1. At a Glance — Something Big Has Changed Here
There are lenders that grow fast.
There are lenders that survive credit cycles.
And then there are lenders that blow themselves up, bury the wreckage in “legacy assets,” then attempt a rebirth while calling it transformation.
Piramal Finance seems to be attempting the third.
And for once, it may be working.
Three years ago this looked like a post-merge clean-up story after the DHFL mess — legacy assets everywhere, losses eating capital, skeptics circling like vultures. Today, the same institution has crossed ₹1,01,230 crore AUM, retail is 85% of the book, legacy assets are down to just 3%, PAT jumped 210% YoY to ₹1,506 crore, and management is talking about ₹1.5 lakh crore AUM by FY28.
That is not a cosmetic improvement.
That is a business model mutation.
But before investors start singing hallelujah, pause.
Because this quarter had a strange cocktail:
- Explosive reported profit growth.
- Heavy provisions.
- Exceptional gains from asset monetisation.
- AI everywhere in investor decks (whenever everyone says AI this much, one must hold wallet tighter).
- And valuation at 174x trailing earnings while peers trade near low teens. That is either genius pricing, or comedy.
Which one is it?
That is where this gets interesting.
Because under the surface, Piramal today looks less like a distressed lender and more like a retail mortgage machine trying to become a compounding NBFC.
Housing + LAP now form ~68% of retail book.
Wholesale 2.0 is growing 38%.
Cost of borrowing has fallen to 8.84%.
GNPA down to 2.3%.
RoAUM hit 2.1%.
That is not accidental. That is management walking some of the talk.
And yet…
Cash flow looks ugly.
Leverage is still hefty at ₹79,989 crore borrowings.
ROE at 0.94% still looks embarrassing for a “premium multiple” lender.
Question for readers:
Is this an emerging quality lender being misread through old scars?
Or a beautifully narrated turnaround story the market has overpaid for?
That is the puzzle.
And good investments often begin as puzzles.
2. Introduction — From Troubled Balance Sheet to Retail Machine?
This is no longer old Piramal.
Old Piramal was wholesale real-estate lending, occasional blowups, and enough complexity to frighten auditors.
New Piramal wants to be retail-led compounding.
Massive difference.
Retail AUM grew from ₹21,552 crore in FY22 to ₹85,885 crore now.
That is nearly 4x.
Legacy AUM collapsed from ₹43,175 crore to ₹2,807 crore.
That is asset detox. Brutal and necessary.
Management had promised:
- Retail-led growth
- De-risking
- Better profitability
- Better ratings
And oddly enough…
They delivered most of it.
Crisil, CARE and ICRA moved them to AA+.
S&P upgraded.
Moody’s moved outlook positive.
Ratings agencies do not hand those out for motivational speeches.
But can earnings sustain?
That is where debate begins.
Because a lender isn’t judged in sunshine.
It’s judged in monsoon.
And Indian credit cycles always bring monsoon.
3. Business Model — What Exactly Do They Do?
Think of Piramal as three businesses stitched together:
Retail Lending (85%)
- Housing loans
- Loan against property
- Used car loans
- Business loans
- Personal loans
- Digital loans
- New gold loans
This is the engine.
And frankly, it looks increasingly like a diversified retail lender.
Wholesale 2.0
Sounds like software.
Actually credit.
Real estate + corporate mid-market loans.
Average ticket ₹53 crore.
Yield 14.4%.
Basically: “we still do
