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With a market valuation of ₹32,974.62 Cr., Power Finance Corporation Ltd. is a large-cap company that operates in the financial services industry. In October 2021, the firm received the designation of “Maharatna CPSE,” and on July 28, 2010, the RBI designated it as an infrastructure finance company. The firm is a market leader with a 20% market share and a highly specialized financial institution in the power sector. The company also announced a second interim dividend of 30% for FY23 along with its Q2 results.
The company has said in a stock exchange filing that the Board of Directors has considered and approved the “Declaration of Second interim dividend @ ₹3.00 (Rupees three only) per equity share (subject to deduction of TDS) on the face value of the paid-up equity shares of ₹10 each for the FY 2022-23. Further, it is to inform that 25th November, 2022 (Friday) shall be reckoned as the ‘Record Date’ for the purpose of ascertaining the eligibility of shareholders for payment of Second Interim Dividend for the FY 2022-23. The date of payment/dispatch of the aforementioned interim dividend shall be on or before 09th December 2022.”
Power Finance Corporation (PFC) reported its highest-ever quarterly profit after tax (PAT) for the September quarter 2022–23 of Rs. 5,229.33 crore, which is 4.09% higher YoY than the Rs. 5,023.42 crore reported in the same quarter previous year. Total income rose to ₹19,344.39 crore in Q2FY23 from ₹19,282.60 crore posted in Q2FY22. In comparison to the ₹19,267.75 Cr reported in Q2FY22, the company generated net revenue from operations of ₹19,336.05 Cr in Q2FY23. The company declared an EPS of ₹14.91 per share in Q2FY23 compared to 14.20 posted in Q2FY22.
Post the Q2 results of Power Finance Corporation, the research analysts of the broking firm ICICI Securities said in a note that “Power Finance Corporation’s (PFC) Q2FY23 earnings surpassed I-Sec estimates buoyed by provisioning release of Rs16bn on stress resolution and dividend income of Rs5.11bn. With resolution of South East UP Transmission (Rs22.6bn) and Jhabua Power (Rs7.6bn), stage-3 assets were down 90bps QoQ to 4.75%. Two more projects namely Ind Barath Energy (Utkal) (Rs13.7bn) and LANCO Amarkantak (Rs23.7bn) are in advanced stages of resolution and will keep stress pool under check. Provisioning release of Rs16bn on stress resolution was utilised to raise coverage on stage-1/2 assets. Drawing down from sanction pipeline, disbursements gained traction. Incremental sanctions under various power schemes revive hope on growth gathering pace gradually. Hedging proportion was improved to 68% (vs 44% YoY) to minimise the impact of rupee depreciation and it booked forex translation loss of Rs6.5bn. It declared interim dividend of Rs3 per share (35% payout of consolidated PAT in H1FY23). Maintain BUY with an unchanged target price of Rs191 (0.8x FY24 P/ABV).”
The shares of Power Finance Corporation Limited closed on Friday at ₹124.65 apiece, up by 1.30% from the previous close of ₹123.05. On a YTD basis, the stock has gained 1.51% so far in 2022. Power Finance Corporation has announced a dividend of 120.00% at a face value of ₹10 each, or ₹12 per share, for the fiscal year ended March 2022, or FY22. The dividend yield at the current share price of ₹124.65 is 9.62%.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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