Piramal Finance shares jump 11% after strong Q4; stock has no 'sell' ratings

Shares of Piramal Finance Ltd. are trading over 11% higher on Tuesday, April 28, after the non-banking financial company (NBFC) reported a strong Q4FY26 performance, marked by robust growth, a cleaner balance sheet and an upbeat outlook.

Brokerage firm Nomura has maintained its ‘buy’ rating on the stock with a price target of ₹2,150.

It mentioned the company’s steady progress in reducing its legacy book while scaling up growth, and expects loan growth of around 25% in FY27.

The brokerage also sees return on average assets under management (RoAUM) reaching 2.5% by Q4FY27 and over 3% by FY28.

Nomura said that the March quarter saw continued reduction in legacy assets, along with one-off gains and a marginal beat on net interest income (NII).

It also pointed to multiple levers for margin expansion, including a higher share of unsecured loans, growth in gold loans and a declining cost of funds.

Jefferies has a ‘hold’ rating with a price target of ₹1,940. The brokerage expects profitability and returns to improve over FY26-28, led by growth in retail assets under management (AUM), lower cost of funds following a rating upgrade, and improving operating efficiency.

However, it believes upside may be limited at current valuations, with return on assets (RoA) and return on equity (RoE) likely to remain moderate at around 2.1% and 10%, respectively, by FY28.

Piramal Finance Q4 update

Total AUM crossed ₹1 lakh crore, rising 25% year-on-year, while growth AUM increased 33% and now accounts for 97% of the total. The retail segment continues to dominate, contributing 85% of overall AUM.

The legacy AUM has been sharply reduced to ₹2,807 crore, now below 3% of the total book.

Profit after tax (PAT) for Q4 stood at ₹502 crore, up 390% year-on-year, while FY26 PAT rose 210% to ₹1,506 crore. Profit before tax (PBT) from the growth business came in at ₹1,560 crore for FY26, up 74%.

Net interest margin (NIM) improved to 6.5% in Q4, up 23 basis points sequentially.

Asset quality strengthened, with gross non-performing assets (GNPA) declining to 2.3%, while retail 90+ days past due (DPD) remained stable at 0.6%.

Retail operating expenses to AUM ratio declining to 3.6%, indicating better operating leverage. The balance sheet remains strong, with a net worth of ₹28,191 crore and AUM-to-equity at 3.6x.

Management has guided for continued momentum in FY27, with around 25% AUM growth, 50% profit growth and exit RoAUM of about 2.5%, compared to 2.1% currently.

It also expects margins to improve further, supported by the run-down of the legacy book, lower borrowing costs and a shift towards higher-yielding segments such as unsecured and gold loans.

Overall, the quarter reflects a sharp turnaround, with strong growth, improved profitability, better asset quality and clear visibility on future performance.

Of the nine analysts that have coverage on Piramal Finance, seven of them have a 'Buy' rating, while two recommends 'Hold' on the stock.

Shares of Piramal Finance Ltd. are trading 10.68% higher at ₹2,040. The stock is up 24% so far this year.

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