Piramal Finance retail AUM rises 30% as opex falls to 3.48%

Piramal Finance increased retail assets under management (AUM) by 30% year on year to Rs 97,462 crore in Q2 FY27 while its operating-expense-to-AUM ratio fell to 3.48% from 4.7% in Q2 FY25. The presentation also reported a 0.7% retail 90+ days past due (90+ DPD) ratio and 13.6% AUM yield excluding fee income.

How quickly is Piramal Finance growing its retail loan book?

Piramal Finance's retail AUM reached Rs 97,462 crore in Q2 FY27, up 30% year on year and 13% from Rs 85,885 crore at the end of FY26. The retail book has expanded from Rs 21,552 crore in FY22, according to the AUM series in the presentation.

Retail disbursements rose 34% year on year to Rs 14,646 crore in Q2 FY27 from Rs 10,958 crore in Q2 FY26. Q2 FY27 disbursements were also above Rs 12,527 crore in Q1 FY27, although the company notes that the Q2 number includes loan-against-securities disbursements and net disbursements for revolving-credit products.

The unsecured share of retail AUM was 24% in Q2 FY27, compared with 23% in FY26 and 19% in FY22. The retail mix shown in the presentation includes housing loans, loan against property (LAP), used-car loans, salaried personal loans, unsecured business loans, digital loans and rural micro loans.

Which segments are contributing to Piramal Finance retail growth?

Mortgages were Piramal Finance's largest retail category at Rs 64,650 crore, or 66% of retail AUM, in Q2 FY27. Mortgage AUM, comprising housing loans and LAP, grew 27% year on year, which was below the 30% increase in total retail AUM.

The relative growth rates indicate that products outside mortgages collectively expanded faster than the mortgage portfolio. At the same time, mortgages remained the majority of the Rs 97,462 crore retail book, so their performance remains central to the reported retail AUM trajectory.

Within the mortgage portfolio, housing loans accounted for Rs 34,164 crore of AUM in September 2026, up 16% year on year, while LAP accounted for Rs 30,486 crore, up 43%. Q2 FY27 housing-loan disbursements were Rs 2,958 crore, up 7% year on year, compared with Rs 3,824 crore for LAP, up 18%.

Housing loans had an average ticket size of Rs 24 lakh, an average loan-to-value ratio of 60% and a 11.7% disbursement yield. LAP had a Rs 29 lakh average ticket size, a 49% average loan-to-value ratio and a 12.9% disbursement yield; these are metrics for disbursements rather than for the full outstanding portfolios.

Has Piramal Finance reduced operating costs as AUM expanded?

Piramal Finance reduced its opex-to-AUM ratio to 3.48% in Q2 FY27 from 6.5% in Q4 FY23 and 4.7% in Q2 FY25. The company described the decline as about 300 basis points over the preceding 14 quarters, alongside retail AUM reaching Rs 97,462 crore.

The ratio also declined sequentially, from 3.59% in Q4 FY26 to 3.54% in Q1 FY27 and then 3.48% in Q2 FY27. Management said the ratio had entered its guided range and disclosed a long-range goal of a further 25-basis-point reduction in opex guidance, without specifying the numerical boundaries of that range.

Income ratios did not move in the same direction as the opex ratio. Total income as a percentage of loans declined to 14.6% in Q2 FY27 from 15.2% in Q2 FY26, while interest income declined to 13.1% from 13.3% and other income fell to 1.5% from 1.8%.

Piramal Finance attributed the lower other-income run rate to its strategic choice to reduce direct-assignment activity. Total income as a percentage of AUM also fell to 12.8% in Q2 FY27 from 13.3% in Q2 FY26, while the Q2 FY27 snapshot reported AUM yield, excluding fee income, at 13.6% and steady quarter on quarter.

Is Piramal Finance maintaining retail asset quality during growth?

Piramal Finance reported a retail 90+ DPD ratio of 0.7% in Q2 FY27, unchanged from Q1 FY27 and Q2 FY25. The company described the retail portfolio as stable over four years, with the measure covering loans overdue by more than 90 days.

Housing loans and LAP, the two largest mortgage products, each had a 0.6% 90+ DPD ratio in Q2 FY27. Their AUM stood at Rs 34,164 crore and Rs 30,486 crore respectively, meaning the two products together represented Rs 64,650 crore of the retail portfolio.

Performance varied across smaller products. Used-car loans had a 1.2% 90+ DPD ratio on Rs 6,008 crore of AUM, while salaried personal loans reported 0.7% on Rs 9,179 crore. Digital loans recorded 0.9% on Rs 6,299 crore, rural micro loans recorded 0.4% on Rs 1,762 crore, and unsecured business loans recorded 1.1% on Rs 6,523 crore.

Digital-loan 90+ DPD declined from 1.5% in Q2 FY26 to 0.9% in Q2 FY27, while rural micro-loan 90+ DPD declined from 1.8% to 0.4%. Unsecured business-loan 90+ DPD fell from 1.5% to 1.1% over the same period, even as the unsecured share of total retail AUM rose by 1 percentage point from FY26 to 24%.

Conclusion

Piramal Finance's Q2 FY27 figures show retail AUM growth and a lower operating-cost ratio occurring together: AUM rose 30% year on year to Rs 97,462 crore and opex-to-AUM reached 3.48%. Mortgage AUM still made up 66% of retail assets, but LAP grew faster than housing loans, while the overall retail 90+ DPD ratio remained at 0.7%.

The next measure to watch is management's stated long-range goal of a further 25-basis-point reduction in opex guidance. The presentation also identifies reduced direct-assignment activity as a reason for lower other income, leaving subsequent income ratios and the asset-quality performance of the 24% unsecured retail mix as disclosed areas to monitor.