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Results
06-Aug-24
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Analysis
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Power Finance Corporation
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Loan growth moderates to 10%, margins and asset quality remains healthy
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Power Finance Corporation has reported 24% growth
in the net profit to Rs 3717.88 crore in the quarter ended June 2024
(Q1FY2025). Net Interest Income (NII) of the company surged 24% to Rs 4328 crore,
while the company has maintained stable asset quality in Q1FY2025.
The company has showed improvement
in in Net Interest Margin (NIM) to 3.55% in Q1FY2025 from 3.46% in the
preceding quarter and 3.36% in Q1FY2024. The interest spreads of the company improved to 2.64% in
Q1FY2025 from 2.51% in the corresponding quarter last year.
Quarterly performance
The company has posted 17%
increase in Income from operations at Rs 11827.03 crore in the quarter ended
June 2024. Other income improved 393% to Rs 89.21 crore. Total income increased
17% to Rs 11916.24 crore in the quarter ended June 2024. The interest expense
increased 13% to Rs 7499.01 crore.
The employee expenses rose
8% to Rs 62.87 crore, while there was write of other expenses amounting to Rs 250.61
crore in the quarter ended June 2024.
The ensuing Gross Profit
stood at Rs 4604.97 crore in the quarter ended June 2024, showing an increase
of 25% on yoy basis.
The depreciation during
the quarter under review stood at Rs 3.68 crore from Rs 3.64 crore in Q1FY2024.
The Profit before Tax increased
24% to Rs 4539.27 crore in the quarter ended June 2024. An effective tax rate
was steady at 18.1% in Q1FY2025 compared with 18.1% in Q1FY2024. PAT increased 24%
to Rs 3717.88 crore in Q1FY2025 over Q1FY2024.
Highlights:
Loan assets of the
company increased 10% to Rs 475004.05 crore at end June 2024 compared to Rs 432339
crore at end June 2023. Within
the loan book, the generation loan book moved up 1% to
Rs 230124 crore, while transmission loan book increased 8% to Rs 35214 crore and distribution jumped 14% to Rs 190617 crore at end June 2024.
As per the borrower segment wise
classification, the private sector loan book surged 23% to Rs 91969.05 crore, while the government sector loan book rose 7%
to Rs 383035 crore end June 2024.
Disbursement of the
company declined 15% to Rs 19483 crore in Q1FY2025 compared
to Rs 22792 crore in Q1FY2024, as transmission
disbursements fell 64% to Rs 752 crore and the
distribution disbursements also fell 23% to Rs 11488 crore
in Q1FY2025. The generation disbursement moved up 6% to Rs 5396 crore and other disbursements have galloped 198%
to Rs 1847 crore.
As per the borrower segment wise
classification, the private sector disbursements jumped 67% to Rs 4856 crore, while the government sector
disbursements declined 26% to Rs 14627 crore in
Q1FY2025.
Outstanding borrowings
increased by 9% to Rs 399785 crore at end June 2024, driven by bonds borrowing
rising 11% to Rs 325488 crore at end June 2024. Term loans rose 8% to Rs 72874 crore,
while short-term loans dipped 76% to Rs 1423 crore at end June 2024.
NIM of the company increased
21 bps yoy to 3.55% in Q1FY2025. The yield on assets moved up 23 bps to 10.08%,
while cost of funds rose 10 bps yoy to 7.44%.
The gross stage 3 asset rose
slightly to 3.38% end June 2024 from 3.34% a quarter ago, which entirely
related to private sector exposure. Net stage 3 asset was at 0.87% end June
2024 from 0.85% a quarter ago. The provisions coverage ratio stood at 74% end
June 2024.
Capital Adequacy Ratio
stood at 27.10% at end June 2024 compared to 25.08% a year earlier.
Book value of the company stood at Rs 252.3 per share at end June 2024. Adjusted
Book value (net of net stage 3 assets) stood at Rs 239.9 per share at end June
2024.
Financial Performance
FY2024
For the year ended March
2024 (FY2024), Power Finance Corporation reported 16% increase in Income from
Operations at Rs 43641.14 crore, while interest expense increased 20% to Rs
28013.78 crore, leading to a 9% rise in NII to Rs 15627.36 crore.
Other income increased
18% to Rs 2392.96 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 26% to Rs 17472.94 crore in FY2024.
The Depreciation stood
at Rs 18.40 crore, while provisions were written back amounting to Rs 171.15
crore in FY2024. The profit before Tax increased 24% to Rs 17625.69 crore in
FY2024. The Tax expense increased 27% to Rs 3258.67 crore. PAT improved 24% to
Rs 14367.02 crore in FY2024.
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Power Finance Corporations: Standalone Results
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Particulars
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2406 (3)
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2306 (3)
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Var %
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2403 (12)
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2303 (12)
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Var %
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Income
from operations
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11827.03
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10124.08
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17
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43641.14
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37645.31
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16
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Other
Income
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89.21
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18.10
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393
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2392.96
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2020.32
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18
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Total
Income
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11916.24
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10142.18
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17
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46034.10
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39665.63
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16
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Interest
Expenses
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7499.01
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6620.69
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13
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28013.78
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23282.57
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20
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Other
expenses
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-187.74
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-155.34
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21
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547.38
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2489.59
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-78
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Gross
profit
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4604.97
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3676.83
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25
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17472.94
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13893.47
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26
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Depreciation
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3.68
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3.64
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1
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18.40
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19.06
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-3
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Provisions
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62.02
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2.15
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2785
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-171.15
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-296.21
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-42
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Profit
before tax
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4539.27
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3671.04
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24
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17625.69
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14170.62
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24
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Provision
for tax
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821.39
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664.10
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24
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3258.67
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2565.15
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27
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Net
profit
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3717.88
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3006.94
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24
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14367.02
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11605.47
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24
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EPS*(Rs)
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45.1
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36.4
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43.5
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35.2
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Adj BV
(Rs)
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239.9
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202.6
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227.5
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193.0
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* Annualized on current equity of Rs 3300.1 crore. Face Value: Rs 10,
figures in Rs Crore
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Source: Capitaline Corporate Database
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