The current market price of Power Finance Corporation Ltd. is Rs 131.2. Time period given by analyst is one year when Power Finance Corporation Ltd. price can reach defined target.
Power Finance Corporation Ltd., incorporated in the year 1986, is a Large Cap company (having a market cap of Rs 33753.44 Crore) operating in Term Lending Institutions sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 18155.14 Crore, down -1.55 % from last quarter Total Income of Rs 18441.72 Crore and up 11.69 % from last year same quarter Total Income of Rs 16254.65 Crore. Company reported net profit after tax of Rs 3896.59 Crore in latest quarter.
Investment Rationale
Power Finance Corp (PFC) has reported Q4FY21 PAT of Rs23.3bn (flat QoQ), which was higher than expectations. PFC exited FY21 with Rs84.4bn PAT (compared to Rs56.5bn in FY20) – RoAs of 2.4%, credit cost of sub-1% and RoE of 17% plus. Stage- 3 assets, as guided, declined to 5.7% with resolution of four projects in FY21. There are other resolutions underway expected in H1FY22. Credit cost for FY21 settled sub-100bps as there was no incremental haircut required on resolved assets. Based on detailed account-by-account analysis, the brokerage further builds credit cost of 1.3%/0.6% for FY22E/FY23E, respectively. Lending rate cut with effect from April’21, coupled with incremental disbursements under tranche-2 of Atmanirbhar scheme, will weigh on NIMs leading us to revised earnings downwards. Repayment of some chunky generation projects and delayed project implementation has moderated portfolio growth. Final dividend (of Rs2 per share) has been announced, thereby, taking cumulative FY21 dividend towards 30% earnings payout.
Promoter/FII Holdings
Promoters held 56 per cent stake in the company as of March 31, 2021, while FIIs held 17.3 per cent, DIIs 19.6 per cent and public and others 7.1 per cent.
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