💰 Financial Performance

Revenue Growth by Segment

Total Assets Under Management (AUM) reached INR 91,447 Cr as of September 30, 2025 (Q2 FY26), representing a 27% annualized growth in H1 FY26. The Retail segment AUM grew to INR 74,704 Cr (82% of total), while the Wholesale 2.0 segment grew 43% YoY to INR 11,295 Cr (12% of total). The Legacy Wholesale 1.0 book was reduced to INR 5,448 Cr, now only 6% of total AUM compared to 45% in March 2023.

Geographic Revenue Split

Not specifically disclosed by region, but the company operates a network of 518 branches as of Q2 FY26, focusing on increasing product penetration within existing locations rather than aggressive geographic expansion (only 1 new branch added in H1 FY26).

Profitability Margins

Reported net profit for Q2 FY26 was INR 327 Cr, a 101% increase YoY from INR 163 Cr in Q2 FY25. The Return on AUM (RoAUM) for the growth business improved to 1.7% in Q2 FY26 from 1.5% in Q1 FY26 and 1.4% in FY25. This improvement is driven by controlled credit costs and optimized operating expenses.

EBITDA Margin

Pre-provision operating profit (PPOP) for Q2 FY26 stood at INR 515 Cr, up 30% YoY from INR 396 Cr. The Net Total Income margin for the growth business was 7.1% in Q2 FY26, slightly down from 8.2% in FY25 due to shifts in the portfolio mix toward more granular, lower-risk retail assets.

Capital Expenditure

Not disclosed in traditional industrial terms; however, the company maintains a strong net worth of INR 27,447 Cr as of September 30, 2025, with a Capital Adequacy Ratio of 20.7%, providing a significant buffer for future lending expansion.

Credit Rating & Borrowing

Crisil reaffirmed 'Crisil A1+' for the INR 12,000 Cr Commercial Paper program and assigned 'Crisil AA+/Stable' to long-term bank loans and NCDs. The average Cost of Borrowing (COB) was 8.93% in Q2 FY26, a reduction of 19 bps QoQ from 9.12%.

⚙️ Operational Drivers

Raw Materials

Capital/Debt Funds (the primary 'raw material' for lending) comprising Bank Loans (34%), NCDs (37%), ECBs (10%), Commercial Paper (10%), and Securitization (8%).

Import Sources

Global debt capital markets (raised USD 815 Mn via dollar bonds in 2025) and domestic Indian banking sector.

Key Suppliers

Diversified base including domestic banks, financial institutions, and global investors in debt capital markets.

Capacity Expansion

Current branch capacity is 518 branches. Expansion strategy has shifted from physical footprint growth (only 1 branch added in H1 FY26) to 'product penetration'—increasing the number of products (Housing, LAP, Used Car, Personal Loans) offered per branch.

Raw Material Costs

Interest expense as a percentage of AUM was 6.3% in Q2 FY26. The company successfully lowered its cost of borrowing to 8.93% by diversifying its liability profile and leveraging its improved credit standing.

Manufacturing Efficiency

Branch productivity is measured by vintage; branches older than 3 years achieve benchmark monthly disbursements of INR 7.1 Cr compared to INR 0.5 Cr for branches less than 6 months old.

Logistics & Distribution

Distribution is handled through 518 physical branches and digital finance channels; digital loans are a key part of the multi-product retail platform.

📈 Strategic Growth

Expected Growth Rate

25-26%

Growth Strategy

The company aims to double its AUM in approximately 3 years by focusing on 'Wholesale 2.0' (granular real estate and corporate mid-market loans) and a multi-product retail platform. Strategy includes increasing product penetration per branch (e.g., Personal Loans offered in 352 branches vs 127 in March 2023) and leveraging AI for risk management.

Products & Services

Home loans, Loans Against Property (LAP), Used car loans, MSME business loans, Salaried Personal Loans, Digital loans, Real Estate loans, and Corporate Mid-Market Loans (CMML).

Brand Portfolio

Piramal Finance (formerly Piramal Capital & Housing Finance Limited).

New Products/Services

Expansion of 'Wholesale 2.0' which now constitutes 12% of AUM with 0% Stage 3 assets; and increased focus on Used Car Loans and Salaried Personal Loans.

Market Expansion

Focusing on the 'Bharat' market (Tier 2 and 3 cities) through the existing 518-branch network and digital partnerships.

Market Share & Ranking

Leading diversified NBFC; first financial services company to resolve a major acquisition (DHFL) through the Insolvency and Bankruptcy Code (IBC).

Strategic Alliances

Strategic investment in Shriram Group (INR 1,700 Cr book value) and a 17.42% stake sale in Shriram Life Insurance for INR 600 Cr to Sanlam Emerging Markets.

🌍 External Factors

Industry Trends

The industry is shifting toward 'Upper Layer' NBFC regulations; Piramal transitioned from an HFC to an NBFC-ICC in April 2025 to gain broader lending flexibility.

Competitive Landscape

Competes with major banks and NBFCs like Bajaj Finance, HDFC Bank, and Shriram Finance in the retail and MSME segments.

Competitive Moat

Moat is built on a massive physical distribution reach (518 branches) and a proprietary data-led credit engine. The 'Wholesale 2.0' strategy provides a competitive edge in the under-served mid-market corporate segment.

Macro Economic Sensitivity

Highly sensitive to Indian interest rate cycles and real estate sector health, as 82% of AUM is retail-focused with a significant portion in housing and property-backed loans.

Consumer Behavior

Increasing demand for small-ticket digital personal loans and used car financing in Tier 2/3 cities is driving the 27% annualized AUM growth.

Geopolitical Risks

Limited direct exposure as operations are domestic, but global market volatility affects the pricing of External Commercial Borrowings (10% of liability mix).

⚖️ Regulatory & Governance

Industry Regulations

Transitioned to NBFC-ICC (Investment and Credit Company) status on April 4, 2025, following the surrender of the Housing Finance license to streamline operations under the NBFC-Upper Layer framework.

Environmental Compliance

Not a primary driver for financial services, though the Piramal Foundation actively engages in social development goals across 112 aspirational districts.

Taxation Policy Impact

Effective tax rate varies due to deferred tax assets; Q2 FY26 saw a tax credit/adjustment of INR 78 Cr, supporting the INR 327 Cr net profit.

Legal Contingencies

The company manages legacy issues from the DHFL acquisition; Stage 3 provisioning for the legacy wholesale book stands at 20% (INR 1,708 Cr total ECL provision) to cover potential legal and recovery risks.

⚠️ Risk Analysis

Key Uncertainties

Vulnerability in asset quality within the wholesale segment and the lack of seasoning in newly launched retail products (Used Car, Personal Loans) could lead to a spike in the 2.6% GNPA ratio.

Geographic Concentration Risk

Concentrated in India, with a focus on 518 branches across various states; specific state-wise revenue % not disclosed.

Third Party Dependencies

High dependency on banking partners for 34% of funding and global debt markets for 10% (ECBs).

Technology Obsolescence Risk

Mitigated by the 'Piramal.ai' initiative and the goal to become an AI-native company to stay ahead of fintech disruptors.

Credit & Counterparty Risk

Wholesale 1.0 (Legacy) remains a monitorable risk at 6% of AUM; however, Wholesale 2.0 (12% of AUM) has shown strong performance with negligible defaults to date.