Nomura has maintained its 'Buy' rating on Piramal Finance with a target price of Rs 2,550, naming it its top pick among non-banking financial companies (NBFCs) under its coverage. The brokerage said the lender's healthy operating trends, reduction in its legacy book and management's confidence in achieving a return on assets under management (ROAUM) of 2.5% by the fourth quarter of FY27 support its positive view.
Piramal Finance reported a 67% year-on-year increase in net profit to Rs 5.4 billion in the second quarter of FY27, supported by 24% growth in total assets under management (AUM) and 30% growth in retail AUM. The legacy book declined 32% sequentially and accounted for 1.5% of total AUM as of September 2026.
Credit costs remained benign at 1.1% on an annualised basis in the quarter, while net slippages as a percentage of opening loans were at their lowest in 11 quarters. Net interest margins (NIMs) expanded by only 2 basis points sequentially, as yields were affected by the lower number of days in the second quarter compared with the first.
Nomura said management does not expect the rising interest rate environment to drag down NIMs, with Piramal's credit rating upgrade in the fourth quarter of FY26 and the run-down of its legacy book expected to provide protection.
"Thus, despite having over 50% of the book in floating rate assets, it does not see the need to hike its customer lending rate," Nomura said, referring to management's assessment.