Piramal Finance Q2 profit rises 67%, margins and asset quality hold steady

what happened

Piramal Finance posted a strong second quarter, according to CNBC-TV18. Net profit after tax climbed 66.7% year on year to ₹565 crore from ₹327 crore. Net interest income reached ₹1,530 crore, up 35.2%, while operating profit rose 64.3% to ₹846 crore.

The net interest margin widened to 6.5% from 6.2% a year earlier and was flat sequentially. Gross NPAs held at 2.4%, while net NPAs edged up 10 basis points to 1.7%. Total AUM grew 23.7% year on year to ₹1.13 lakh crore and rose 5.8% from the previous quarter.

Management kept its FY27 AUM growth guidance at 25% and targets 50% profit growth. Return on assets is expected to rise to 2.5% by the fourth quarter from the current 2%. Management said the proposed IRDAI limits on insurance commissions might lower FY28 ROA by between 18 and 24 basis points before mitigation steps.

why it matters

Nomura keeps a Buy rating with a ₹2,550 target, and nine of the ten analysts covering the stock recommend buying. Shares closed at ₹1,950, down 12.2% over the past month and up 18.5% so far this year. The IRDAI decision on insurance commissions is the key question for the lender's earnings.

market impact

Piramal Finance: strong profit and stable asset quality support the stock; IRDAI commission limits are the main risk

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