Piramal Finance Q2 net profit soars 67% to Rs 545 crore

Pre-provision operating profit rose 64% to Rs 846 crore.

Net interest income grew 35% to Rs 1,530 crore as interest income rose 24% to Rs 3,358 crore and interest expenses increased 16% to Rs 1,828 crore. The company’s net interest margin expanded by 35 basis points to 6.5%. Its cost of borrowing stood at 8.79%.

Jairam Sridharan, MD and CEO, said that if the proposed insurance guidelines on distribution commissions are implemented in their current form, the company’s return on assets could decline by 18-24 basis points in FY28. The company earns about Rs 200 crore from the distribution of life and non-life insurance products.

He said the finance company was confident of meeting its FY27 net profit growth guidance of 50% year on year. Its RoA stood at 2%.

Assets under management grew 24% to Rs 1.13 lakh crore. Retail AUM increased 30% to Rs 97,462 crore, while wholesale AUM rose 24% to Rs 13,978 crore. Total borrowings stood at Rs 85,802 crore. Of the total borrowings, 31% was linked to MCLR, 30% was market-linked and 39% was at fixed rates.

Total income increased 33% to Rs 1,767 crore. Other income rose 20% to Rs 237 crore, comprising fee and commission income of Rs 131 crore, dividend income of Rs 10 crore and Rs 96 crore from other sources.

The year-earlier quarter included exceptional merger-related expenses of Rs 60 crore and a one-off tax expense of Rs 21 crore. Loan-loss provisions and fair-value losses, however, rose 22% to Rs 302 crore from Rs 248 crore.

Piramal Finance also appointed former SBI chairman Dinesh Khara as an independent director.

During the year, Piramal Finance raised Rs 3,850 crore in equity capital, comprising Rs 2,100 crore through a qualified institutional placement and a preferential allotment of Rs 1,750 crore to the promoter group.