Power
Finance Corporation conducted a conference call on 29 May 2023 to discuss its
financial results for the quarter ended March 2023. Ravinder Singh Dhillon, CMD
of the company addressed the call:
Highlights:
The
financial year 2023 was a year of revival for the Indian economy and Power
Finance Corporation. The economic environment is looking more optimistic than
expected.
The
company has recorded highest ever standalone net profit of Rs 11600 crore in
FY2023 recording a growth of 16% over FY2022. The focus is always on maximizing
returns for the shareholders.
The
company has witnessed 20 bps increase in cost of funds to 7.51% in FY2023 on
account of market increase interest rates. Spreads stood at 2.53% and net
interest margin at 3.36% for FY2023, which are in line with the guided range of
the company.
The capital
adequacy ratio is healthy at 24.37% with Tier I ratio of 21.61% end March 2023.
The consolidated
loan book of the company has a crossed Rs 8 lakh crore mark end March 2023.
The disbursements
of the company have jumped 57% to Rs 85760 crore in FY2023 up from Rs 51240 crore
in FY2022.
The
loan book of the company has increased 13% to Rs 422500 crore end March 2023
from Rs 373000 crore end March 2023. The company is optimistic about the growth
outlook and expects similar level of double digit loan growth for FY2024.
The
continuous active resolution of stressed assets has helped the company to
improve its asset quality in FY2023.
The
company has resolved 3 stressed sets with the exposure of Rs 4400 crore in FY2023,
which includes South East UP Power Transmission, Jhabua Power and Ind Bharat Energy
Utkal.
The
company has reduced stressed assets by 21% to Rs 16500 crore end March 2020 3
from Rs 20900 crore end March 2022.
The
company has reduced net NPA ratio by 69 bps to 1.07% and gross NPA by 170 bps to
3.91% end March 2023.
The
company the company has 22 projects with exposure of Rs 16500 crore under stage
3, of which 13 projects with the exposure of Rs 13900 crore are being resolved
under NCLT and balance 9 projects with the exposure of Rs 2600 crore are being
resolved outside NCLT.
With
the resolution of stressed assets, the company witnessed reversals of
provisions without any additional provisioning for FY2023. The company also raised
provision coverage ratio on stage 3 assets from 69% to 78%.
The
company raised borrowings of Rs 76000 crore in FY2023. The outstanding borrowings
of the company increased to Rs 362630 crore end March 2023.
The
company has approved borrowings of Rs 80000 crore for FY2024 through various
domestic and foreign sources.
On the
domestic front, the company has witnessed sharp increase in 54 EC bonds to Rs 6600
crore from Rs 4000 crore last year.
The
company raised the foreign borrowings of US$ 1.66 billion in FY2023. The
company has hedged 92% of the exchange rate risk on foreign currency borrowings.
The balance sheet is adequately protected against foreign exchange fluctuations.
The
company would continue to tap the renewal energy opportunity. The company has
refinanced the loan of Rs 6112 crore for renewable energy project to JSW
Energy.
The company
along with REC has been nodal agency for Revamped Distribution Sector Scheme (RDSS)
which has Rs 3 lakh crore of outlay.
PFC now
also lending to Infrastructure sector, which is a long-term strategic
initiative aimed at portfolio diversification and loan asset book growth. It can
lend up to 30% of outstanding loan book, subject to 2/3rdnew sanctions in a
financial year towards power sector
PFC
sanctioned Rs 16647 crore and disbursed Rs 1016 crore till 31 March 2023 with key
areas sanctioned includes port, irrigation, oil refinery, fiber net
infrastructure etc.
The company
has sanction pipeline of Rs 231600 crore which would be disbursed over next 3
years. The company has also signed MOUs of Rs 90000 crore in FY23 with states
for financing the power sector value chains. These states includes AP, UP, MP,
Kerala etc.
The company
cut lending rates by 165-300 bps earlier. However, the company has raised
lending rate by 10-15 bps in December 2022 and another 25 bps in March 2023.
The loans
of the company are reset in 3 years and about one-third of the book will reset
in FY2024.
The company
expects to maintain stable margins for FY2024.
The company charges 20 bps lower rate if government guarantees
are available.
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