Check Before You Invest : Piramal Finance Ltd

BSE: 544597 NSE: PIRAMALFIN ISIN: INE202B01038

| Sector: BFSI | Industry: Finance - Housing

Snapshot

Q.1 Which industry/sub-sector does Piramal Finance Ltd belong to?

Piramal Finance Ltd belongs to the BFSI sector, operating specifically within the Finance - Housing segment.

Q.2 Is Piramal Finance Ltd a good quality company?

Piramal Finance Ltd is a average quality company, based on a somewhat consistent 10-year financial track record.

Q.3 Is Piramal Finance Ltd undervalued or overvalued?

Piramal Finance Ltd appears Overvalued, as its key valuation ratios are above with their past averages.

Q.4 Is Piramal Finance Ltd a good buy now?

Piramal Finance Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of Piramal Finance Ltd?

Piramal Finance Ltd Operating Income growth is 22.75% for FY-2025, which is above its 5-year CAGR of -2.58%, indicating faster growth.

Q.2 Return on Assets of Piramal Finance Ltd?

Piramal Finance Ltd Return on Asset is 0.1%, which is above its 5-year historical median of -3.1%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NPM%	0.64	-28.68
PPOP%	334.85	-111.42
RoA%	0.1	-3.1

Q.3 Return on Equity (ROE) of Piramal Finance Ltd?

Piramal Finance Ltd Return on Equity is 0.3% for FY-2025, which is above its 5-year historical median of -12.8%, indicating the business is making better use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Piramal Finance Ltd?

Piramal Finance Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 334.85% for FY-2025, which is above its 5-year median(-111.42%), indicating increasing margins.

Q.5 Net Profit Margin of Piramal Finance Ltd?

Piramal Finance Ltd Net Profit Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 0.64% for FY-2025, which is above its 5-year median( -28.68%), indicating increasing margins.

Q.6 Total Asset growth of Piramal Finance Ltd?

Piramal Finance Ltd Total Asset growth is 17.78% for FY-2025, which is above its 5-year CAGR of -1.19%, indicating faster growth.

Q.7 Capital Adequacy ratio of Piramal Finance Ltd?

Piramal Finance Ltd Capital Adequacy ratio (CAR) is 21.49% for FY-2025, which is above the regulatory requirement of 15%, indicating strong capital position.

Q.8 Asset Quality of Piramal Finance Ltd?

Piramal Finance Ltd Gross Non-Performing Assets, which are loans overdue by more than 90 days, is 2.8% for FY-2025, which is above its 5-year median 2.72%, while Net Non-Performing Assets, which is GNPA minus provisions made for bad loans is 2.01% which is above its 5-year median( 1.86%), indicating deteriorating asset quality.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Piramal Finance Ltd?

Promoters hold 46.16% of the Piramal Finance Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Piramal Finance Ltd vs Industry Peers?

Piramal Finance Ltd AUM CAGR is -1.19%, compared to the 5-year industry median CAGR of 11.01%, indicating slower growth and losing its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of Piramal Finance Ltd vs industry peers

Piramal Finance Ltd profit metrics are in line with the industry median level of 8.31%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	0.64	22.2
PPOP%	334.85	0.53
RoA%	0.1	2.2

Q.3 Operating efficiency of Piramal Finance Ltd vs industry peers?

Piramal Finance Ltd ROCE (0.2) is below the industry median of (8.7); while the current ROE (-12.8) are below than the 5-year average Industry ROE (12.4). This shows that the business is positioned in the bottom quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NPM%	0.64	22.2
PPOP%	334.85	0.53
RoA%	0.1	2.2
ROCE%	6.8	8.7
ROE%	0.3	12.4

Valuation & price assessment

Q.1 Stock return of Piramal Finance Ltd over the last decade?

Over the last 5 years, the stock has delivered a CAGR of 166.56% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	-	166.6%	392.8%	11867.7%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	29.39	1.00	14.89
Price to Book	1.59	-0.03	1.26
Price to Sales	3.6	0.07	3.55
EV to EBITDA	10.08	37.46	10.70

Q.4 Valuation ratios of Piramal Finance Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 1.59% is higher than its historical median of -0.03%, indicating that at the current price the stock is overvalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

Piramal Finance Ltd return on invested capital (ROIC) is 4.76% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

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