Piramal Enterprises is the kind of NBFC that throws big parties (₹74,692 Cr AUM, 400+ branches, $10 Bn balance sheet) but forgets to pay the DJ (ROE = 1.6%). Ajay Piramal has restructured this beast more times than an MBA student rewriting their CV, and now the company wants to become a retail-focused lender with 75% retail, 25% wholesale mix by FY28. Nice vision, but right now it’s like a swanky car with a scooter engine.
2. Introduction
Let’s start with the obvious: Ajay Piramal is a dealmaker. He once sold his pharma formulations business to Abbott for $3.7 Bn (still called one of the best exits in Indian pharma history). He then plunged into NBFCs, partnering with Bain Capital, CPPIB, CDPQ, and anyone else who answered his calls.
Piramal Enterprises today is an NBFC that has gone from being a real estate lender (aka “builders’ best friend”) to a diversified retail and wholesale player. Retail now makes up 73% of AUM, compared to just 33% in FY22. That’s like flipping from a Reliance Digital store to a D-Mart in three years.
But here’s the issue: while the loan book has been rejigged, the returns haven’t. ROE of 1.6%, ROA of 0.5%, and interest coverage of barely 1.1x. For context, Bajaj Finance is practically flexing its 19% ROE like a gym bro in a stringer vest.
3. Business Model – WTF Do They Even Do?
Piramal’s three main lending buckets:
Retail Lending (₹54,000 Cr, 73% of AUM): Home loans, LAP, small business loans, used car finance. Basically, anyone who wants money for needs ranging from “new 2BHK” to “my kirana needs shelves.”
Wholesale 1.0 (16% of AUM): The ghosts of real estate past. Once 66% of book, now cut down by 72%. They’re still cleaning up these builder loans like parents cleaning after a Holi party.
Wholesale 2.0 (11% of AUM): New-age real estate + corporate lending with smaller ticket sizes. Think less “big builder bailouts,” more “mid-market lending with cash flow checks.”
Plus, they run Piramal Alternatives (₹1.5 Bn AUM across credit & distressed funds) and hold 50% in Pramerica Life Insurance. That JV writes ₹1,900 Cr in premiums, proving even agents selling insurance in Tier-3 towns work harder than Piramal’s treasury team.
4. Financials Overview
Quarterly Snapshot (₹ Cr):
Metric
Latest Qtr (Jun’25)
YoY Qtr (Jun’24)
Prev Qtr (Mar’25)
YoY %
QoQ %
Revenue
2,643
2,227
2,854
+18.7%
-7.4%
EBITDA / Fin. Profit
229
269
-100
-14.9%
N/A
PAT
276
181
102
+52%
+170%
EPS (₹)
12.2
8.0
4.5
+52%
+171%
Commentary: Looks great on growth optics, but remember: other income and one-offs have been doing heavy lifting. Pure financing profit margins swing like an IPL cheerleader—exciting, but unpredictable.
5. Valuation – Fair Value Range Only
P/E Method:
EPS (TTM): ₹25.7
Sector average P/E: 20–25x
Fair Value = ₹515 – ₹640
P/B Method:
Book Value: ₹1,202
Apply 0.8–1.2x range (given low ROE/ROA)
Fair Value = ₹960 – ₹1,440
DCF Quick Cut:
AUM CAGR target: 15% till FY28
ROE trajectory improving to ~10% (assumption)
Value range = ₹22,000 – ₹28,000 Cr equity = ₹970 – ₹1,230/share
Fair Value Range: ₹950 – ₹1,250
Disclaimer: Educational purposes only, not investment advice.
6. What’s Cooking – News, Triggers, Drama
Merger in Progress: PEL merging with Piramal Finance. Expect name changes, CFO changes, but hopefully not more strategy changes. Completion by Q1 FY26.
Divestments Done: Shriram stakes sold, unlocking ₹6,200+ Cr. Still holds ₹1,700 Cr in unlisted Shriram group cos.
GST Headache: From ₹1,502 Cr demand, appellate authority cut it to ₹9.2 Cr. Ajay Piramal probably popped champagne that day.
