Piramal Finance Ltd.

“Piramal Finance operates in a structurally attractive Indian retail credit market and is executing a credible wholesale-to-retail pivot, but the business currently earns ~5% ROE against a ~15% cost of equity, carries a DHFL-inherited NPA overhang that will take 2-3 years to fully resolve, and trades at 1.52x book — pricing in much of the turnaround before it has materialized. Management has a poor capital allocation track record in financial services, moats are thin, and the liability structure is fragile enough that a coincident credit and liquidity shock could cause permanent capital impairment. The stock is not cheap enough to compensate for these risks; at 0.9-1.0x book with visible ROE improvement to 12%+, the thesis becomes compelling.”