Synopsis:
Piramal Enterprises reported a 170.6 percent QoQ surge in net profit to Rs 276 crore and 18.7 percent YoY growth in revenue. Retail and wholesale AUMs expanded, margins improved, and credit costs declined. With the PEL-PFL merger on track and AI-driven efficiencies, the company is well-positioned for sustained future growth.
A financial services stock rose sharply after the company reported robust growth in profitability for the June quarter, led by a fall in credit costs and improved operating efficiency.
The company in focus is Piramal Enterprises Ltd, with a market capitalization of Rs 29,717.45 crore, opened at Rs 1,301.70 and touched an intraday high of Rs 1,355.30, compared to its previous close of Rs 1,295, marking an intraday gain of 4.7 percent.
What’s the News?
Quarter-on-quarter, revenue from operations declined by 7.4 percent from Rs 2,854 crore in Q4FY25 to Rs 2,643 crore in Q1FY26. Financing profit turned around from a loss of Rs 100 crore to a profit of Rs 229 crore.
Profit before tax surged 159.5 percent from Rs 116 crore to Rs 301 crore, while net profit rose 170.6 percent from Rs 102 crore to Rs 276 crore. Financing margin stood at 9 percent compared to negative 4 percent in the previous quarter.
Year-on-year, revenue from operations rose by 18.7 percent from Rs 2,227 crore in Q1FY25 to Rs 2,643 crore in Q1FY26. Financing profit declined from Rs 269 crore to Rs 229 crore. Profit before tax increased 21.4 percent from Rs 248 crore to Rs 301 crore, while net profit rose 52.5 percent from Rs 181 crore to Rs 276 crore.
Mrs. Upma Goel, the Chief Financial Officer and Key Managerial Personnel of the Company, has tendered her resignation on 28th July 2025 after serving for four years, expressing her intent to pursue aspirations outside the group.
Also Read: Stock in focus after it announces ₹580 Cr investment in Bengaluru for expansion
Comments from Management
Commenting on the performance, Ajay Piramal, Chairman, Piramal Enterprises Ltd said: “FY26 has commenced on a strong note with profitable growth and disciplined execution. Our diversified lending model continues to scale efficiently – driven by robust asset quality, improved operating leverage, and deeper integration of technology and AI across platforms.
The impending merger of our lending entities will further streamline operations, unlock synergies, and sharpen our strategic focus. We also have meaningful embedded value in our balance sheet— through Shriram investments, AIF recoveries and deferred transaction proceeds – and remain focused on timely, value-accretive monetization of these assets.
With a strong foundation, clear strategic priorities, and continued operational momentum, we are well-positioned to drive sustainable growth and long-term value creation as a future-ready financial services institution.”
Operational Highlights
The company’s total Assets Under Management (AUM) rose 22 percent YoY to Rs 85,756 crore. Growth AUM grew 38 percent YoY to Rs 79,430 crore and now constitutes 93 percent of the total book, while legacy AUM declined 51 percent YoY to Rs 6,327 crore.
Retail AUM grew by 37 percent YoY to Rs 69,005 crore and forms 80 percent of the total AUM. Net Interest Margin (NIM) expanded by 10 basis points sequentially to 5.9 percent. Gross NPA stood at 2.8 percent while Net NPA was at 2.0 percent. Credit cost in the growth business fell to 1.4 percent from 1.8 percent in Q4FY25. The merger of PEL and PFL is likely to be completed by September 2025.
Retail Lending disbursements grew 28 percent YoY to Rs 8,718 crore in Q1FY26, with mortgage disbursements rising 50 percent YoY to Rs 5,033 crore. Mortgage AUM now stands at Rs 47,101 crore, making up 68 percent of retail and 55 percent of total AUM.
The opex-to-AUM ratio declined by 230 basis points over the last nine quarters to 4.2 percent. The retail customer base expanded 21 percent YoY to 4.8 million customers across 517 branches in 428 cities.
Wholesale 2.0 AUM rose 47 percent YoY to Rs 10,425 crore. Disbursements in this segment rose 46 percent YoY to Rs 2,302 crore. Pre-payments and repayments during the quarter amounted to Rs 999 crore. The segment maintained an effective interest rate of 14.5 percent and average ticket size of Rs 74 crore.
Average borrowing cost stood at 9.12 percent and has started to ease. The company continued to diversify its funding base through securitization and international borrowings. The fixed-to-floating debt mix improved to 54:46, and the Asset-Liability Management (ALM) profile remained positive across all buckets.
About the Company
Piramal Enterprises Ltd. (“PEL”) is a diversified NBFC registered with the RBI, operating across retail lending, wholesale lending, and fund-based platforms. The company manages assets worth approximately $10 billion and leverages a technology platform powered by AI. PEL focuses on underserved ‘Bharat’ markets with offerings such as home loans, used car finance, small business loans, and LAP.
In wholesale lending, it caters to real estate developers and select corporations. Its fund management business includes partnerships with global institutions such as CDPQ and Bain Capital. PEL also holds a 50 percent stake in Pramerica Life Insurance.
Witten By Manan Gangwar
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