Capitaline

Results 26-May-22

Analysis

Power Finance Corporation

Loan growth subdued at 1%

Power Finance Corporation has reported 12% growth in the net profit to Rs 2609.45 crore in the quarter ended March 2022 (Q4FY2022). Net Interest Income (NII) of the company increased at accelerated pace of 10% to Rs 3366 crore, while the company has exhibited improved in asset quality in Q4FY2022. The company has showed improvement in Net Interest Margin (NIM) to 3.55% in Q4FY2022 from 3.30% in the corresponding quarter last year. The interest spreads of the company eased to 2.85% in Q4FY2022 from 3.03% in the preceding quarter and 3.03% in the corresponding quarter last year.

Quarterly performance

The company has posted 1% increase in Income from operations at Rs 8938.03 crore in the quarter ended March 2022. Other income improved 17% to Rs 936.37 crore. Total income increased 2% to Rs 9874.40 crore in the quarter ended March 2022. The interest expenses declined 4% to Rs 5572.06 crore.

The employee expenses jumped 28% to Rs 55.93 crore, while the other expenditures also zoomed 193% to Rs 691.73 crore in the quarter ended March 2022.

The ensuing Gross Profit stood at Rs 3554.68 crore in the quarter ended March 2022, showing a decline of 1% on yoy basis.

The depreciation during the quarter under review stood at Rs 2.85 crore down from Rs 3.67 crore in Q4FY2021. Provisions dipped 56% to Rs 351.75 crore in Q4FY2022.

The Profit before Tax increased 15% to Rs 3200.08 crore in the quarter ended March 2022. An effective tax rate was higher at 18.5% in Q4FY2022 compared with 16.7% in Q4FY2021. PAT increased 12% to Rs 2609.45 crore in Q4FY2022 over Q4FY2021.

Highlights:

Loan assets of the company increased 1% to Rs 373135 crore at end March 2022 compared to Rs 370771 crore at end March 2021.Within the loan book, the generation loan book declined 7% to Rs 212212 crore, while transmission loan book moved up 4% to Rs 30500 crore and distribution increased 14% to Rs 128007 crore at end March 2022. As per the borrower segment wise classification, the private sector loan book was flat at Rs 59131 crore, while the government sector loan book rose 1% to Rs 314004 crore end March 2022.

Disbursement of the company declined 41% to Rs 16651 crore in Q4FY2022 compared to Rs 28357 crore in Q4FY2021, as the generation disbursement dipped 31% to Rs 5679 crore, while the distribution disbursements plunged 54% to Rs 8717 crore in Q4FY2022. Transmission disbursements moved up 57% to Rs 2126 crore. As per the borrower segment wise classification, the private sector disbursements declined 9% to Rs 2506 crore, while the government sector disbursements dipped 45% to Rs 14145 crore in Q4FY2022.

Outstanding Borrowings declined 2% to Rs 320128 crore at end March 2022, driven by 2% fall in bonds borrowing to Rs 254137 crore at end March 2022. Term loans increased 8% to Rs 65762 crore, while short-term loans dipped 94% to Rs 229 crore at end March 2022.

NIM of the company rose 25 bps yoy to 3.55% in Q4FY2022. The yield on assets eased 38 bps to 9.90%, while cost of funds dipped 20 bps yoy to 7.05%.

The gross stage 3 asset declined to 5.61% end March 2022 from 6.06% a quarter ago, which entirely related to private sector exposure. Net stage 3 asset also declined to 1.76% end March 2022 from 2.00% a quarter ago.

Capital Adequacy Ratio stood at 23.48% at end March 2022 compared to 18.83% a year earlier.

Book value of the company stood at Rs 224.8 per share at end March 2022. Adjusted Book value (net of net stage 3 assets) stood at Rs 199.9 per share at end March 2022.

Financial Performance FY2022

For year ended March 2022 (FY2022), Power Finance Corporation reported 2% increase in Income from Operations at Rs 36701.22 crore, while interest expense declined 2% to Rs 22671.30 crore, leading to a 8% rise in NII to Rs 14029.92 crore. Other income increased 17% to Rs 1889.95 crore. The Staff cost rose 10% to Rs 213.11 crore, while the other expenditure jumped 88% to Rs 1243.77 crore. The ensuing Gross Profit moved up 5% to Rs 14462.99 crore in FY2022. The Depreciation stood at Rs 13.20 crore, while provisions dipped 36% to Rs 2222.14 crore in FY2022. The profit before Tax to increased 20% to Rs 12227.65 crore in FY2022. The Tax expense increased 25% to Rs 2205.75 crore. PAT improved 19% to Rs 10021.90 crore in FY2022.

Power Finance Corporations: Standalone Results
Particulars	2203 (3)	2103 (3)	Var %	2203 (12)	2103 (12)	Var %
Income from operations	8938.03	8875.66	1	36701.22	36145.76	2
Other Income	936.37	798.76	17	1889.95	1620.81	17
Total Income	9874.40	9674.42	2	38591.17	37766.57	2
Interest Expenses	5572.06	5803.78	-4	22671.30	23194.49	-2
Other expenses	747.66	280.17	167	1456.88	857.20	70
Gross profit	3554.68	3590.47	-1	14462.99	13714.88	5
Depreciation	2.85	3.67	-22	13.20	11.17	18
Provisions	351.75	792.98	-56	2222.14	3496.40	-36
Profit before tax	3200.08	2793.82	15	12227.65	10207.31	20
Provision for tax	590.63	467.21	26	2205.75	1763.30	25
Net profit	2609.45	2326.61	12	10021.90	8444.01	19
EPS*(Rs)	39.5	35.3		38.0	32.0
* Annualized on current equity of Rs 2640.08 crore. Face Value: Rs 10, figures in Rs Crore
Source: Capitaline Corporate Database

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