Capitaline

Results 09-Feb-24

Analysis

Power Finance Corporation

Loan growth at 16%

Power Finance Corporation has reported 12% growth in the net profit to Rs 3377.20 crore in the quarter ended December 2023 (Q3FY2024). Net Interest Income (NII) of the company jumped 16% to Rs 4157 crore, while the company has exhibited continuous improvement in asset quality in Q3FY2024.

The company has showed slight improvement in Net Interest Margin (NIM) to 3.42% in Q3FY2024 from 3.37% in the preceding quarter. The interest spreads of the company improved to 2.55% in Q3FY2024 from 2.51% in the preceding quarter and remained steady from 2.60% in the corresponding quarter last year.

Quarterly performance

The company has posted 18% increase in Income from operations at Rs 11331.26 crore in the quarter ended December 2023. Other income declined 34% to Rs 523.07 crore. Total income increased 14% to Rs 11854.33 crore in the quarter ended December 2023. The interest expense increased 20% to Rs 7173.51 crore.

The employee expenses rose 4% to Rs 63.66 crore, while the other expenditures also fell 73% to Rs 199.92 crore in the quarter ended December 2023.

The ensuing Gross Profit stood at Rs 4417.24 crore in the quarter ended December 2023, showing an increase of 24% on yoy basis.

The depreciation during the quarter under review stood at Rs 5.11 crore from Rs 5.01 crore in Q3FY2023. However, the provisions rebounded to charge of Rs 262.60 crore in Q3FY2024 from write backs of Rs 125.56 crore in Q3FY2023

The Profit before Tax increased 13% to Rs 4149.53 crore in the quarter ended December 2023. An effective tax rate was higher at 18.6% in Q3FY2024 compared with 18.3% in Q3FY2023. PAT increased 12% to Rs 3377.20 crore in Q3FY2024 over Q3FY2023.

Highlights:

Loan assets of the company increased 16% to Rs 457027 crore at end December 2023 compared to Rs 393387 crore at end December 2022. Within the loan book, the generation loan book moved up 7% to Rs 231424 crore, while transmission loan book gained 14% to Rs 32793 crore and distribution jumped 26% to Rs 182122 crore at end December 2023. As per the borrower segment wise classification, the private sector loan book surged 36% to Rs 83098 crore, while the government sector loan book increased 12% to Rs 373929 crore end December 2023.

Disbursement of the company declined 7% to Rs 23487 crore in Q3FY2024 compared to Rs 25178 crore in Q3FY2023, as the generation disbursement declined 16% to Rs 6080 crore, while the distribution disbursements fell 15% to Rs 13950 crore in Q3FY2024. However, transmission disbursements increased 25% to Rs 947 crore. As per the borrower segment wise classification, the private sector disbursements surged 66% to Rs 4776 crore, while the government sector disbursements declined 16% to Rs 18711 crore in Q3FY2024.

Outstanding Borrowings increased by 15% to Rs 393114 crore at end December 2023, driven by bonds borrowing rising 17% to Rs 317910 crore at end December 2023. Term loans rose 9% to Rs 73197 crore, while short-term loans dipped 47% to Rs 2007 crore at end December 2023.

NIM of the company declined 3 bps yoy to 3.42% in Q3FY2024. The yield on assets eased 8 bps to 10.02%, while cost of funds dipped 3 bps yoy to 7.47%.

The gross stage 3 asset declined to 3.52% end December 2023 from 3.67% a quarter ago, which entirely related to private sector exposure. Net stage 3 asset also declined to 0.90% end December 2023 from 1.00% a quarter ago.

Capital Adequacy Ratio stood at 26.86% at end December 2023 compared to 24.41% a year earlier.

Book value of the company stood at Rs 232.66 per share at end December 2023. Adjusted Book value (net of net stage 3 assets) stood at Rs 220.21 per share at end December 2023.

Financial Performance 9MFY2024

For the nine months ended December 2023 (9MFY2024), Power Finance Corporation reported 15% increase in Income from Operations at Rs 32147.41 crore, while interest expense increased 21% to Rs 20757.34 crore, leading to a 5% rise in NII to Rs 11390.07 crore. Other income increased 13% to Rs 1637.59 crore. The Staff cost rose 12% to Rs 185.11 crore, while the other expenditure dipped 97% to Rs 58.27 crore. The ensuing Gross Profit moved up 27% to Rs 12784.28 crore in 9MFY2024. The Depreciation stood at Rs 12.69 crore, while provisions declined 16% to Rs 165.87 crore in 9MFY2024. The profit before Tax to galloped 27% to Rs 12605.72 crore in 9MFY2024. The Tax expense increased 34% to Rs 2374.15 crore. PAT improved 26% to Rs 10231.57 crore in 9MFY2024.

Power Finance Corporations: Standalone Results
Particulars	2312 (3)	2212 (3)	Var %	2312 (9)	2212 (9)	Var %	2203 (12)	2103 (12)	Var %
Income from operations	11331.26	9566.20	18	32147.41	28028.63	15	36701.22	36701.22	0
Other Income	523.07	798.20	-34	1637.59	1450.77	13	2964.41	1889.95	57
Total Income	11854.33	10364.40	14	33785.00	29479.40	15	39665.63	38591.17	3
Interest Expenses	7173.51	5995.50	20	20757.34	17141.86	21	23282.57	22671.30	3
Other expenses	263.58	809.90	-67	243.38	2236.26	-89	2489.59	1456.88	71
Gross profit	4417.24	3559.00	24	12784.28	10101.28	27	13893.47	14462.99	-4
Depreciation	5.11	5.01	2	12.69	13.88	-9	19.06	13.20	44
Provisions	262.60	-125.56	-309	165.87	197.99	-16	-296.21	2222.14	-113
Profit before tax	4149.53	3679.55	13	12605.72	9889.41	27	14170.62	12227.65	16
Provision for tax	772.33	674.62	14	2374.15	1776.21	34	2565.15	2205.75	16
Net profit	3377.20	3004.93	12	10231.57	8113.20	26	11605.47	10021.90	16
EPS*(Rs)	40.9	36.4		41.3	32.8		35.2	30.4
Adj BV (Rs)	220.2	183.7		220.2	183.7		193.0	159.9
* Annualized on current equity of Rs 3300.1 crore. Face Value: Rs 10, figures in Rs Crore
Source: Capitaline Corporate Database

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