Piramal Finance retail AUM grows 30% as costs decline

Piramal Finance reported retail assets under management (AUM) of Rs 97,462 crore in Q2 FY27, up 30% year on year, while its operating-expense-to-AUM ratio fell to 3.48% from 6.5% in Q4 FY23. Retail disbursements reached Rs 14,646 crore, 34% above Q2 FY26, alongside a 0.7% retail 90-plus-days-past-due ratio.

How quickly did Piramal Finance retail AUM and disbursements grow?

Piramal Finance’s retail AUM grew 30% year on year to Rs 97,462 crore in Q2 FY27, while retail disbursements increased 34% to Rs 14,646 crore. Disbursements were also higher than Rs 12,527 crore in Q1 FY27, showing a Rs 2,119 crore sequential increase. The reported AUM refers to the retail lending portfolio rather than total company assets.

The retail book has increased from Rs 21,552 crore in FY22 to Rs 85,885 crore in FY26 and Rs 97,462 crore by Q2 FY27. Q2 disbursements rose from Rs 3,973 crore in FY23 to Rs 6,246 crore in FY24, Rs 8,065 crore in FY25 and Rs 10,958 crore in FY26. The Q2 FY27 disbursement total was therefore Rs 3,688 crore above the corresponding prior-year quarter.

What is driving Piramal Finance’s retail portfolio mix?

Piramal Finance’s mortgages AUM, comprising housing loans and loan against property, was Rs 64,650 crore in Q2 FY27, representing 66% of retail AUM and growing 27% year on year. The mortgage balance was the largest disclosed retail category, leaving 34% of the Rs 97,462 crore retail book in other products.

Housing loans had AUM of Rs 34,164 crore as of Q2 FY27, while loan against property had Rs 30,486 crore. Their combined Rs 64,650 crore balance compares with Rs 6,299 crore in digital loans, Rs 6,008 crore in used-car loans, Rs 9,179 crore in salaried personal loans and Rs 6,523 crore in unsecured business loans. Loan against property expanded 43% year on year, faster than housing loans at 16%.

The unsecured share of retail AUM was 24% in Q2 FY27, compared with 23% in FY26 and 19% in FY22. Piramal Finance reported a distribution footprint of 838 branches in 621 cities across 25 states. The presentation’s other-assets category included gold loans of Rs 65 crore, security receipts of Rs 1,182 crore and pass-through certificates of Rs 79 crore at Q2 FY27.

How far has Piramal Finance’s opex-to-AUM ratio fallen?

Piramal Finance’s operating-expense, or opex, to AUM ratio declined to 3.48% in Q2 FY27 from 6.5% in Q4 FY23. That is a reduction of about 300 basis points over 14 quarters, where 100 basis points equal one percentage point. The decline occurred as retail AUM rose to Rs 97,462 crore.

The reduction continued through the latest reported quarters: the ratio was 4.3% in Q4 FY25, 3.59% in Q4 FY26, 3.54% in Q1 FY27 and 3.48% in Q2 FY27. Management said the ratio had entered its guided range and described the trend as operating leverage in the retail business. The presentation also cites a long-range goal of a 25-basis-point reduction in opex guidance.

What happened to Piramal Finance’s retail income profile?

Piramal Finance’s retail total income was 14.6% in Q2 FY27, down from 14.7% in Q1 FY27 and 15.2% in Q2 FY26. Interest income was 13.1%, compared with 13.3% in both Q1 FY27 and Q2 FY26. Other income was 1.5%, below the 1.8% reported a year earlier.

Management attributed the lower other income to a strategic choice to reduce the Direct Assignment, or DA, run-rate. Retail total income as a percentage of AUM was 12.8% in Q2 FY27, compared with 12.9% in Q1 FY27, 13.3% in FY26 and 14.0% in FY25. The lower income-to-AUM measure was reported alongside the 3.48% opex-to-AUM ratio.

Piramal Finance reported an AUM yield of 13.6% in Q2 FY27, excluding fee income, and said it was steady quarter on quarter. This differs from total income as a percentage of AUM because the yield measure excludes fee income, while the income presentation separately reports interest income and other income. The source does not disclose a quarterly numerical comparison for the 13.6% yield.

How did Piramal Finance’s retail asset quality differ by product?

Piramal Finance reported a 90-plus-days-past-due, or 90+ DPD, ratio of 0.7% for the overall retail portfolio in Q2 FY27. The ratio was unchanged from Q1 FY27 and Q4 FY26, and the presentation described the portfolio as stable over four years. The 0.7% measure covers the Rs 97,462 crore retail AUM reported at Q2 FY27.

Housing loans and loan against property each had 90+ DPD of 0.6% in Q2 FY27. Used-car loans were at 1.2%, salaried personal loans at 0.7%, unsecured business loans at 1.1%, digital loans at 0.9% and rural micro loans at 0.4%. These product measures show that the portfolio-level ratio combines categories with different delinquency levels.

Rural micro loans recorded the largest improvement among the disclosed comparisons, with 90+ DPD falling from 7.0% in Q4 FY25 to 0.4% in Q2 FY27. Digital loans declined from 3.0% in both Q2 FY25 and Q3 FY25 to 0.9% in Q2 FY27. In contrast, used-car loans were at 1.2% in Q2 FY27, unchanged from Q1 FY27 but below 1.4% in Q2 FY26.

Conclusion

Piramal Finance’s Q2 FY27 retail performance combined 30% AUM growth and 34% disbursement growth with a 3.48% opex-to-AUM ratio, down from 6.5% in Q4 FY23. Mortgages accounted for 66% of retail AUM, while the overall 90+ DPD ratio remained at 0.7%. Retail income measures moderated, with management linking lower other income to reduced DA activity.

The next reported periods will indicate whether opex-to-AUM continues to decline below 3.48% while disbursements remain above the Rs 14,646 crore recorded in Q2 FY27. Management’s disclosed long-range goal is a 25-basis-point reduction in opex guidance, but the presentation does not state a target date or a final numerical ratio. Product-level 90+ DPD, particularly in used-car, unsecured business and digital loans, will also remain measurable indicators of portfolio performance.