The company has showed improvement in Net Interest Margin (NIM) to 3.28% in Q3FY2020 from 3.13% in the preceding quarter. The interest spreads of the company improved to 2.91% in Q3FY2020 from 2.78% in the preceding quarter and 2.68% in the corresponding quarter last year.

Quarterly performance

The company has posted 12% increase in Income from operations at Rs 8144.03 crore in the quarter ended December 2019. Other income dipped 47% to Rs 67.59 crore. Total income increased 11% to Rs 8211.62 crore in the quarter ended December 2019. The interest expense increased 15% to Rs 5495.49 crore.

The employee expenses declined 1% to Rs 46.75 crore, while the other expenditures surged 443% to Rs 324.82 crore in the quarter ended December 2019.

The ensuing Gross Profit stood at Rs 2344.56 crore in the quarter ended December 2019, showing a decline of 6% on yoy basis.

The depreciation during the quarter under review stood at Rs 2.46 crore up from Rs 1.65 crore in Q3FY2019.

The Profit before Tax declined 14% to Rs 2395.45 crore in the quarter ended December 2019. An effective tax rate was higher at 29.9% in Q3FY2020 compared with 24.8% in Q3FY2019. PAT fell 19% to Rs 1680.12 crore in Q3FY2020 over Q3FY2019.

Performance Highlights:

Loan assets of the company increased 12% to Rs 332962 crore at end December 2019 compared to Rs 298128 crore at end December 2018.

Within the loan book, the generation loan book moved up 8% to Rs 233245 crore, while transmission loan book gained 14% to Rs 27555 crore and distribution jumped 24% to Rs 69410 crore at end December 2019.

As per the borrower segment wise classification, the private sector loan book rose 7% to Rs 55218 crore, while the government sector loan book jumped 13% to Rs 277744 crore end December 2019.

Disbursement of the company increased 26% to Rs 18413 crore in Q3FY2020 compared to Rs 14648 crore in Q3FY2019, as the generation disbursement moved up 51% to Rs 11936 crore, while transmission disbursements rose 1% to Rs 1610 crore. However, the distribution disbursements declined 3% to Rs 4811 crore in Q3FY2020.

As per the borrower segment wise classification, the private sector disbursements jumped 90% to Rs 1531 crore, while the government sector disbursements increased 22% to Rs 16882 crore in Q3FY2020.

Outstanding borrowings increased by 16% to Rs 289264 crore at end December 2019, driven by bonds borrowing rising 16% to Rs 237103 crore at end December 2019. Term loans moved up 31% to Rs 49101 crore, while short-term loans declined 54% to Rs 3061 crore at end December 2019.

NIM of the company declined 14 bps yoy to 3.28% in Q3FY2020. The yield on assets rose 1 bps to 10.66%, while cost of funds dipped 22 bps yoy to 7.75%.

The gross stage 3 asset declined to 8.34% end December 2019, which entirely related to private sector exposure. Net stage 3 asset also declined to 3.94% end December 2019.

Capital Adequacy Ratio stood at 19.32% at end December 2019 compared to 18.95% a year earlier.

Book value of the company stood at Rs 178.9 per share at end December 2019. Adjusted Book value (net of net stage 3 assets) stood at Rs 129.2 per share at end December 2019.

Financial Performance 9MFY2020

For nine months ended December 2019 (9MFY2020), Power Finance Corporation reported 14% increase in Income from Operations at Rs 23665.16 crore, while interest expense increased 16% to Rs 16301.11 crore, leading to a 10% rise in NII to Rs 7307 crore. Other income declined 41% to Rs 153.32 crore. The Staff cost fell 2% to Rs 173.57 crore, while the other expenditure rose 8% to Rs 654.67 crore. The ensuing Gross Profit moved up 1% to Rs 6629.45 crore in 9MFY2020. The Depreciation stood at Rs 6.20 crore, while provisions were Rs 558.52 crore in 9MFY2020. The profit before Tax to declined 12% to Rs 6064.73 crore in 9MFY2020. The Tax expense declined 11% to Rs 1844.59 crore. PAT dipped 13% to Rs 4220.14 crore in 9MFY2020.