AI-generated · cited to primary sources · not investment advice
Power Fin.Corpn. (532810) Feb 2025 Filing Analysis
Does management do what it says?
PFC received 100% principal recovery (Rs. 4,448 crore admitted claim) plus Rs. 1,192 crore in interest income, resulting in a recovery exceeding the admitted claim. (2 exceeded, 3 met across 5 tracked commitments)
“Talking about NPA assets, as shared in previous quarters, we are envisaging resolution in 3 projects of around INR4,961 crores.”
See the full cited Management analysis of Power Fin.Corpn.
How durable is the business?
Distribution has become the dominant driver of current disbursements, accounting for 60% of the total this quarter, largely driven by the RDSS scheme implementation. (4 expanding)
“Distribution still accounts for the major disbursement during the quarter at around 60% and the transmission and infrastructure at 7% and 4%.”
PFC is aggressively shifting its lending mix toward renewables, which now account for 63% of generation disbursements, while conventional power has shrunk to 37%. The renewable portfolio grew 28% YoY. (5 expanding)
“Our renewable energy portfolio saw 28% year-on-year growth and is currently around INR69,500 crores... out of the total, 28% disbursement on the generation side, the balance 63% is on the renewable and 37% is on the conventional side.”
PFC continues to scale its consolidated loan book, achieving 12% year-on-year growth, crossing the INR 10 lakh crore milestone. (1 expanding, 1 stable)
“The consolidated loan asset book stood at INR1,069,436 crores, a 12% year-on-year growth.”
PFC maintains a competitive cost of funds at 7.47%, allowing for a healthy spread of 2.60% despite market volatility. (3 stable)
“The cost of funds is at 7.47%. The spread and the NIM continue to be range bound at 2.60% and 3.65%.”
See the full cited Business Model analysis of Power Fin.Corpn.
What could break the thesis?
The risk remains stable but significant, with INR 13,000 crores of prepayments recorded in the first 9 months of FY25. Management views this as a common risk in the financing sector and notes that Q4 expected repayments are actually lower on a quarter-on-quarter basis. (1 stable)
“this financial year, we have in total of around INR13,000 crores of prepayments during the current 9 months.”
See the full cited Risk analysis of Power Fin.Corpn.
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