Piramal Finance Q2 profit up 67% as retail loans lift assets past Rs 1.13 lakh crore

Piramal Finance, which earns mainly from interest and fees on home loans, used-car loans, property-backed loans and small business loans across India, filed its Q2 and H1 FY27 results presentation on 19 October 2026 for the quarter ended 30 September 2026 . Profit after tax, or PAT, rose 67% to Rs 545 crore as total assets under management grew 24% to Rs 1,13,112 crore, with retail at 86% of assets, margins higher and cost ratios lower while loan stress stayed stable .

Profit rose because income grew much faster than costs

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Growth-business profit before tax on a pro forma basis, which covers continuing retail and wholesale and excludes the discontinued legacy book, was Rs 538 crore in Q2 FY27, up 57% year on year . On a consolidated basis, H1 FY27 profit after tax was Rs 1,006 crore, up 67% from Rs 603 crore in H1 FY26, on H1 total income of Rs 3,455 crore, up 35% year on year .

The lift came from operating leverage. In Q2 FY27 operating expenses grew 13% year on year while total income grew 33%, so pre-provision profit grew 64% . In H1 the gap was wider, with expenses up 11% and pre-provision profit up 75% . Net income margin, which the company defines as lending-book total income as a share of average total assets under management, was 6.5% in Q2 FY27, up 35 basis points year on year and stable quarter on quarter . Company cost-to-income was 52.1% versus 61.2% a year earlier . The quarter before showed the same pattern, with margin at 6.5% and cost-to-income at about 53% .

Retail loans now form almost the entire book

Sources: Q1 FY27 — ; Q2 FY27 — .

Total assets under management means on-book loans plus off-book assets. Growth assets, which exclude legacy, were up 30% year on year and are now 98.5% of the total . Retail was up 30% year on year and wholesale was up 24% year on year, while legacy fell 32% quarter on quarter and 69% year on year to 1.5% of the total . The retail to wholesale mix is now 86:14 versus 82:18 in September 2025 .

Mortgages anchor the book at lower yields

Mortgages of home loans plus loans against property were Rs 64,650 crore in Q2 FY27, up 27% year on year and 66% of retail assets . The network reached 838 branches in 621 cities across 25 states . Management said mass-affluent home loans and larger-ticket LAP Plus grew faster in recent quarters and should keep momentum after the domestic rating upgrade .

Personal and digital loans grew faster than mortgages

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Overall retail yield excluding fees was 13.6% and steady quarter on quarter, with weighted disbursement yield at 14.2% . Salaried personal loan assets under management reached Rs 9,179 crore, up 43% year on year, digital loans reached Rs 6,299 crore, up 84%, and unsecured business loans reached Rs 6,523 crore, up 17% . Rural micro loans were Rs 1,762 crore and gold loans were Rs 65 crore from 100 branches . Total retail disbursements were Rs 14,186 crore versus Rs 10,619 crore a year earlier, with 30% of unsecured disbursements through cross-sell to existing customers .

Wholesale stays granular while legacy fades from view

Wholesale loans from FY22 onward were Rs 13,978 crore with real estate and corporate mid-market loans in a 68:32 mix, average ticket of Rs 55 crore and portfolio yield of 14.1% in Q2 FY27 . Disbursements were Rs 2,615 crore, up 28% year on year, while repayments were Rs 1,889 crore at 72% of disbursements, including Rs 793 crore of prepayments . Management describes strong prepayments as a headwind to net growth but a sign borrowers are paying ahead of plan . Legacy fell by Rs 1,134 crore in H1 FY27 with no profit impact, has Rs 459 crore of provisions left, and separate disclosure may stop after the December 2026 quarter .

Borrowing got cheaper and liquidity stayed well above rules

Borrowings were Rs 85,802 crore in September 2026, up 20% year on year, with net worth of Rs 31,180 crore and debt to equity of 2.8 times . Fixed-rate borrowings were 39%, with the rest linked to bank lending rates or market rates, and funding spread across banks, mutual funds, overseas borrowings and securitisation .

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New long-term borrowing in H1 FY27 cost 8.46% versus 8.67% in H2 FY26, below maturing debt at about 9.08% in H2 FY27 and 9.07% in FY28 . Management links the fall to upgrades to AA-plus Stable by domestic agencies in early 2026 . Liquidity coverage was 553% at end-September versus 928% in March and 702% a year earlier, against 100% required, with average coverage of 442% in the quarter . Cash and equivalents were Rs 6,899 crore, or 6% of assets, and asset-liability gaps were positive in every time bucket . The quarter also included a total capital raise of Rs 3,850 crore through a Rs 2,100 crore share sale and Rs 1,750 crore of warrants to the promoter group .

Loan stress stayed in a narrow range

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Gross bad loans improved from a year earlier and were stable quarter on quarter, while net bad loans were 1.7% in September 2026 versus 1.8% a year earlier . The company’s retail 90+ DPD measure covers loans 90–180 days past due as a share of AUM in the 0–180-day bucket. This ratio was 0.7% and was described as stable over four years . Wholesale stage 2 plus stage 3 assets were below 0.1% . Growth-business credit cost, or provisions as a share of average assets, was stable at 1.5% . By product, the same delinquency measure for used-car loans eased to 1.2% from 1.4% a year earlier and digital loans eased to 0.9% from 1.5%, while unsecured business loans were at 1.1% .

Cost ratios fell alongside branch maturation and greater AI use

Retail operating cost to assets was 3.48% in Q2 FY27, down 41 basis points year on year, within the revised long-range goal of 3.25%–3.75% . The presentation traces a fall from 6.5% in Q4 FY23 through about 4.9% to 4.3% in FY25 and 4.2% to 3.6% in FY26 before 3.54% in Q1 FY27 . Growth-business cost-to-income fell to 48% from 52% a year earlier .

Income grew faster than operating expenses, while the retail 90+ DPD ratio stayed at 0.7% . The company’s benchmark monthly disbursement for branch-led products rises with branch vintage, from Rs 0.5 crore per branch under six months old to Rs 9.0 crore for branches aged five to six years, and more products are offered per urban branch than in March 2023 . Disbursement per branch on a trailing basis was Rs 93 crore versus Rs 80 crore a year earlier and per employee was Rs 3.0 crore versus Rs 2.7 crore . Generative AI use rose more than five times in a year, with 57% of code now written by AI, alongside customer base up 26% to 65.00 lakh and 30% of unsecured disbursements through cross-sell .

Targets call for steady asset growth and higher exit returns

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Growth-business annualised return on average AUM, or profit as a share of average assets under management, was 2.0% in Q2 FY27 versus 1.7% a year earlier . Leverage of assets to equity was 3.6 times versus 3.7 times in Q1 FY27 and 3.3 times a year earlier . The August 2023 long-range goals are Rs 1.5 lakh crore of assets by March 2028, return above 3% and leverage of 4.5 to 5.0 times . In Q1 FY27 management noted Q1 is the seasonal low and Q4 the high and stayed confident of meeting FY27 guidance on assets, profit and exit return after starting at 1.9% .

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Sources

1. 1 Investor Presentation on the Financial Results for the quarter and half year ended 30th September 2026
2. 2 Earnings-call transcript, 2026-07-22