Highlights of the Concall

• PFS reported revenue growth of 60% to Rs 57.82 crore in Q2FY'12 compared to Rs 36.16 crore in Q2FY'11 while PAT during the quarter grew 11% to Rs 22.64 crore. The profit before tax (PBT) rose from Rs 25.90 crore in Q2 FY11 to Rs 34.76 crore in Q2 FY12 recording growth of 34%.

• The company had foreign exchange translation loss and mark to market loss on outstanding derivatives of Rs 4.36 crore during the quarter. If adjusted for forex translation loss (Rs 4.11 crore) and mark to market loss (Rs 0.25 crore) on outstanding derivative contracts for hedging of such borrowings, growth in PBT and PAT in Q2 FY12 has been 34%, and, 25% respectively on y-o-y basis.

• There are nil NPAs as on 30 th September 2011, and return on assets (ROA) for the quarter has been 1.31%, on the expanded capital base because of IPO proceeds of Rs 352.70 crore on 31^st March 2011. ROA for Q1 FY12 was 0.61%.

• The company expects to improve RoA in Q3 and Q4 of FY'12

• The Net Interest Margin (NIM) stands at 6.57% for Q2 FY12 and spread at 3.88%. The spread for Q2 FY11 was 2.83%, and for Q1 FY12 was 3.03%. Net Interest Income considered for NIM does not include interest income of Rs 5.40 crore earned on treasury float on temporary surplus funds, included in other income of Rs 5.44 crore for Q2 FY12.

• The company expects sustainable NIMs to be around 4-5% which would be reachable as the business gets stable.

• Cost of borrowing fell to 10.2% in Q2FY'12 compared to from 10.5% in Q1FY'12

• The total effective debt sanctions as at the end of Q2 FY12 aggregated to Rs 4571 crore to 49 power projects compared to Rs 3365 crore at the end of FY11, recording growth of 36%. Post Q2 FY12 till date, PFS has further sanctioned loans of Rs 716 crore to 4 power projects. This includes mezzanine funding of Rs 100 crore.

• The company has loan applications in waiting of around Rs 4000 crore while loan enquiries around Rs 2000 crore taking total loan pipeline to be around Rs 6000 crore.

• The outstanding debt as at the end of Q2 FY12 was Rs 991 crore compared to Rs 680 crore as at the end of FY11 and Rs 609 crore as at the end of Q2 FY11, recording growth of 46% and 63% respectively.

• Equity investment outstanding as at the end of Q2 FY12 stands at Rs 461 crore against total commitment of Rs 564 crore. Subsequent to quarter end, on October 5, 2011, the company has concluded sale of investment pursuant to a ‘Put Option' exercised by the company during the current quarter. In accordance with the accounting standards, the gain of Rs 47.61 crore arising on this transaction will be recognized in the subsequent quarter.

• Post Q2 FY12, the company has also executed necessary agreements for divesting its part stake in Indian Energy Exchange Limited. Application for FIPB approval is being made.