The company has showed improvement in Net Interest Margin (NIM) to 3.48% in Q1FY2021 from 3.28% in the preceding quarter. The interest spreads of the company improved to 3.00% in Q1FY2021 from 2.96% in the preceding quarter and 2.71% in the corresponding quarter last year.

Quarterly performance

The company has posted 16% increase in Income from operations at Rs 8749.01 crore in the quarter ended June 2020. Other income declined 50% to Rs 25.41 crore. Total income increased 16% to Rs 8774.42 crore in the quarter ended June 2020. The interest expense increased 6% to Rs 5676.18 crore.

The employee expenses rose 1% to Rs 50.55 crore. However, the other expenditures zoomed to Rs 566.36 crore in the quarter ended June 2020 from Rs 2.72 crore in the quarter ended June 2019, mainly due to net translation/ transaction exchange loss of Rs 232.64 crore, loss on fair value change of Rs 114.53 crore and upfront corporate social responsibility of Rs 205.06 crore.

The ensuing Gross Profit stood at Rs 2481.33 crore in the quarter ended June 2020, showing an increase of 15% on yoy basis.

The depreciation during the quarter under review stood at Rs 1.94 crore up from Rs 1.72 crore in Q1FY2020. The provisions jumped 59% to Rs 353.04 crore.

The Profit before Tax moved up 10% to Rs 2126.35 crore in the quarter ended June 2020. An effective tax rate was lower at 20.1% in Q1FY2021 compared with 28.7% in Q1FY2020. PAT increased 23% to Rs 1699.56 crore in Q1FY2021 over Q1FY2020.

Highlights:

Loan assets of the company increased 12% to Rs 353595 crore at end June 2020 compared to Rs 316886 crore at end June 2019. Within the loan book, the generation loan book moved up 8% to Rs 243607 crore, while transmission loan book increased 16% to Rs 29958 crore and distribution jumped 24% to Rs 77923 crore at end June 2020.

As per the borrower segment wise classification, the private sector loan book rose 4% to Rs 58709 crore, while the government sector loan book jumped 13% to Rs 294886 crore end June 2020.

Disbursement of the company surged 65% to Rs 17271 crore in Q1FY2021 compared to Rs 10466 crore in Q1FY2020, as the generation disbursement moved up 68% to Rs 10909 crore, while transmission disbursements also moved up 88% to Rs 1657 crore. The distribution disbursements jumped 52% to Rs 4634 crore in Q1FY2021.

As per the borrower segment wise classification, the private sector disbursements declined 28% to Rs 2417 crore, while the government sector disbursements increased 109% to Rs 14854 crore in Q1FY2021.

Outstanding Borrowings increased by 11% to Rs 312833 crore at end June 2020, driven by bonds borrowing rising 15% to Rs 253023 crore at end June 2020. Term loans moved up 22% to Rs 54720 crore, while short-term loans dipped 67% to Rs 5090 crore at end June 2020.

NIM of the company moved up 42 bps yoy to 3.48% in Q1FY2021. The yield on assets rose 7 bps to 10.68%, while cost of funds dipped 22 bps yoy to 7.68%.

The gross stage 3 asset declined to 7.50% end June 2020 from 8.08% a quarter ago, which entirely related to private sector exposure. Net stage 3 asset also declined to 3.41% end June 2020 from 3.80% a quarter ago.

Capital Adequacy Ratio stood at 17.32% at end June 2020 compared to 17.84% a year earlier.

Book value of the company stood at Rs 177.80 per share at end June 2020. Adjusted Book value (net of net stage 3 assets) stood at Rs 132.12 per share at end June 2020.

Financial Performance FY2020

For the year ended March 2020 (FY2020), Power Finance Corporation reported 12% increase in Income from Operations at Rs 31950.42 crore, while interest expense increased 15% to Rs 21853.19 crore, leading to a 10% rise in NII to Rs 7307 crore. Other income increased 326% to Rs 1420.64 crore. The Staff cost fell 2% to Rs 173.57 crore, while the other expenditure increased 8% to Rs 654.67 crore. The ensuing Gross Profit moved up 3% to Rs 9192.86 crore in FY2020. The Depreciation stood at Rs 9.10 crore, while provisions increased to Rs 991.22 crore in FY2020. The profit before Tax to declined 17% to Rs 8192.54 crore in FY2020. The tax expense declined 11% to Rs 2537.40 crore. PAT fell 19% to Rs 5655.14 crore in FY2020.