income increased 5% YoY to INR 114 Cr. Other income grew 36% YoY to INR 227 Cr. Total consolidated income for Q1 FY26 was INR 2,731 Cr.

Geographic Revenue Split

Not disclosed in available documents, though the company utilizes an established branch-led sourcing strategy for retail loans across India.

Profitability Margins

Net Interest Income (NII) grew 25% YoY to INR 1,010 Cr in Q1 FY26. Pre-provision operating profit (PPOP) rose 58% YoY to INR 425 Cr. Reported net profit after tax (PAT) grew 52% YoY to INR 276 Cr.

EBITDA Margin

PPOP margin (as a proxy for operating profitability) improved significantly, with PPOP growing 58% YoY compared to a 27% growth in total income (INR 1,237 Cr vs INR 973 Cr). Interest coverage ratio stood at 1.20x in Q1 FY26, up from 1.12x in FY25.

Capital Expenditure

Fixed assets were reported at INR 2,571 Cr as of June 2025. Specific future capital expenditure plans for physical infrastructure were not disclosed.

Credit Rating & Borrowing

Crisil and CareEdge have withdrawn ratings (previously Crisil A1+ for CP) following the merger into Piramal Finance Limited (PFL). Interest expense grew 24% YoY to INR 1,494 Cr in Q1 FY26, reflecting the cost of a gross debt of INR 65,484 Cr.

⚙️ Operational Drivers

Raw Materials

Capital/Borrowings are the primary 'raw materials': Term loans from banks (57.59% of liabilities), Commercial Paper (17.94%), and Non-Convertible Debentures (13.67%).

Import Sources

Domestic financial markets and banking institutions in India.

Key Suppliers

22 significant counterparties provide 79.62% of total liabilities (INR 6,968.28 Cr on a standalone basis). Specific bank names were not listed.

Capacity Expansion

Gross Assets Under Management (AUM) stood at INR 77,572 Cr in Q1 FY26, representing a 14% YoY growth from INR 68,053 Cr. The company is expanding its retail lending footprint through its branch-led strategy.

Raw Material Costs

Interest expense (cost of capital) was INR 1,494 Cr in Q1 FY26, representing 54.7% of total income. Procurement strategy focuses on a diversified liability franchise to maintain a positive ALM profile.

Manufacturing Efficiency

Operating expenses (Opex) grew 15% YoY to INR 812 Cr, slower than the 58% growth in PPOP, indicating improving operational leverage.

Logistics & Distribution

Branch-led sourcing strategy productivity is a key metric, though specific distribution costs as a % of revenue were not provided.

📈 Strategic Growth

Expected Growth Rate

14-24%

Growth Strategy

The company completed a reverse merger of PEL into Piramal Finance Limited (PFL) effective September 16, 2025, to simplify the group structure and provide direct access to the lending business. Growth is driven by a 'High Tech / High Touch' model, expanding retail products (home loans, used car loans), and leveraging strategic partnerships with CDPQ and Bain Capital (IndiaRF).

Products & Services

Retail loans (home loans, loans against property, used car loans, small business loans), wholesale loans (real estate and non-real estate), and alternative investment funds.

Brand Portfolio

Piramal Finance, Piramal Alternatives, IndiaRF, Pramerica Life Insurance.

New Products/Services

Focus on granular retail products like used car loans and small business loans to diversify the AUM from wholesale-heavy to a more balanced book.

Market Expansion

Expansion of the branch network to increase retail loan sourcing productivity across India.

Market Share & Ranking

Not disclosed.

Strategic Alliances

Joint ventures with Prudential International (Pramerica Life Insurance - 50% stake), Bain Capital (IndiaRF), and capital commitments from CDPQ and CPPIB.

🌍 External Factors

Industry Trends

The industry is shifting toward 'Scale Based Regulation' by the RBI. PEL is positioned as an Upper Layer NBFC, necessitating the corporate restructuring to PFL to meet listing and regulatory requirements.

Competitive Landscape

Competes with other large NBFCs and housing finance companies in the retail and wholesale lending space.

Competitive Moat

Durable advantages include a strong brand name (Piramal), strategic global partnerships (Bain, CDPQ), and a 'High Tech / High Touch' model that combines digital underwriting with physical branch presence.

Macro Economic Sensitivity

Highly sensitive to RBI interest rate cycles and credit demand in the real estate and retail sectors.

Consumer Behavior

Increasing demand for used car loans and small business loans is driving the shift toward retail lending.

Geopolitical Risks

Limited direct exposure, though global financial market volatility can impact the cost of capital from foreign partners like CDPQ and CPPIB.

⚖️ Regulatory & Governance

Industry Regulations

Subject to RBI Master Directions for NBFC - Scale Based Regulation. The merger with PFL was specifically executed to comply with RBI's regulatory framework for Upper Layer NBFCs.

Environmental Compliance

Not disclosed.

Taxation Policy Impact

Effective tax rate for Q1 FY26 was approximately 8.3% (INR 25 Cr tax on INR 301 Cr PBT).

Legal Contingencies

Gross Non-Performing Assets (NPA) stood at INR 325.03 Cr as of March 31, 2025. Specific values for pending litigation in High/Supreme courts were not provided.

⚠️ Risk Analysis

Key Uncertainties

Asset quality deterioration is a key risk, with Net NPA increasing from 0.80% in FY24 to 2.00% in Q1 FY26. Merger integration and the blackout period for security trading (40-45 days) pose short-term liquidity/market risks.