Buy Piramal Finance: MOFSL backs call after MD & CEO meet, here’s why
Piramal Finance had undergone a significant structural transition over the past four years, moving from a wholesale-heavy book to a diversified, retail-led franchise, MOFSL said.
- Nov 27, 2025,
- Updated Nov 27, 2025 9:07 AM IST
Motilal Oswal Financial Services on Thursday reiterated its 'Buy' rating on Piramal Finance and assigned a target price of Rs 1,790, based on its September 2027 SOTP valuation, following a meeting with Managing Director and Chief Executive Officer Jairam Sridharan. The brokerage said Piramal Finance had undergone a significant structural transition over the past four years, moving from a wholesale-heavy book to a diversified, retail-led franchise supported by a stable risk engine, a scaled distribution network and an engineering-driven technology backbone.
"Piramal has emerged as a large, young, and fast-scaling NBFC with a clear leadership position in semi-urban India. The company’s disciplined pivot toward retail, strong growth in affordable housing, competitive pricing, stable risk behavior, and improving operating leverage position it well for meaningful profitability expansion. With a clear pathway toward improving RoA, reducing legacy wholesale portfolio, potential credit rating upgrade, and additional capital release from any Shriram Life/General stake sale, we expect consistent compounding over the next several years," MOFSL said.
The brokerage noted that Piramal is now moving into a phase where the benefits of its multi-year transformation should start reflecting more strongly in its financial performance. With a predominantly retail portfolio in place, it feels the company is positioned for greater stability in credit costs and clearer margin visibility.
"The earnings volatility of the transition years is now firmly behind it, as the legacy wholesale book has been substantially run down and the retail engine will now drive consistent, predictable outcomes. We estimate a total AUM CAGR of 23 per cent and a 26 per cent CAGR in Retail AUM over FY25-28. We recently upgraded the stock to BUY and we maintain our stance with a revised target of Rs 1,790," it said.
MOFSL said the DHFL acquisition served as the catalyst for franchise expansion, branch scale-up and the creation of an operational backbone capable of sustaining long-term compounding. The company, it added, had steadily reduced its legacy wholesale exposures, strengthened the balance sheet through proactive provisioning and built a multi-product retail business that was now scaling with improving profitability.
Motilal Oswal Financial Services on Thursday reiterated its 'Buy' rating on Piramal Finance and assigned a target price of Rs 1,790, based on its September 2027 SOTP valuation, following a meeting with Managing Director and Chief Executive Officer Jairam Sridharan. The brokerage said Piramal Finance had undergone a significant structural transition over the past four years, moving from a wholesale-heavy book to a diversified, retail-led franchise supported by a stable risk engine, a scaled distribution network and an engineering-driven technology backbone.
"Piramal has emerged as a large, young, and fast-scaling NBFC with a clear leadership position in semi-urban India. The company’s disciplined pivot toward retail, strong growth in affordable housing, competitive pricing, stable risk behavior, and improving operating leverage position it well for meaningful profitability expansion. With a clear pathway toward improving RoA, reducing legacy wholesale portfolio, potential credit rating upgrade, and additional capital release from any Shriram Life/General stake sale, we expect consistent compounding over the next several years," MOFSL said.
The brokerage noted that Piramal is now moving into a phase where the benefits of its multi-year transformation should start reflecting more strongly in its financial performance. With a predominantly retail portfolio in place, it feels the company is positioned for greater stability in credit costs and clearer margin visibility.
"The earnings volatility of the transition years is now firmly behind it, as the legacy wholesale book has been substantially run down and the retail engine will now drive consistent, predictable outcomes. We estimate a total AUM CAGR of 23 per cent and a 26 per cent CAGR in Retail AUM over FY25-28. We recently upgraded the stock to BUY and we maintain our stance with a revised target of Rs 1,790," it said.
MOFSL said the DHFL acquisition served as the catalyst for franchise expansion, branch scale-up and the creation of an operational backbone capable of sustaining long-term compounding. The company, it added, had steadily reduced its legacy wholesale exposures, strengthened the balance sheet through proactive provisioning and built a multi-product retail business that was now scaling with improving profitability.