Capitaline

Results 15-May-24

Analysis

Power Finance Corporation

Margins and asset quality improves, loan growth at 14%

Power Finance Corporation has reported 18% growth in the net profit to Rs 4135.45 crore in the quarter ended March 2024 (Q4FY2024). Net Interest Income (NII) of the company surged 22% to Rs 4238 crore, while the company has exhibited further improvement in the asset quality in Q4FY2024.

The company has showed slight improvement in Net Interest Margin (NIM) to 3.46% in Q4FY2024 from 3.42% in the preceding quarter. The interest spreads of the company improved to 2.64% in Q4FY2024 from 2.55% in the preceding quarter and 2.53% in the corresponding quarter last year.

Quarterly performance

The company has posted 20% increase in Income from operations at Rs 11493.73 crore in the quarter ended March 2024. Other income improved 33% to Rs 755.37 crore. Total income increased 20% to Rs 12249.10 crore in the quarter ended March 2024. The interest expense moved up 18% to Rs 7256.44 crore.

The employee expenses rose 9% to Rs 57.61 crore, while the other expenditures jumped 23% to Rs 246.39 crore in the quarter ended March 2024.

The ensuing Gross Profit stood at Rs 4688.66 crore in the quarter ended March 2024, showing an increase of 24% on yoy basis.

The depreciation during the quarter under review stood at Rs 5.71 crore up slightly from Rs 5.18 crore in Q4FY2023.

The Profit before Tax increased 17% to Rs 5019.97 crore in the quarter ended March 2024. An effective tax rate was lower at 17.6% in Q4FY2024 compared with 18.4% in Q4FY2023. PAT increased 18% to Rs 4135.45 crore in Q4FY2024 over Q4FY2023.

Highlights:

Loan assets of the company increased 14% to Rs 481462 crore at end March 2024 compared to Rs 422498 crore at end March 2023. Within the loan book, the generation loan book moved up 2% to Rs 232131 crore, while transmission loan book moved up 13% to Rs 35144 crore and distribution jumped 23% to Rs 195002 crore at end March 2024. As per the borrower segment wise classification, the private sector loan book rose 26% to Rs 91936 crore, while the government sector loan book jumped 11% to Rs 389526 crore end March 2024.

Disbursement of the company (excluding R-APDRP) surged 25% to Rs 48607 crore in Q4FY2024 compared to Rs 38788 crore in Q4FY2023, as the distribution disbursements jumped 47% to Rs 26586 crore and others zoomed 211% to Rs 8565 crore in Q4FY2024. However, the generation disbursement declined 29% to Rs 10611 crore and transmission disbursements fell 5% to Rs 2845 crore. As per the borrower segment wise classification, the private sector disbursements declined 18% to Rs 10351 crore, while the government sector disbursements increased 47% to Rs 38256 crore in Q4FY2024.

Outstanding Borrowings increased by 12% to Rs 407382 crore at end March 2024, driven by bonds borrowing rising 13% to Rs 326018 crore at end March 2024. Term loans increased 13% to Rs 79003 crore, while short-term loans declined 41% to Rs 2361 crore at end March 2024.

NIM of the company rose 10 bps yoy to 3.46% in Q4FY2024. The yield on assets eased 3 bps to 10.01%, while cost of funds dipped 14 bps yoy to 7.37%.

The gross stage 3 asset declined to 3.34% end March 2024 from 3.52% a quarter ago, which entirely related to private sector exposure. Net stage 3 asset also declined to 0.85% end March 2024 from 0.90% a quarter ago.

Capital Adequacy Ratio stood at 25.41% at end March 2024 compared to 24.37% a year earlier.

Book value of the company stood at Rs 240.00 per share at end March 2024. Adjusted Book value (net of net stage 3 assets) stood at Rs 227.55 per share at end March 2024.

Financial Performance FY2024

For the year ended March 2024 (FY2024), Power Finance Corporation reported 16% increase in Income from Operations at Rs 43641.14 crore, while interest expense increased 20% to Rs 28013.78 crore, leading to a 9% rise in NII to Rs 15627.36 crore.

Other income increased 18% to Rs 2392.96 crore. The Staff cost rose 12% to Rs 185.11 crore, while the other expenditure dipped 97% to Rs 58.27 crore. The ensuing Gross Profit moved up 26% to Rs 17472.94 crore in FY2024.

The Depreciation stood at Rs 18.40 crore, while provisions were written back amounting to Rs 171.15 crore in FY2024. The profit before Tax increased 24% to Rs 17625.69 crore in FY2024. The Tax expense increased 27% to Rs 3258.67 crore. PAT improved 24% to Rs 14367.02 crore in FY2024.

Power Finance Corporations: Standalone Results
Particulars	2403 (3)	2303 (3)	Var %	2403 (12)	2303 (12)	Var %
Income from operations	11493.73	9616.68	20	43641.14	37645.31	16
Other Income	755.37	569.55	33	2392.96	2020.32	18
Total Income	12249.10	10186.23	20	46034.10	39665.63	16
Interest Expenses	7256.44	6140.71	18	28013.78	23282.57	20
Other expenses	304.00	253.33	20	547.38	2489.59	-78
Gross profit	4688.66	3792.19	24	17472.94	13893.47	26
Depreciation	5.71	5.18	10	18.40	19.06	-3
Provisions	-337.02	-494.20	-32	-171.15	-296.21	-42
Profit before tax	5019.97	4281.21	17	17625.69	14170.62	24
Provision for tax	884.52	788.94	12	3258.67	2565.15	27
Net profit	4135.45	3492.27	18	14367.02	11605.47	24
EPS*(Rs)	50.1	42.3		43.5	35.2
Adj BV (Rs)	227.5	193.0		227.5	193.0
* Annualized on current equity of Rs 3300.1 crore. Face Value: Rs 10, figures in Rs Crore
Source: Capitaline Corporate Database

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