Piramal Finance Limited reports 30% growth AUM rise toward March 2028

Piramal Finance reported 30% year-on-year growth in growth assets under management (AUM) in Q2 FY27, while annualised growth-business return on AUM (RoAUM) reached 2.0%, up from 1.6% a year earlier. Management is measuring these indicators against its target of Rs 1.5 lakh crore of AUM by March 2028.

What is Piramal Finance targeting by March 2028?

Piramal Finance is targeting Rs 1.5 lakh crore of AUM by March 2028, growth-business RoAUM above 3%, and an AUM-to-equity ratio of 4.5 to 5.0 times. These are long-range goals that management originally disclosed in August 2023, rather than forecasts for a specified intervening quarter.

The company’s blueprint has four stated elements: AUM growth, profitability, predictable earnings with stable risk, and an artificial-intelligence-native operating model. The presentation tracks execution through growth AUM, annualised growth-business RoAUM, AUM-to-equity, credit-risk indicators and artificial-intelligence usage.

Piramal Finance has also disclosed a nearer profitability milestone of 2.5% annualised growth-business RoAUM in Q4 FY27. Its Q2 FY27 RoAUM was 2.0%, excluding profits related to recoveries from purchased or originated credit-impaired (POCI) assets, which are recoveries from the acquired stressed retail book from DHFL.

Is Piramal Finance's AUM growth supporting its March 2028 target?

Piramal Finance's growth AUM increased 30% year on year in Q2 FY27, compared with 24% growth in total AUM. Growth AUM includes retail and wholesale AUM but excludes the discontinued legacy business, and it accounted for 98.5% of total AUM at the Q2 FY27 reporting point.

Growth AUM expansion has moderated over the three comparable Q2 periods, while total-AUM growth has accelerated. Growth AUM rose 45% in Q2 FY25 and 37% in Q2 FY26 before reaching 30% in Q2 FY27; total AUM rose 12%, 22% and 24%, respectively.

Legacy AUM declined 32% quarter on quarter and 69% year on year to Rs 1,673 crore in Q2 FY27. The residual legacy book represented 1.5% of total AUM, compared with the 98.5% contribution from growth AUM, shifting the portfolio mix toward retail and wholesale businesses.

How far has Piramal Finance progressed on profitability and capital?

Piramal Finance reported annualised growth-business RoAUM of 2.0% in Q2 FY27, versus 1.6% in Q2 FY26 and 1.0% in Q2 FY25. The measure rose from 1.8% in Q1 FY27, while it had reached 2.1% in Q4 FY26 after ranging from 1.0% to 1.7% during FY25.

The Q2 FY27 result was 0.5 percentage points below management's Q4 FY27 target of 2.5% and more than 1 percentage point below the long-range goal of above 3%. The presentation gives reported quarterly RoAUM through Q2 FY27 and the Q4 FY27 target, but does not disclose quarterly RoAUM targets after that point.

AUM-to-equity was 3.6 times in Q2 FY27, compared with 3.7 times in Q1 FY27, following an equity capital raise in Q2 FY27. The ratio had increased from 2.1 times in Q1 FY24 to 3.6 times in Q4 FY26, and the reported Q2 FY27 level remains below management's March 2028 range of 4.5 to 5.0 times.

Are Piramal Finance's earnings and risk measures becoming steadier?

Piramal Finance reported consolidated profit after tax (PAT) of Rs 545 crore in Q2 FY27, following Rs 461 crore in Q1 FY27 and Rs 327 crore in Q2 FY26. Quarterly PAT increased through FY26 from Rs 276 crore in Q1 to Rs 502 crore in Q4, before the first two FY27 reported results.

The quarterly PAT series was more variable in the earlier periods shown in the presentation. It ranged from a loss of Rs 2,378 crore in Q3 FY24 to a profit of Rs 8,155 crore in Q1 FY23; from Q1 FY25 through Q2 FY27, reported quarterly PAT ranged from Rs 39 crore to Rs 545 crore.

Retail 90-plus days past due (90+ DPD) was 0.7% in Q2 FY27, unchanged from Q1 FY27 and compared with 0.8% in Q2 FY26. The ratio was 0.6% in Q4 FY26 and remained within the 0.6% to 0.8% range reported from FY24 onward, while wholesale Stage 2 and Stage 3 assets were below 0.1%.

How is Piramal Finance measuring artificial-intelligence execution?

Piramal Finance reported 476 billion tokens of combined small language model (SLM) and large language model (LLM) usage in Q2 FY27, compared with 91 billion in Q2 FY26. Token volume was 15 billion in Q2 FY25, rose to 178 billion in Q4 FY26 and then reached 320 billion in Q1 FY27.

The company links its Piramal.ai programme to underwriting, growth, customer experience, productivity and software development. In retail underwriting, vintage risk, measured as 30-plus delinquency at six months on book, declined from 5.6% for Q3 FY22 originations to 0.8% for Q3 FY25 originations; it was 0.8% again for Q4 FY26 originations.

Retail customer complaints fell from 2.6 per 1,000 customers in Q3 FY23 to 0.2 in Q2 FY27. On a trailing-12-month basis, disbursement per branch increased 17% to Rs 93 crore in Q2 FY27 from Rs 80 crore in Q2 FY26, while disbursement per employee rose 10% to Rs 3 crore from Rs 2.7 crore; the company also reported that artificial intelligence writes 57% of its overall code.

Conclusion

Piramal Finance's reported measures show progress against its March 2028 framework, with growth AUM rising 30% in Q2 FY27, legacy AUM reduced to 1.5% of total AUM and annualised growth-business RoAUM reaching 2.0%. AUM-to-equity of 3.6 times remains below the stated March 2028 range of 4.5 to 5.0 times, while retail 90+ DPD was 0.7%.

The next disclosed profitability checkpoint is management's Q4 FY27 growth-business RoAUM target of 2.5%, set at the end of FY26. Progress toward Rs 1.5 lakh crore of AUM by March 2028, the direction of AUM-to-equity after the Q2 FY27 capital raise, and reported retail and wholesale risk measures are the stated execution indicators to watch.