Non-bank lender Piramal Finance reported a sharp improvement in profitability for the December quarter, with net profit jumping to ₹401 crore, compared with ₹39 crore in the same period last year, supported by strong asset growth, margin expansion and controlled costs.
The company’s managing director and chief executive officer, Jairam Sridharan, said the performance was driven by a combination of higher assets under management (AUM), improved net interest margins (NIMs), disciplined operating expenses and lower credit costs.
AUM Growth and Margin Expansion
During the quarter, Piramal Finance’s AUM grew by over 23% year-on-year, while NIMs expanded by 50 basis points to 6.30%. Operating expenses rose by a modest 4%, even as provisions increased 36%, reflecting a calibrated approach to risk management.
The company’s core net interest income rose 31% year-on-year to ₹1,227 crore, while other income increased 23% to ₹252 crore during the quarter.
Profitability Targets and Funding Costs
Sridharan said Piramal Finance currently delivers a return on AUM of 1.9% and is targeting an improvement to around 3% over the medium term. Achieving this would require a further 30 basis point expansion in NIMs, he added.
Expressing confidence on margins, Sridharan pointed to the company’s recent credit rating upgrade and lower cost of funds, aided by borrowings from multilateral agencies, as key drivers for future margin expansion.
Asset Quality Remains Stable
On asset quality, Piramal Finance said loans overdue by more than 90 days remained stable at 0.8% as of the end of December, indicating continued resilience in the loan book despite a challenging credit environment.
Market Reaction
Shares of Piramal Finance closed 1.53% lower at ₹1,792.95 on the BSE, underperforming the broader benchmark, which declined 0.94% during the session.
Follow Startupbydoc for daily startup insights, funding news, IPO analysis, and business breakdowns.