Power Finance Corporation Ltd. (PFC) was incorporated in 1986 - a Schedule-A Navratna CPSE (Central Public Sector Enterprises) and is a leading Non-Banking Financial Corporation in the Country. It is a specialized public financial institution in power sector and is the largest infrastructure finance company in the country by net worth. It is incorporated to finance, facilitate, invest and promote India's integrated development of the power and associated sectors. PFC's product portfolio comprises of financial products and services mainly to power projects like project term loans, short term loans, equipment lease financing, discounting of bills and consultancy services. It has also initiated financing of projects based on renewable energy...

We recently met Ms Parminder Chopra, GM Finance, Power Finance Corporation (PFC), and gleaned incremental insight into the stressed assets situation in the Indian power sector. The most key takeaway from our conversation was that, broadly speaking, the provision cover that PFC is currently carrying on any given stressed asset is indicative of the expected loss given default (LGD) for that specific asset. Since these stressed assets have system-wide exposures across the banking sector, insight garnered from PFC has a read-across for banks that have exposures to the same assets as PFC. To get a sense of the provision cover on specific...

Power Finance Corporation Ltd Q2FY19 results Comment Operating Income grew by 6.3% to Rs. 7407.08 Cr in Q2FY19 when compared to the previous quarter. Also, it rose by 8.16% when compared with Q2FY18.

owing to decline in NIM to 3.4% by FY20E from 4.1% in FY17. We expect Gross/Net NPA ratios to increase further to 6.4%/4.8% by FY19E due to withdrawal of various forbearances by the RBI. While uncertainty around the asset quality and credit cost continue to hamper the stock price, high dividend yield (~9.0%) will limit further downside in the stock. Hence, we upgrade rating to BUY with a downward TP of Rs97 (P/ABV of 0.8x for FY20E). Distribution segment drive growth in the loan book...

owing to decline in NIM to 3.4% by FY20E from 4.1% in FY17. We expect Gross/Net NPA ratios to increase further to 6.4%/4.8% by FY19E due to withdrawal of various forbearances by the RBI. While uncertainty around the asset quality and credit cost continue to hamper the stock price, high dividend yield (~9.0%) will limit further downside in the stock. Hence, we upgrade rating to BUY with a downward TP of Rs97 (P/ABV of 0.8x for FY20E). Distribution segment drive growth in the loan book...

PFC reported a disappointing P&L; performance with Q3 PAT at Rs 16 bn (down 17.7% YoY; our est. Rs 18.6 bn), primarily led by sharp decline in NIM (down 35 bps QoQ at 3.85%).

Power Finance Corporation Ltd Q3FY18 results comment Operating Income fell by 11.16% to Rs. 6127.46 Cr in Q3FY18 when compared to the previous quarter. Also, it decreased by 10.25% when compared with Q3FY17.

The interest income of the company was Rs. 6,984 crore in the Q2FY18, slightly up from Rs. 6,968 crore year ago. The company has made a provision of Rs. 1,089.86 crore for nonperforming assets (NPAs or bad loans) in the Q2FY18, which is higher than Rs. 313.36 crore year ago. The company's gross NPAs as on 30 September 2017 stood at Rs. 21,504.44 crore, down from Rs. 30,718.61 crore on 31 March 2017. Its loan book as on FY17 includes sanction of Rs. 1,00,603 crore with disbursement amount of Rs. 62,798 crore. Of total loans ~72% of advances belong to state power utilities, 9% to central power utilities, 14% to private power utilities and 5% to joint...

PFC reported a PAT of Rs 14.3 bn (down 17% YoY) dragged by higher provisions (up 137% YoY) and lower NII (down 7% YoY). Headline asset quality was largely stable with GNPA ratio at 12.5% (down 4 bps QoQ) with ~18% coverage ratio.

Power Finance Corporation Ltd Q1FY18 results comment Operating Income grew by 22.96% to Rs. 6779.82 Cr in Q1FY18 when compared to the previous quarter

PFC posted a loss of Rs 34 bn in Q4FY17 on surge in provisions. Provisions rose, as PFC migrated from MoP/GoI approved prudential norms to RBI prudential norms in Q4.

Operating Income decreased by 19.24% to Rs. 5513.77 Cr in Q4FY17 when compared to the previous quarter.

Q3FY17 PAT at Rs 19.5 bn (up 23.3% YoY) was higher than our estimate primarily due to lower provisions (down 75% YoY on favourable base) and higher translation/actual exchange gain on forex borrowings. Asset quality improved with absolute GNPAs down by ~4% QoQ and GNPA ratio down by 14 bps QoQ at...

India is the 5th largest electricity generation and consumption country in the world. As per the U.S. Energy Information Administration, India accounts for around 4.6% of the world's electricity generation capacity and 3.9% of the world electricity consumption as of 2011. Power is considered to be a one of the core industry as it facilitates development across various sectors of the Indian economy. The per capita electricity consumption in India has witnessed a CAGR of 5.5% over FY06-13. The demand for the electricity has always outpaced the supply resulting in an average energy deficit of around 9% over the past 10 years. We believe this is mainly after rising per capita consumption and under achievement of the...

Asset quality healthy; gross NPLs at 1.04% poised to tap the government's thrust on the power sector. PFC is the nodal agency for UMPPs. The company offers...

Company snapshot: Power Finance Corporation Limited is engaged in power sector financing, and the integrated development of the power and associated sectors. The Company provides a range of financial products and...

susceptible to volatile earnings unlike other players in the financial space. Traction in balance sheet and earnings are amongst the standout qualities as compared to other players in the financials space. We rate the stock an OUTPERFORMER with a target price of Rs 252. Key risks...

in the global markets, PFC increased its exposure to low cost foreign Background: Power Finance Corporation Bank (PFC) has a market share of about 20% in the power lending industry. Backed by expertise in appraising projects and its status as a state-owned financing firm; the company is well poised to tap the government's thrust on the power sector. PFC is the nodal agency for UMPPs. The company offers the...

pile of sanctions with the outstanding sanctions book at 1.65X its loan book. The loan book stood at Rs 1,04,050 crore while the borrowings book was reported at Rs 86,500 crore. With adequate cash on its books Background: Power Finance Corporation Bank (PFC) has a market share of about 20% in the power lending industry. Backed by expertise in appraising projects and its status as a state-owned financing firm; the company...