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Power Finance Corp: Credit offtake remains healthy - Views on News from Equitymaster
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  • Feb 29, 2016 - Power Finance Corp: Credit offtake remains healthy

Power Finance Corp: Credit offtake remains healthy
Feb 29, 2016

Power Finance Corporation (PFC) declared its results for the third quarter of financial year 2015-16 (3QFY16). The institution has reported a robust 12.8% YoY and 2.5% YoY growth in net interest income and net profits respectively.

Performance summary

  • Interest Income grew by 9.6% YoY during 3QFY16 on the back of healthy 12.5% YoY growth in advances. For 9mFY16, interest income was up by 12% YoY.
  • Net interest incomes recorded strong growth of 12.8% and 17.4%, in 3QFY16 and 9mFY16 respectively aided by a slower rise in interest expenses.
  • Net interest margins (NIMs) fell below 5% in 3QFY16 on a steeper fall in yield on assets. But for 9mFY16, NIMs remained above 5%.
  • Growth in net profits, at 2.5%, was subdued due to a three folds jump in provisioning. For 9mFY16, profits grew by a healthy 10.4%.
  • Net NPA to advances ratio more than doubled to 1.57% at the end of 3QFY16, compared to 0.75% in 2QFY15.
  • Capital adequacy ratio (CAR) stands at healthy 20.41% as at the end of 3QFY16.

Standalone Financial Performance Snapshot

Rs (m) 3QFY15 3QFY16 Change 9mFY15 9mFY16 Change
Interest Income 63,260 69,350 9.6% 184,030 206,140 12.0%
Interest expended 37,810 40,650 7.5% 110,760 120,110 8.4%
Net Interest Income 25,450 28,700 12.8% 73,270 86,030 17.4%
Net interest margin 5.03% 4.98% 4.94% 5.12%
Other Income 40 30 -25.0% 190 210 10.5%
Operating expense 790 360 -54.4% 1,930 2,560 32.6%
Provisions and contingencies 1,540 4,830 213.6% 5,670 11,120 96.1%
Profit before tax 23,160 23,540 1.6% 65,860 72,560 10.2%
Extraordinary items 1,620 190 -88.3% 4,090 1,650 -59.7%
Tax 6,110 7,530 23.2% 17,800 22,370 25.7%
Effective tax rate 26.4% 32.0% 27.0% 30.8%
Profit after tax/ (loss) 15,430 15,820 2.5% 43,970 48,540 10.4%
Net profit margin (%) 24.4% 22.8% 23.9% 23.5%
No. of shares (m) 1,320
Book value per share (Rs)* 235.9
P/BV (x) 0.7

* (Book value as on 31st December, 2015)

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