Piramal Finance Targets ₹1.5 Lakh Cr AUM by FY28 on 940% Q3 Profit Surge

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AuthorVihaan Mehta|Published at:
Piramal Finance Targets ₹1.5 Lakh Cr AUM by FY28 on 940% Q3 Profit Surge
Overview

Piramal Finance plans to double its Assets Under Management (AUM) to ₹1.5 Lakh Crore by March 2028 as part of a new strategy. This follows a strong Q3 FY26 performance, with Profit After Tax (PAT) jumping 940% year-on-year to ₹401 Cr, boosted by higher Net Interest Income. The company is shifting to a retail-focused, tech-driven model and reducing older assets.

Piramal Finance Eyes ₹1.5 Lakh Cr AUM by FY28 After Strong Q3 Results

Piramal Finance's consolidated Profit After Tax (PAT) for Q3 FY26 surged 940% year-on-year to ₹401 Cr. Total Assets Under Management (AUM) reached ₹96,690 Cr, a 23% increase from the previous year. The company's shift to a retail-led strategy is boosting profitability, though it continues to manage legacy assets.

Charting a New Course: Growth and Profitability Targets

Piramal Finance, part of Piramal Enterprises Ltd., has outlined a strategy focused on growth, profitability, and predictable earnings. The company aims to double its Assets Under Management (AUM) to ₹1.5 Lakh Crore by March 2028. It also targets an improved Return on Average Assets Under Management (RoAUM) of over 3% and stable earnings.

The company reported strong Q3 FY26 financial results, with consolidated PAT reaching ₹401 Cr, a 940% increase from the prior year quarter. Net Interest Income (NII) for the quarter grew 31% year-on-year to ₹1,227 Cr, reflecting solid operational performance.

This strategy involves transitioning to a retail-led business model using a 'High Tech + High Touch' approach. Piramal Finance plans to grow its Wholesale 2.0 book, aiming for a granular, diversified, and profitable portfolio, while systematically reducing its Legacy AUM to lower balance sheet risk.

Strategic Shift for Market Position

This strategic shift signals Piramal Finance's intent to expand its market share in retail lending. Achieving the AUM target and improving profitability would enhance shareholder value and strengthen its position as a leading NBFC.

The focus on AI and building a future-proof technology structure aims for operational efficiency and better customer engagement.

Building a Stronger Foundation

Piramal Finance has been actively focusing on building its retail lending book and de-risking its portfolio by reducing exposure to legacy assets. The company's credit ratings have been upgraded to 'AA+/Stable' by CRISIL and CARE Ratings, reflecting its strengthening financial profile as an Upper Layer NBFC. Piramal Enterprises Ltd. (PEL) merged with its subsidiary, Piramal Finance Ltd (PFL), in September 2025, consolidating its financial services. The company also transitioned from a Housing Finance Company (HFC) to an NBFC-ICC, approved by the RBI in April 2025.

What Investors Can Expect

  • Shareholders can expect a sharper focus on retail lending, which typically offers higher margins and less cyclicality.
  • The company aims to scale its Wholesale 2.0 book to capture higher-yielding corporate loans with improved risk management.
  • Reducing focus on Legacy AUM aims to lower potential non-performing assets and contingent liabilities.
  • Increased investment in AI and technology is expected to enhance operational efficiency and customer service.
  • The ₹1.5 Lakh Crore AUM target by FY28 signals an aggressive growth path, demanding significant capital and strong execution.

Potential Challenges Ahead

Company forecasts and plans carry inherent risks related to strategy execution, market conditions, and regulatory changes. Piramal Finance's success hinges on its ability to execute growth plans, manage technology shifts, and navigate market risks.

Past governance issues include a SEBI settlement in 2024 over alleged insider trading by a former MD.

Competitive Landscape

  • Bajaj Finance: As India's largest NBFC by AUM, Bajaj Finance champions a strong retail focus and digital innovation, setting a high benchmark for growth and operational efficiency with its AAA ratings.
  • HDFC Bank: A leading private bank, HDFC Bank maintains top credit ratings and focuses on retail credit growth and asset quality, mirroring the sector's emphasis on robust lending.
  • Muthoot Finance: Known for its extensive branch network and strong brand trust in gold loans, Muthoot is also expanding into other retail segments.

Key Financial Metrics

  • Piramal Finance's Consolidated PAT for Q3 FY26 was ₹401 Cr, showing a significant year-on-year improvement.
  • The company's Total AUM reached ₹96,690 Cr as of Q3 FY26, up 23% year-on-year.
  • Net Interest Income for Q3 FY26 stood at ₹1,227 Cr, a 31% year-on-year increase.
  • The company's Net Worth was ₹27,872 Cr as of Q3 FY26.
  • Capital Adequacy Ratio stood at 20.3% as of Q3 FY26.
  • Piramal Finance targets AUM of ₹1.5 Lakh Crore by March 2028.

What to Watch For

  • Monitor the company's progress towards achieving the ₹1.5 Lakh Crore AUM target by March 2028.
  • Observe continued improvements in profitability metrics, particularly RoAUM, and how the shift to retail impacts margins.
  • Track the strategic reduction of Legacy AUM and the expansion of the Wholesale 2.0 book.
  • Assess the effectiveness of the 'High Tech + High Touch' strategy and AI integration for operational efficiency and customer acquisition.
  • Watch for any commentary or updates during the investor meetings scheduled for March 30-31, 2026.
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