Synopsis: A fresh investor presentation has put a number on what comes next for a Mumbai-based diversified NBFC: Rs.1.5 lakh crore in assets under management by March 2028, built on a retail book that already makes up 85 percent of the loan portfolio, with management guiding to 50 percent profit growth in FY27 even as AUM growth holds steady at 25 percent.
Shares of a diversified non-banking financial company came into focus this week after it released its investor presentation for the JM Financial India Finance Forum, laying out medium-term targets that go well beyond the year just closed. The company, formerly known as Piramal Capital & Housing Finance, has set its sights on nearly doubling its loan book over three years while pushing profitability metrics that had stayed muted through its post-merger transition.
With a market capitalisation of Rs. 45,727.69 crore, the shares of Piramal Finance Limited were trading at Rs. 2,017 per share, up 0.76 percent from its previous closing price of Rs. 2,001.80 apiece. It is trading at a P/E of 175.
FY28 Guidance
The headline number in the presentation is the Rs.1.5 lakh crore AUM target for March 2028, against Rs.1,01,230 crore as of March 2026. That implies the book needs to grow at roughly 20-25 percent annually for two more years, a pace the company has already demonstrated; AUM rose 25 percent year-on-year in FY26 alone. The more interesting shift is in how that growth gets funded. Higher leverage on a now-stabilised balance sheet means the company can expand its book without leaning as heavily on fresh equity, a meaningful change from the years immediately following the DHFL acquisition when capital adequacy concerns dominated investor conversations.
The growth target rests almost entirely on the retail franchise. Retail AUM has expanded from a mere 9 percent of the consolidated book in September 2021, right after the DHFL merger, to 85 percent now, spread across housing loans, loans against property, used car financing, personal loans and a newly launched gold loans business.
Management has guided to keeping retail share in the 80-85 percent band through FY27, with the wholesale book restricted to a granular, cash-flow backed “Wholesale 2.0” portfolio in real estate and corporate mid-market lending. The legacy DHFL-era stressed book, once the source of most of the company’s troubles, has shrunk to under 3 percent of total AUM and is expected to wind down further.
FY27 Profitability Targets
The more telling number for investors tracking the stock may not be the AUM target at all but the profit guidance. For FY27, the company has flagged roughly 25 percent AUM growth paired with around 50 percent growth in consolidated profit after tax. That gap between loan book expansion and earnings expansion signals continuing operating leverage: opex-to-AUM in the retail business has already fallen from 6.5 percent in Q4 FY23 to 3.6 percent in Q4 FY26, and management has guided to a further 25 basis point reduction over FY27-28. Return on average AUM for the growth business, which stood at 2.1 percent in the exit quarter of FY26, is targeted to reach approximately 2.5 percent by the exit quarter of FY27, en route to a longer-stated ambition of crossing 3 percent by March 2028.
Part of the profit acceleration also comes from a shrinking drag. The legacy book, which still consumed disproportionate provisioning relative to its size, is now small enough that its losses no longer meaningfully offset growth-business earnings, a dynamic that should make consolidated profit and growth-business profit converge further as FY27 progresses. Credit quality metrics across the retail book have also been steady, with 90-plus day delinquencies holding near 0.6 to 0.8 percent for three years running, lending some credibility to the idea that growth is not being purchased through looser underwriting.
Q4 and FY26 Results
The quarter and year just ended gave the company a clean base to build this guidance on. Consolidated AUM crossed Rs.1 lakh crore for the first time, up 25 percent year-on-year, while full-year profit after tax came in at Rs.1,506 crore, up 210 percent from Rs.485 crore in FY25. Q4 FY26 profit alone rose 390 percent year-on-year to Rs.502 crore. The company also picked up domestic rating upgrades to AA+ from Crisil, ICRA and Care during the quarter, alongside an international rating upgrade from S&P.
Business Overview
Piramal Finance Limited, part of the Ajay Piramal Group, is an upper-layer NBFC offering housing loans, loans against property, used car financing, personal and business loans, and corporate mid-market and real estate lending.
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