Piramal Fin Q2 Net Doubles; Co-lending Concerns

Mumbai, Oct 17 (PTI) Non-bank lender Piramal Finance on Friday reported a two-fold jump in its net profit to Rs 327 crore for the second quarter of the 2025-26 financial year.

The company, which has merged its parent Piramal Enterprises into itself recently, had reported a net profit of Rs 163 crore in the September quarter of FY25.

Its core net interest income jumped 29 per cent to Rs 1,132 crore on the back of a 1.04 per cent expansion in the net interest margin to 6.1 per cent and a 22 per cent jump in the assets under management during the quarter.

The company's chief executive Jairam Sridharan told reporters that both the wholesale and also the retail businesses are doing well, and the lender is also progressing satisfactorily on the plans of winding down the legacy book.

From an asset quality perspective, only 0.8 per cent of the retail AUM.

The other income declined 24 per cent to Rs 196 crore, which was attributed by the management to one-time gains made in the year-ago period.

Focus on operating expenses, which grew by only 10 per cent to Rs 813 crore during the reporting quarter, was another factor which aided the NBFC to report higher profit numbers. The CEO said the operating expenses to assets ratio has come down to 3.9 per cent from 6 per cent three years ago.

Sridharan, however, flagged concerns around the co-lending side of the business, where the lender originated Rs 600 crore of loans for five banking partners during the quarter.

He said there is a lack of clarity on the guidelines which take effect from January 1, and hoped that the regulator will come out with some revision in a few weeks time once the concerns which the banks are having are ironed out.

"I think you will see a lot of business move to direct assignment rather than co-lending in the current environment. That's the way it is stacked up right now," he said, adding that NBFC-to-NBFC co-lending will grow from here.

Sridharan said the company has not opened any new branches for almost a year and the overall network continues to stand at 518 as of now, but it will step up on this aspect from the March quarter onwards.

He explained that the new additions did not come about because it had to absorb the addition of 200 branches opened in two years prior, and now that it is almost complete, it will be embarking on another phase of network growth.

On the merger, he said the amalgamation is now complete and the shares of PEL have been delisted. PFL has also received all the approvals for its listing and the same should happen in early November, he said.