Beat on profit, tracking AUM; IT stress emerging, margin intact

AUM grew 25% YoY to ₹1,06,940 Cr; Growth AUM 32% YoY

PAT up 67% YoY to ₹461 Cr; Growth business PBT ₹470 Cr vs ₹294 Cr

Q1 FY27 ROAUM 1.9% vs 1.5% in Q1 FY26; 40bp improvement YoY

NIM 6.5% flat QoQ, up 47 bps YoY; Growth book NIM 6.8% vs 6.9% prior quarter

67 branches as of Q1 end; aiming for 200 by March 2027

Risk metrics stable; unsecured business loans performing well despite Middle East stress

Retail OPEX/AUM 3.5% (down 10 bps QoQ); cost-to-income 53% vs 66% prior year

Salaried IT segment (13% of unsecured) showing 250-300 bps early delinquency rise in South; mortgage secured products more stressed than unsecured (atypical)

90+ DPD rose sequentially in Q1 after Q4 improvement; management identifies 4 idiosyncratic cases but 'seat belts on'

Growth book NIM 6.8% down ~10-20 bps QoQ; attributed to strategic DA reduction (17-20 bps) and calendar days (10 bps optical)

1.9% in Q1 FY27 vs 1.5% Q1 FY26 (40bp uplift); targeting 2.5% by FY27 exit (60-70bp seasonal jump expected Q1→Q4)

67 branches by Q1 end (from 22 in Q4); aiming 200 by March 2027; micro lending also scaling (178 rural branches)

Stress confined to IT salaried in South, 13% of unsecured. Unsecured PL itself performing well; issue is secured segment. No broad salaried stress. Will monitor but not pausing growth.

Embedded finance business highly flexible on volumes based on risk levels. Currently lowest risk ever seen, so highest volumes. Will cut if risk ticks.

Competition intensity not rising (same players). Small-ticket housing demand weak industry-wide. NIM delta is optical (90 vs 91 days), DA reduction (17-20 bps strategic choice), not fundamental. Mortgages growing 30% YoY.

Q1 always seasonal low. Larger book over year with same base people costs (increments front-loaded Q1) drives 60-70bp lift Q1→Q4. Same pattern every year.

CMML: refinancing, capital markets (debt/equity), OCF ahead of underwriting. Real estate: predominantly OCF beating underwriting. Incentivize borrowers to prepay if ahead.

Mathematical: disbursement yield higher on shorter-duration products. Gap won't close but directionality holds—if disbursal yield up, AUM yield follows. Secured lower in disbursal mix.

Cross-sell risk stable to improving. Lower inherent risk than new-to-Piramal; flows also better. No deterioration signals.

80%+ FLDG basis. 90+ days triggers 30-day partner recovery; delinquency back to zero. Remaining by day 150 gets 100% provision. Rapid resolution structure.

Leverage is AUM/equity. Regulatory capital adequacy is 18.85%. Three ₹3000 Cr deltas vs net worth: BAU items, DTAs (will unlock), investment book. At comfort zone; raise is enabling resolution for growth.

Avoid fixed/variable split in growth markets. Opex growing 10% vs revenue 40% vs AUM 25%—that's the proof. Another 40-50 bps OPEX/AUM extraction over 4-5 quarters.

Honest: don't know. Know 4 specific cases (cancer, lawsuit). Could be idiosyncratic or trend. Q2 started well; watching. Q4 confidence tempered.

Too early. No flow to later buckets or NPA yet. Metrics only in early buckets. Breaking news, not foundational. Caution warranted.

Originally required dedicated PL staff per branch for economics. Moving to new people models to increase penetration. Targeting 100% within 2-3 quarters.

PCR is output, not target. Increased ECL assumptions, minimum floors (proactive on RBI guidance). Mix matters: housing = low PCR, unsecured = high. Metric context-dependent.

Tracking: Q1 delivered 25% YoY; Growth business 32% YoY. Management 'confident' of meeting original guidance.

Q1 lowest seasonal quarter; 60-70 bps lift Q1→Q4 typical; staff cost increments front-loaded. NIM 6.5% structurally sound despite DA reduction.

67 branches by end Q1 (from 22 in Q4). Phase 2 launched. Rural branches 178 (vs 136 prior quarter).

New people models being introduced; currently below 100% due to economics of dedicated staff model.

Salaried IT segment (13% of unsecured base, concentrated South India) showing early-stage delinquency spikes. 250-300 bps rise in early buckets observed. AI/job cuts narrative creating headwinds. Stress more visible in secured products (mortgage, LAP) than unsecured (counterintuitive).

LAP (Loan Against Property) 90+ DPD saw small sequential uptick in Q1 after Q4 strength. Management identified 4 specific cases (medical, litigation), characterized as idiosyncratic, but admits 'seat belts on'. LAP has historically been stable but Q1 removes prior comfort. Monthly trends started July well.

Wholesale AUM growth 27% YoY despite elevated prepayments. Q1 prepayments: 74% of disbursements; 61% of FY27 contractual repayments already paid. Real estate borrowers monetizing assets ahead of underwriting; CMML refinancing by banks. Limits organic book growth in segment.

Small-ticket housing (sub-₹35L) growing at low single-digit or negative industry-wide. Management not seeing new competitive entrants but organic demand simply weak. Forces small-ticket-focused players to consolidate or shift to LAP, larger ticket. Piramal successfully diversifying into mass-affluent and LAP Plus.

Cost of borrowing currently down 4 bps to 8.80%; in down-cycle for 18 months, PLR not cut. Entering up-cycle now. While management states intention to smooth customer rate volatility, repricing lag could limit NIM expansion despite rate hikes. Hedge: stated 'no problem' cutting rates symmetrically if cycle reverses.