The company has showed jump in Net Interest Margin (NIM) to 3.69% in Q2FY2021 from 3.48% in the preceding quarter. The interest spreads of the company improved to 3.09% in Q2FY2021 from 3.00% in the preceding quarter and 2.78% in the corresponding quarter last year.

Quarterly performance

The company has posted 15% increase in Income from operations at Rs 9193.91 crore in the quarter ended September 2020. Other income improved 10% to Rs 38.04 crore. Total income increased 15% to Rs 9231.95 crore in the quarter ended September 2020. The interest expense increased 7% to Rs 5829.42 crore.

The employee expenses declined 19% to Rs 48.07 crore, while the other expenditures were negative at Rs 96.66 crore in the quarter ended September 2020.

The ensuing Gross Profit stood at Rs 3451.12 crore in the quarter ended September 2020, showing an increase of 63% on yoy basis.

The depreciation during the quarter under review stood at Rs 2.40 crore down from Rs 2.02 crore in Q2FY2020.

The provisions surged 144% to Rs 953.17 crore in Q2FY2021. The Profit before Tax moved up 44% to Rs 2495.55 crore in the quarter ended September 2020. An effective tax rate dipped to 16.4% in Q2FY2021 compared with 33.1% in Q2FY2020. PAT increased 80% to Rs 2085.05 crore in Q2FY2021 over Q2FY2020.

Highlights:

Loan assets of the company increased 14% to Rs 371158 crore at end September 2020 compared to Rs 325434 crore at end September 2019. Within the loan book, the generation loan book moved up 8% to Rs 247099 crore, while transmission loan book increased 13% to Rs 30216 crore and distribution jumped 36% to Rs 91706 crore at end September 2020. As per the borrower segment wise classification, the private sector loan book rose 8% to Rs 61141 crore, while the government sector loan book jumped 15% to Rs 310017 crore end September 2020.

Disbursement of the company (excluding R-APDRP) galloped 57% to Rs 28825 crore in Q2FY2021 compared to Rs 18366 crore in Q2FY2020, as the distribution disbursements jumped 126% to Rs 17526 crore in Q2FY2021. The generation disbursements moved up 13% to Rs 9855 crore, while transmission disbursements fell 18% to Rs 1382 crore.

As per the borrower segment wise classification, the private sector disbursements galloped 113% to Rs 3016 crore, while the government sector disbursements surged 52% to Rs 25809 crore in Q2FY2021.

Outstanding Borrowings increased by 15% to Rs 324045 crore at end September 2020, driven by bonds borrowing rising 9% to Rs 252627 crore at end September 2020. Term loans moved up 41% to Rs 66070 crore, while short-term loans jumped 40% to Rs 5348 crore at end September 2020.

NIM of the company jumped 56 bps yoy to 3.69% in Q2FY2021. The yield on assets rose 10 bps to 10.70%, while cost of funds dipped 21 bps yoy to 7.61%.

The gross stage 3 asset declined to 7.15% end September 2020 from 7.50% a quarter ago, which entirely related to private sector exposure. Net stage 3 asset also declined to 3.12% end September 2020 from 3.41% a quarter ago.

Capital Adequacy Ratio stood at 18.18% at end September 2020.

Book value of the company stood at Rs 187.03 per share at end September 2020. Adjusted Book value (net of net stage 3 assets) stood at Rs 143.11 per share at end September 2020.

Financial Performance H1FY2021

For six months ended September 2020 (H1FY2021), Power Finance Corporation reported 16% increase in Income from Operations at Rs 17942.92 crore, while interest expense increased 6% to Rs 11505.60 crore, leading to a 36% rise in NII to Rs 6437.32 crore. Other income declined 26% to Rs 63.45 crore. The Staff cost declined 10% to Rs 98.62 crore, while the other expenditure jumped 15% to Rs 469.70 crore. The ensuing Gross Profit moved up 38% to Rs 5932.45 crore in H1FY2021. The Depreciation stood at Rs 4.34 crore, while provisions increased 113% to Rs 1306.21 crore in H1FY2021. The profit before Tax to moved up 26% to Rs 4621.90 crore in H1FY2021. The Tax expense declined 26% to Rs 837.29 crore. PAT improved 49% to Rs 3784.61 crore in H1FY2021.