Piramal Finance Stock Sees Significant Uptick Following Q4 Profit Surge

Piramal Finance Sees Sharp Rally on Strong Q4 Performance and Robust Growth Outlook

Piramal Finance stock experienced a significant surge on Tuesday, with the company's shares rising by nearly 12 percent in noon trade. This increase came after the company reported a strong performance in the March quarter and outlined a promising growth outlook. As of Tuesday, the stock was trading at Rs 2,062, representing a 11.88 percent gain on the day.

The company's Q4 profit after tax saw a substantial year-on-year jump of 390 percent to Rs 502 crore. Furthermore, the company's profit after tax for the fiscal year 2026 (FY26) rose 210 percent to Rs 1,506 crore. Piramal Finance's assets under management (AUM) crossed the Rs 1 lakh crore mark, with a year-on-year growth of 25 percent. The retail segment contributed 85 percent of the overall book, while the company continued to wind down its legacy book, which now accounts for just 3 percent of total AUM.

The company's asset quality improved significantly, with gross non-performing assets (NPAs) declining to 2.3 percent. Margins and operating metrics also showed improvement during the quarter. The net interest margin expanded to 6.5 percent, while the retail operating expense-to-AUM ratio declined to 3.6 percent, indicating improving operating leverage.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The company has guided for around 25 percent AUM growth and 50 percent profit growth in FY27, along with an exit return on assets under management of about 2.5 percent. Brokerages remain constructive on the stock, despite some near-term limitations.

Nomura has a 'buy' rating on Piramal Finance shares, with a target price of Rs 2,150. The brokerage notes that the company is "cleaning up and scaling up well," supported by strong growth guidance and improving returns. It highlights unsecured loans, gold loans, and lower cost of funds as key levers for margin expansion.

Jefferies, on the other hand, has a more cautious 'hold' rating with a target price of Rs 1,940. The brokerage points out that while AUM growth and margins were in line and asset quality in the growth book remained stable, reported profit included one-off gains used to provision legacy assets. It adds that the return ratios are expected to remain relatively subdued over the medium term.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Piramal Finance stock has gained 56 percent in one year, significantly outperforming the Nifty 50, which is down 1.1 percent over the same period. The company has a market capitalization of over Rs 46,000 crore.