PFC Share Price

Power Finance Corporation (PFC) Shares Surge 9% on Strong Q2 FY25 Results

State-owned Power Finance Corporation Ltd. (PFC) saw its stock rally nearly 9% to ₹480 on the Bombay Stock Exchange (BSE) on Monday. The surge followed the announcement of PFC’s financial results for the September 2024 quarter, with a reported consolidated net profit increase of nearly 9% year-over-year, reaching ₹7,214.90 crore. In the same quarter last year, PFC posted a net profit of ₹6,628.17 crore, demonstrating the company’s robust growth trajectory.

Revenue and Profit Growth in Q2 FY25

PFC’s revenue from operations increased by 15% year-over-year to ₹25,721.8 crore in Q2 FY25, compared to ₹22,374.6 crore in the previous fiscal period. This revenue growth underscores the corporation’s effective operational strategies, primarily driven by a focus on loan disbursement expansion and strategic asset growth.

EBITDA and Loan Book Expansion

At the operating level, PFC’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose 10.5% to ₹25,354.2 crore for Q2 FY25, up from ₹22,942.4 crore in the corresponding quarter of the previous fiscal year. Additionally, PFC reported a 13% growth in its consolidated loan asset book, which increased from ₹9,23,724 crore as of September 30, 2023, to ₹10,39,472 crore by September-end 2024.

Positive Broker Ratings Fuel Stock Growth

Following these impressive Q2 results, brokerage firm Bernstein reiterated its ‘Outperform’ rating for PFC, setting a target price of ₹620. In its Q2 FY25 analysis, Bernstein noted PFC’s focus on core operations and strategic financial decisions, including enhanced loan disbursement and improved asset quality. Net interest margins (NIMs) and returns have also seen positive growth, reflecting a strong performance for the company this quarter.

Global brokerage CLSA echoed a positive sentiment, also maintaining an ‘Outperform’ rating with a target price of ₹610. CLSA highlighted that loan disbursals have shown a healthy uptick following a slower Q1, although loan growth remains somewhat tempered due to high repayment volumes. The net profit was further bolstered by a write-back from Lanco, and PFC noted a rise in thermal capex sanctions, even as it decided not to proceed with a loan to Shapoorji.

Interim Dividend Declared

Adding to the positive news, PFC’s board has declared a second interim dividend of ₹3.50 per equity share, amounting to 35% on the face value of each ₹10 equity share for FY 2024-25. This announcement reflects PFC’s commitment to delivering value to shareholders amidst a strong financial year.

Conclusion:

Power Finance Corporation’s Q2 FY25 results highlight a solid performance, driven by increased loan disbursement and effective revenue strategies. With improved asset quality, expanded loan assets, and enhanced net interest margins, PFC demonstrates a resilient growth trajectory in India’s financial sector. PFC Share Price, The positive response from brokerages like Bernstein and CLSA, along with a declared interim dividend, further indicates PFC’s ongoing commitment to creating value for its shareholders.

FAQs:

1.What was PFC’s net profit in Q2 FY25?

A. PFC reported a consolidated net profit of ₹7,214.90 crore for Q2 FY25, marking a 9% increase year-over-year.

2.How much did PFC’s revenue grow in Q2 FY25?

A. The revenue from operations grew 15% year-over-year to ₹25,721.8 crore.

3.What is PFC’s EBITDA for Q2 FY25?

A. PFC’s EBITDA was up 10.5% to ₹25,354.2 crore in Q2 FY25.

4.What factors contributed to PFC’s profit growth?

A. Profit growth was driven by higher revenues, increased loan disbursement, and strategic asset quality improvements.

5.What are the brokerage ratings for PFC following Q2 results?

A. Both Bernstein and CLSA maintained ‘Outperform’ ratings with target prices of ₹620 and ₹610, respectively.

6.What was the growth in PFC’s loan asset book?

A. The loan asset book grew by 13% from ₹9,23,724 crore to ₹10,39,472 crore.

7.What dividend has PFC announced for FY25?

A. PFC declared a second interim dividend of ₹3.50 per equity share, which is 35% on the ₹10 face value.

8.How did PFC’s loan disbursements perform in Q2 FY25?

A. Loan disbursements picked up in Q2 FY25 following a slower Q1, reflecting PFC’s focused disbursement strategy.

9.What were the notable contributions to net profit this quarter?

A. A significant write-back from Lanco and increased thermal capex sanctions supported the quarter’s net profit.

10.How did PFC’s stock react to the Q2 FY25 results?

A. PFC shares rallied nearly 9% on the BSE, trading as high as ₹480, reflecting investor confidence.

PFC Share Price

Asian Paints Stock Tumbles 9% After Disappointing Q2 Results