Non-bank lender Piramal Finance on Monday reported a 67 per cent jump in net profit to ₹545 crore for the September quarter, helped by core income growth and improvements in costs.
The company's core net interest income grew 35 per cent to ₹1,530 crore due to a 24 per cent growth in assets under management and a 0.35 per cent expansion in net income margin to 6.5 per cent.
The cost-to-income ratio improved sharply to 52.1 per cent during the reporting quarter from 61.2 per cent, helping the bottom line.
Stressing that the company is uniquely positioned in the NBFC universe, as it does not see a threat to margins amid the rising interest rate environment, its Managing Director and Chief Executive Jairam Sridharan exuded confidence that it will be able to expand NIMs by up to 0.20 per cent over the next year.
When asked how such a feat will be possible despite rising rates, which increase an NBFC's borrowing costs, Sridharan explained that the rating upgrade it received recently will help reduce the cost of borrowing over the next 2-3 years and expand margins.
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Its AUM growth would have been higher, but for the elevated level of repayments ahead of contracted terms that it saw, Sridharan said, adding that nearly 70 per cent of the fresh disbursals were repaid during the quarter.
He said the tendency to repay ahead of schedule is higher in the wholesale segment, and within that it is the realty sector where it is witnessing the highest preference for repaying debts in advance.
The realty sector AUM growth for the quarter, which stands at about 7 per cent, would have been up to 25 per cent if not for the repayments, he said.
On asset quality, he said the company has not witnessed any stress in any segment, despite concerns raised on the impact from small business loans for financiers due to the West Asia crisis and the agricultural sector due to the El Nino factor.
He, however, reiterated that loans in South India given to salaried employees from the information technology sector continue to show signs of stress and the company is circumspect about lending to such individuals.
Its gross non-performing assets ratio remained stable at 2.4 per cent as of September 2026.
Meanwhile, the company also announced the appointment of former SBI chairman Dinesh Kumar Khara as an independent director for the next five years.
The Piramal Finance scrip closed 0.08 per cent down at 1,948.05 apiece on the BSE on Monday.
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