S&P Global upgrades Piramal Finance on improving business conditions 

Piramal Finance

• S&P raises Piramal Finance rating to BB from BB- with stable outlook
• Q3 profit after tax surged to Rs 400 crore from Rs 39 crore last year
• S&P forecasts better profitability and asset quality within a year

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Credit ratings agency S&P Global on February 16 upgraded its long-term issuer credit rating on Piramal Finance to 'BB' from 'BB-’ on improving business conditions and optimistic outlook over the company’s abilities to generate stable revenues.

“We upgraded Piramal Finance because we believe the company's business and revenue will become more stable, given a significant decline in legacy loans, ” the agency said in a press release.

The agency said that it expects Piramal’s core profitability to improve over the next two years, with a return on assets (ROA) of between 2.3 percent and 2.8 percent for the fiscal year 2026, mostly due to one-off gains from the sale of stakes in Shriram Group's life insurance business and Piramal Imaging.

It further projected the company’s ROA to be about 2.3 percent in FY2027 and 2.7 percent in FY2028, citing normalisation of credit losses, an improvement in net interest margins (NIM), and the ability to utilise sizable tax loss carry forwards to offset future profits.

The agency further said that the company is likely to maintain strong capitalisation, and it expects the company to gain market share over the period.

“The stable outlook on our long-term rating on Piramal Finance reflects our view that the company will continue to improve its profitability and asset quality in an orderly manner over the next 12 months,” the agency said

In the third quarter of the current fiscal year, it posted a profit after tax (PAT) of about Rs 400 crore, a multi-fold rise from Rs 39 crore in Q3 FY25. Its revenue was Rs 2,918 crore, as compared to Rs 2,832 crore last corresponding quarter.