Shares of Piramal Finance Ltd. are trading over 11% higher on Tuesday, April 28, following the non-banking financial company's strong Q4FY26 performance. According to reports from CNBC TV18, the stock is currently trading at ₹2,040, representing a 24% gain for the year so far. The market response reflects investor confidence in the company's robust growth trajectory and improved financial metrics, with the stock closing 1.4% lower at ₹1,837.90 on April 27, 2026, despite the earnings report, suggesting the market is already considering sustainability concerns.
Of the nine analysts that have coverage on Piramal Finance, seven of them have a 'Buy' rating, while two recommends 'Hold' on the stock. As reported by CNBC TV18, brokerage firm Nomura has maintained its 'buy' rating with a price target of ₹2,150, citing the company's steady progress in reducing legacy assets while scaling growth. The analyst expects loan growth of around 25% in FY27 and return on average assets under management (RoAUM) reaching 2.5% by Q4FY27. According to latest reports, analysts generally maintain a 'Buy' or 'Outperform' rating, with an average 12-month price target around ₹1,843.75, suggesting limited immediate downside despite concerns about sustainability.
According to the Q4FY26 results reported by CNBC TV18, 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 company's profit after tax (PAT) for Q4 stood at ₹502 crore, up 390% year-on-year, with FY26 PAT rising 210% to ₹1,506 crore. Net interest margin (NIM) improved to 6.5% in Q4, up 23 basis points sequentially, with profit before tax (PBT) from the growth business coming in at ₹1,560 crore for FY26, up 74%. The quarter's profitability was significantly boosted by ₹1,590 crore in exceptional gains from asset sales, including stakes in Shriram Life Insurance and Piramal Imaging. Pre-provision operating profit also grew 25% year-on-year to ₹694 crore, showing strong core business growth.
As reported by CNBC TV18, 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%. The legacy AUM has been sharply reduced to ₹2,807 crore, now below 3% of the total book. The retail operating expenses to AUM ratio declining to 3.6%, indicating better operating leverage. The company reported higher efficiency with expenses to AUM dropping to 3.4% from 4% a year prior. The balance sheet remains strong with net worth of ₹28,191 crore and AUM-to-equity at 3.6x. However, the company increased loan loss provisions to ₹1,787 crore from ₹531 crore in the prior year, citing legacy assets, which reduces profitability and points to potential credit quality issues in older portfolios.
Despite the strong performance, Piramal Finance's trailing twelve-month P/E ratio is around 41.48, significantly higher than peers like HDFC Bank (P/E ~16-19x) and Bajaj Finance (~31.8-35.2x). This high valuation contrasts with a concerningly low return on equity (ROE) of -0.05%, or 5.54% over the last three years, raising questions about translating retail AUM growth into strong shareholder returns. The sector faces margin pressure from rising bond yields and funding costs, intensified by geopolitical tensions affecting liquidity. While the company holds a strong liquidity position with ₹8,640 crore in cash and liquid investments and has received multiple credit rating upgrades, the retail AUM growth of 33% to ₹85,885 crore, making up 85% of the total portfolio, aims to build a more stable business model.
