Revenue and Operating Performance
Net sales for Piramal Finance have shown considerable variation, peaking at over ₹12,800 crores in the fiscal year ending March 2019 before declining sharply in subsequent years. The company’s total operating income followed a similar trajectory, with a notable dip to around ₹6,100 crores in March 2022, before rebounding to exceed ₹10,200 crores by March 2025. This recovery indicates a gradual restoration of business activity after a period of contraction.
Operating profit margins have mirrored this volatility. The margin was robust at approximately 65% in 2019 but plunged into negative territory during 2020 and 2021, reflecting operational challenges and elevated costs. By March 2025, the operating profit margin had improved significantly to over 62%, signalling a return to healthier operational efficiency.
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Profitability and Earnings
Piramal Finance’s profitability has been under pressure, with profit after tax (PAT) swinging from a loss of nearly ₹15,000 crores in March 2021 to a positive ₹348 crores in March 2025. The company recorded negative PAT margins exceeding 170% during its worst years but has since improved to a positive margin above 5% in the latest fiscal year. Earnings per share (EPS) reflect this trend, recovering from deeply negative values to a positive ₹21.54 per share by March 2025.
Interest expenses have remained substantial, peaking at over ₹9,400 crores in 2019 and moderating to around ₹5,280 crores by 2025. This reduction in interest burden has contributed to the improved bottom-line results. Exceptional items had a significant impact in prior years, particularly in 2023 and 2024, but were absent in the latest fiscal year, aiding clearer operational assessment.
Balance Sheet and Financial Position
The company’s balance sheet has undergone notable changes. Shareholder’s funds were positive and growing until 2019 but turned negative in 2020, reflecting accumulated losses and financial strain. However, by March 2025, reserves had recovered substantially to over ₹27,000 crores, indicating a strengthening equity base. Total liabilities decreased from over ₹1,06,000 crores in 2019 to approximately ₹80,700 crores in 2020, reflecting deleveraging efforts.
Debt levels, particularly short-term borrowings, remained high but showed a downward trend from nearly ₹90,000 crores in 2019 to about ₹85,000 crores in 2020. Non-current assets and investments have fluctuated but remain significant, supporting the company’s operational capacity and investment strategy.
Cash Flow Dynamics
Cash flow from operating activities has been inconsistent, with negative cash flows recorded in several years including 2018 and 2019, but a strong positive inflow of over ₹12,500 crores in 2020. Investing activities have also varied, with inflows and outflows reflecting strategic asset management. Financing activities showed large inflows in earlier years, tapering off to outflows by 2020, consistent with debt repayment and capital restructuring. Closing cash and cash equivalents rose sharply to nearly ₹6,850 crores by March 2020, indicating improved liquidity.
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Summary of Historical Performance
Overall, Piramal Finance’s historical performance has been marked by significant volatility, with a peak in revenue and profitability in 2019 followed by a challenging period through 2021. The company faced substantial losses and negative margins during this downturn but has demonstrated a recovery trajectory in recent years. Improvements in operating profit margins, reduction in interest expenses, and a strengthening balance sheet have contributed to a return to profitability by 2025. Cash flow management has also improved, supporting liquidity and operational stability.
Investors analysing Piramal Finance should consider this history of fluctuations alongside the recent positive trends, recognising both the risks and the potential for continued recovery in the company’s financial health.
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