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Results
10-Nov-22
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Analysis
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Power Finance Corporation
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Net NPA dips to six-year low
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Power Finance
Corporation has reported 9% growth in the net profit to Rs 2998.75 crore in the
quarter ended September 2022 (Q2FY2023). Net Interest Income (NII) of the
company increased 9% to Rs 3848 crore, while the company has exhibited sharp improvement
in asset quality in Q2FY2023.
The company has witnessed
decline in Net Interest Margin (NIM) to 3.56% in Q2FY2023 from 3.69% in the
preceding quarter. The interest spreads of the company declined to 2.76% in
Q2FY2023 from 2.93% in the preceding quarter and 2.89% in the corresponding
quarter last year.
Quarterly performance
The company has posted 4%
increase in income from operations at Rs 9533.41 crore in the quarter ended
September 2022. Other income declined 2% to Rs 545.04 crore. Total income
increased 3% to Rs 10078.45 crore in the quarter ended September 2022. The
interest expenses were flat at Rs 5684.78 crore.
The employee expenses
declined 4% to Rs 51.11 crore, while the other expenditures jumped 171% to Rs 516.67
crore in the quarter ended September 2022.
The ensuing Gross Profit
was flat at Rs 3825.89 crore in the quarter ended September 2022.
The depreciation during
the quarter under review stood at Rs 4.09 crore up from Rs 3.59 crore in
Q2FY2022.
The Profit before Tax increased
8% to Rs 3669.97 crore in the quarter ended September 2022. An effective tax
rate was slightly lower at 18.3% in Q2FY2023 compared with 18.5% in Q2FY2022. PAT
increased 9% to Rs 2998.75 crore in Q2FY2023 over Q2FY2022.
Highlights:
Loan assets of the
company increased 1% to Rs 376696 crore at end September 2022 compared to Rs 371732
crore at end September 2021. Within
the loan book, the generation loan book declined 2% to
Rs 214781 crore, while transmission loan book moved up 2% to Rs 28671 crore and distribution jumped 8% to Rs 131002 crore at end September 2022. As per the
borrower segment wise classification, the private sector loan book fell 2% to Rs 60100 crore, while the government sector loan
book rose 2% to Rs 316596 crore end September 2022.
Disbursement of the
company increased 21% to Rs 17147 crore in Q2FY2023 compared to Rs 14161 crore
in Q2FY2022, as the generation
disbursement moved up 242% to Rs 8942 crore, while transmission
disbursements also increased 123% to Rs 1025 crore.
However, the distribution disbursements declined 36% to Rs 7124 crore in Q2FY2023. As per the borrower
segment wise classification, the private sector disbursements jumped 263% to Rs 5206 crore, while the government sector
disbursements declined 6% to Rs 11941 crore in
Q2FY2023.
Outstanding Borrowings
increased by 1% to Rs 323522 crore at end September 2022, driven by bonds
borrowing rising 1% to Rs 257485 crore at end September 2022. Term loans
declined 3% to Rs 62341 crore, while short-term loans jumped 642% to Rs 3696 crore
at end September 2022.
NIM of the company
declined 7 bps yoy to 3.56% in Q2FY2023. The yield on assets eased 21 bps to 10.07%,
while cost of funds fell 8 bps yoy to 7.31%.
The gross stage 3 asset declined to 4.75%
end September 2022 from 5.65% a quarter ago, which entirely related to private
sector exposure. Net stage 3 asset also declined to six year low of 1.31% end
September 2022 from 1.73% a quarter ago.
Capital Adequacy Ratio
stood at 24.29% at end September 2022 compared to 21.76% a year earlier.
Book value of the company stood at Rs 238.10 per share at end September
2022. Adjusted Book value (net of net stage 3 assets) stood at Rs 219.39 per
share at end September 2022.
Financial Performance
H1FY2023
For six months ended
September 2022 (H1FY2023), Power Finance Corporation flat income from
Operations at Rs 18462.43 crore, while interest expense declined 2% to Rs 11146.36
crore, leading to a 4% rise in NII to Rs 7316.07 crore. Other income increased 5%
to Rs 652.57 crore. The staff cost rose 3% to Rs 104.82 crore, while the other
expenditure jumped 156% to Rs 1321.54 crore. The ensuing Gross Profit declined 7%
to Rs 6542.28 crore in H1FY2023. The Depreciation stood at Rs 8.87 crore, while
provisions dipped 64% to Rs 323.55 crore in H1FY2023. The profit before Tax to rose
1% to Rs 6209.86 crore in H1FY2023. The Tax expense declined 1% to Rs 1101.59 crore.
PAT improved 2% to Rs 5108.27 crore in H1FY2023.
Power Finance
Corporations: Standalone Results
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Particulars
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2209 (3)
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2109 (3)
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Var %
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2209 (6)
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2109 (6)
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Var %
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2203 (12)
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2103 (12)
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Var %
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Income from operations
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9533.41
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9202.40
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4
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18462.43
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18466.29
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0
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36701.22
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36145.76
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2
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Other Income
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545.04
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556.82
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-2
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652.57
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618.98
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5
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1889.95
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1620.81
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17
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Total Income
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10078.45
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9759.22
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3
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19115.00
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19085.27
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0
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38591.17
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37766.57
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2
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Interest Expenses
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5684.78
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5672.41
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0
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11146.36
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11411.72
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-2
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22671.30
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23194.49
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-2
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Other expenses
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567.78
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243.52
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133
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1426.36
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617.38
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131
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1456.88
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857.20
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70
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Gross profit
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3825.89
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3843.29
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0
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6542.28
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7056.17
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-7
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14462.99
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13714.88
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5
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Depreciation
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4.09
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3.59
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14
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8.87
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6.39
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39
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13.20
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11.17
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18
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Provisions
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151.83
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456.27
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-67
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323.55
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906.81
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-64
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2222.14
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3496.40
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-36
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Profit before tax
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3669.97
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3383.43
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8
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6209.86
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6142.97
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1
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12227.65
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10207.31
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20
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Provision for tax
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671.22
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624.78
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7
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1101.59
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1110.73
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-1
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2205.75
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1763.30
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25
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Net profit
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2998.75
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2758.65
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9
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5108.27
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5032.24
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2
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10021.90
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8444.01
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19
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EPS*(Rs)
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45.4
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41.8
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38.7
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38.1
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38.0
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32.0
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Adj BV (Rs)
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219.4
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187.5
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219.4
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187.5
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199.9
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169.2
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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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