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Results
14-Aug-21
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Analysis
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Power Finance Corporation
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Margins and asset quality improves, loan growth slows
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Power Finance Corporation has reported 34% growth
in the net profit to Rs 2273.59 crore in the quarter ended June 2021
(Q1FY2022). Net Interest Income (NII) of the company rise at an accelerated pace
of 15% to Rs 3525 crore, while the company has exhibited an improvement in asset
quality in Q1FY2022.
The company has also improved Net Interest
Margin (NIM) to 3.70% in Q1FY2022 from 3.30% in the preceding quarter. The
interest spreads of the company were nearly flat 2.96% in Q1FY2022 from 3.03% in
the preceding quarter and 3.00% in the corresponding quarter last year.
Quarterly performance
The company has posted 6% increase in income
from operations at Rs 9263.89 crore in the quarter ended June 2021. Other
income improved 145% to Rs 62.16 crore. Total income increased 6% to Rs 9326.05
crore in the quarter ended June 2021. The interest expense increased 1% to Rs 5739.31
crore.
The employee expenses declined 4% to Rs 48.51 crore,
while the other expenditures also fell 43% to Rs 325.35 crore in the quarter
ended June 2021.
The ensuing Gross Profit stood at Rs 3212.88 crore
in the quarter ended June 2021, showing an increase of 29% on yoy basis.
The depreciation during the quarter under review
stood at Rs 2.80 crore down from Rs 1.94 crore in Q1FY2021.
The Profit before Tax jumped 30% to Rs 2759.54 crore
in the quarter ended June 2021. An effective tax rate was lower at 17.6% in
Q1FY2022 compared with 20.1% in Q1FY2021. PAT increased 34% to Rs 2273.59 crore
in Q1FY2022 over Q1FY2021.
Highlights:
Loan assets of the company increased 5% to Rs 369983
crore at end June 2021 compared to Rs 353595 crore at end June 2020. Within the loan book, the generation loan book declined 7% to Rs 226166 crore and transmission loan book also
fell 5% to Rs 28472 crore, while distribution loan
book jumped 45% to Rs 113308 crore at end June 2021.
As per the borrower segment wise classification, the private
sector loan book rose 4% to Rs 61149 crore, while the
government sector loan book moved up 5% to Rs 308834 crore
end June 2021.
Disbursement of the company declined 32% to Rs 11728
crore in Q1FY2022 compared to Rs 17271 crore in Q1FY2021, as the generation disbursement dipped 42% to Rs 6356 crore, while transmission disbursements
also fell 69% to Rs 507 crore. The
distribution disbursements fell 4% to Rs 4465 crore
in Q1FY2022. As per the borrower segment wise classification, the
private sector disbursements increased 28% to Rs 3101
crore, while the government sector disbursements declined 45% to Rs 8231 crore in Q1FY2022.
Outstanding Borrowings rose 3% to Rs 323131 crore
at end June 2021, driven by bonds borrowing rising 1% to Rs 256741 crore at end
June 2021. Term loans moved up 16% to Rs 63280 crore, while short-term loans dipped
39% to Rs 3110 crore at end June 2021.
NIM of the company improved 22 bps yoy to 3.70% in
Q1FY2022. The yield on assets eased 29 bps to 10.39%, while cost of funds
dipped 25 bps yoy to 7.43%.
The gross stage 3 assets were stable at 5.72% end June 2021
from 5.70% a quarter ago, which entirely related to private sector exposure. Net
stage 3 asset declined to 2.00% end June 2021 from 2.09% a quarter ago.
Capital Adequacy Ratio stood at 21.16% at end
June 2021 compared to 17.32% a year earlier.
Book
value of the company stood at
Rs 207.34 per share at end June 2021. Adjusted Book value (net of net stage 3
assets) stood at Rs 179.32 per share at end June 2021.
Financial Performance FY2021
For year ended March 2021 (FY2021), Power
Finance Corporation reported 13% increase in Income from Operations at Rs
36145.76 crore, while interest expense increased 6% to Rs 23194.49 crore,
leading to a 28% rise in NII to Rs 12951.27 crore. Other income increased 14%
to Rs 1620.81 crore. The staff cost was flat at Rs 194.62 crore, while the
other expenditure declined 69% to Rs 662.58 crore. The ensuing Gross Profit
moved up 49% to Rs 13714.88 crore in FY2021. The Depreciation stood at Rs 11.17
crore, while provisions increased 253% to Rs 3496.40 crore in FY2021. The
profit before Tax increased 25% to Rs 10207.31 crore in FY2021. The Tax expense
dipped 31% to Rs 1763.30 crore. PAT improved 49% to Rs 8444.01 crore in FY2021.
Power Finance Corporation: Standalone Results
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Particulars
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2106 (3)
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2006 (3)
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Var %
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2103 (12)
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2003 (12)
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Var %
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Income
from operations
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9263.89
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8749.01
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6
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36145.76
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31950.42
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13
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Other
Income
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62.16
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25.41
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145
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1620.81
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1420.64
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14
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Total
Income
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9326.05
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8774.42
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6
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37766.57
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33371.06
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13
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Interest
Expenses
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5739.31
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5676.18
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1
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23194.49
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21853.19
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6
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Other
expenses
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373.86
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616.91
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-39
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857.20
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2325.01
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-63
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Gross
profit
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3212.88
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2481.33
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29
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13714.88
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9192.86
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49
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Depreciation
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2.80
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1.94
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44
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11.17
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9.10
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23
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Provisions
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450.54
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353.04
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28
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3496.40
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991.22
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253
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Profit before
tax
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2759.54
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2126.35
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30
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10207.31
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8192.54
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25
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Provision
for tax
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485.95
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426.79
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14
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1763.30
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2537.40
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-31
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Net
profit
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2273.59
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1699.56
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34
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8444.01
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5655.14
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49
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EPS*(Rs)
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34.4
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25.8
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32.0
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21.4
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* Annualized on current equity of Rs 2640.08 crore. Face Value: Rs 10,
figures in Rs Crore
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Source: Capitaline Corporate Database
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