Whalesbook
Piramal Finance is embarking on an ambitious fundraising plan, aiming to secure up to ₹30,000 crore by FY27. This capital infusion is crucial for supporting its target of a 25% year-on-year increase in assets under management (AUM) for the fiscal year. The company also aims to improve its net interest margins (NIM) to around 7% and expects its total borrowings to surpass ₹1 lakh crore by FY27, up from ₹79,945 crore in March 2025. A key objective is the full resolution of legacy DHFL loans by FY27, which currently represent 3% of AUM. The firm intends to maintain its retail-to-wholesale asset mix at 85:15.
Prompted by volatile foreign markets, Piramal Finance is shifting its funding strategy to rely more heavily on domestic debt capital. This move is seen as a response to global financial uncertainties and aims to manage funding costs and availability more effectively. CEO Jairam Sridharan has indicated a move to reduce the company's reliance on bank borrowings.
As of April 28, 2026, Piramal Finance's stock was trading around ₹2,013.00, with a market capitalization of ₹42,243 crore and a P/E ratio of approximately 41.0. The company's stock has shown strong recent performance, gaining 39.31% over the past six months and year-on-year. A significant surge of 11.88% occurred on April 28, 2026, following strong March quarter results. S&P Global Ratings upgraded Piramal Finance to 'BB/B' in February 2026, citing improving business stability and strong capitalization, projecting a risk-adjusted capital (RAC) ratio between 13.5%-14.5% for fiscals 2027 and 2028. The company's credit cost target is set at 1.5%, within the range of peers.
Piramal Finance's projected 25% AUM growth for FY27 is robust compared to the broader NBFC sector, which Morgan Stanley estimated at 19% year-on-year for Q1 FY26. However, its 7% NIM target is ambitious when compared to competitors; for example, Bajaj Finance has lower NIMs, and HDFC Bank's NIM is typically around 3.5%-4.2%. Piramal Finance's P/E ratio of roughly 41.0 as of April 2026 is also higher than many peers, including Cholamandalam Investment and Finance Company (P/E 27.38) and Shriram Finance (P/E 22.91). Analyst consensus is largely positive, with a predominant 'Buy' or 'Outperform' rating and price targets reaching up to ₹2,150. Jefferies, however, maintains a cautious 'hold' rating with a target of ₹1,940, citing valuation concerns.
The substantial fundraising plan increases Piramal Finance's leverage, with total borrowings projected to cross ₹1 lakh crore by FY27. Its debt-to-equity ratio stood at 2.58 as of April 2026. A heavy reliance on domestic debt could lead to higher funding costs, potentially impacting the targeted NIM expansion. The company's low return on equity (ROE) has also been noted, with figures of 2.82% as of April 2026 and 0.66% over the last three years according to Screener, suggesting potential challenges in converting revenue growth into shareholder value. Nomura has flagged that rising funding costs and geopolitical risks, such as the conflict in West Asia, could affect NBFCs with exposure to MSME and unsecured loans, potentially leading to elevated credit costs. Despite the CEO's positive credit trends in unsecured loans, the sector remains vulnerable to economic shocks.
Looking ahead, Piramal Finance has guided for approximately 25% AUM growth and 50% profit growth in FY27, with an exit return on assets under management of about 2.5%. While analyst sentiment leans towards optimism about the company's growth trajectory, caution from analysts like Jefferies highlights the market's awareness of risks associated with ambitious growth targets and current valuations.