The company has showed slight improvement in Net Interest Margin (NIM) to 3.63% in Q3FY2021 from 3.28% in Q3FY2020. The interest spreads of the company improved to 3.20% in Q3FY2021 from 3.09% in the preceding quarter and 2.91% in the corresponding quarter last year.

Quarterly performance

The company has posted 15% increase in Income from operations at Rs 9327.18 crore in the quarter ended December 2020. Other income zoomed 1022% to Rs 758.60 crore on account of dividend income of Rs 644 crore. Total income increased 23% to Rs 10085.78 crore in the quarter ended December 2020. The interest expense rose 7% to Rs 5885.11 crore.

The employee expenses increased 12% to Rs 52.19 crore, while the other expenditures worth Rs 43.48 crore is written back in the quarter ended December 2020.

The ensuing Gross Profit stood at Rs 4191.96 crore in the quarter ended December 2020, showing an increase of 79% on yoy basis.

The depreciation during the quarter under review stood at Rs 3.16 crore down from Rs 2.46 crore in Q3FY2020.

The Profit before Tax increased 17% to Rs 2791.59 crore in the quarter ended December 2020. An effective tax rate was lower at 16.4% in Q3FY2021 compared with 29.9% in Q3FY2020. PAT increased 39% to Rs 2332.79 crore in Q3FY2021 over Q3FY2020.

Highlights:

Loan assets of the company increased 10% to Rs 365031 crore at end December 2020 compared to Rs 332962 crore at end December 2019. Within the loan book, the generation loan book was flat yoy at Rs 234135 crore, while transmission loan book moved up 10% to Rs 30378 crore and distribution jumped 42% to Rs 98388 crore at end December 2020. As per the borrower segment wise classification, the private sector loan book rose 7% to Rs 58988 crore, while the government sector loan book jumped 10% to Rs 306043 crore end December 2020.

Disbursement of the company (excluding R-APDRP) declined 25% to Rs 13847 crore in Q3FY2021 compared to Rs 18413 crore in Q3FY2020, as the generation disbursement dipped 85% to Rs 1763 crore, while transmission disbursements also fell 31% to Rs 1104 crore. However, the distribution disbursements jumped 128% to Rs 10959 crore in Q3FY2021. As per the borrower segment wise classification, the private sector disbursements declined 31% to Rs 1050 crore, while the government sector disbursements also declined 24% to Rs 12797 crore in Q3FY2021.

Outstanding Borrowings increased by 12% to Rs 324189 crore at end December 2020, driven by bonds borrowing rising 8% to Rs 255069 crore at end December 2020. Term loans galloped 35% to Rs 66070 crore, while short-term loans were flat at Rs 3050 crore at end December 2020.

NIM of the company increased 35 bps yoy to 3.63% in Q3FY2021. The yield on assets rose 2 bps to 10.68%, while cost of funds dipped 27 bps yoy to 7.48%.

The gross stage 3 asset declined to 5.85% end December 2020 from 7.15% a quarter ago, which entirely related to private sector exposure. Net stage 3 asset also declined to 2.30% end December 2020 from 3.12% a quarter ago.

Capital Adequacy Ratio stood at 20.21% at end December 2020 compared to 19.32% a year earlier.

Book value of the company stood at Rs 197.02 per share at end December 2020. Adjusted Book value (net of net stage 3 assets) stood at Rs 165.25 per share at end December 2020.

Financial Performance 9MFY2021

For nine months ended December 2020 (9MFY2021), Power Finance Corporation reported 15% increase in Income from Operations at Rs 27270.10 crore, while interest expense increased 7% to Rs 17390.71 crore, leading to a 34% rise in NII to Rs 9879.39 crore. Other income increased 436% to Rs 822.05 crore. The Staff cost declined 3% to Rs 150.81 crore, while the other expenditure dipped 42% to Rs 426.22 crore. The ensuing Gross Profit moved up 53% to Rs 10124.41 crore in 9MFY2021. The Depreciation stood at Rs 7.50 crore, while provisions increased 384% to Rs 2703.42 crore in 9MFY2021. The profit before Tax to moved up 22% to Rs 7413.49 crore in 9MFY2021. The Tax expense declined 30% to Rs 1296.09 crore. PAT improved 45% to Rs 6117.40 crore in 9MFY2021.