Nomura names Piramal Finance top NBFC pick after 67% profit jump, keeps Buy

what happened

Nomura has kept its Buy rating and Rs 2,550 target price on Piramal Finance, naming the company its top pick among non-banking financial companies under its coverage, according to Moneycontrol. The lender's net profit rose 67% year on year to Rs 5.4 billion in the second quarter of FY27, with total assets under management up 24% and retail AUM up 30%.

Nomura says margins should hold up as rates rise. Over 50% of the book is floating-rate, yet management sees no need to raise lending rates. Asset quality is broadly stable, although stress in mortgages among IT-sector borrowers in southern India persists, remaining geographically limited.

The brokerage still models a 2.9% return on assets under management for the lending business in FY29, above management's 2.5% target for the fourth quarter of FY27.

why it matters

For investors in India's financial sector, the report suggests that profit growth with low credit costs and stable margins helps non-bank lenders withstand higher interest rates. Risks remain in mortgages and digital loans, where delinquencies are still rising.

market impact

Indian NBFCs: strong earnings and stable margins support the sector, while mortgage stress is the main risk

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