Power Finance Corp More Than Doubled Q4 Profits

Power Finance Corp has reported in its Q4 2019 results that it has more than doubled its profits for the quarter over the same period last year.

State-owned Power Finance Corp (PFC) has reported over a twofold rise in its standalone net profits to Rs 2,117.56 crore for the March 2019 quarter, mainly on the back of reduction in the cost of funds and retiring of high-cost loans. The company had reported a net profit of Rs 796.35 crore in the corresponding quarter of the previous fiscal. 

Its total standalone income for the January-March period increased to Rs 7,702.64 crore in the March quarter, from Rs 6,254.96 crore a year ago. During the quarter, PFC’s total expenses stood at Rs 4,786.64 crore from Rs 5,186.48 crore in the fourth of 2017-18, a reduction of around 7.7 percent. 

In the full financial year 2018-19, PFC’s standalone net profit stood at Rs 6,952.92 crore, compared to Rs 4,386.76 crore a year ago. Total standalone income also improved to Rs 28,851.29 crore during the year, against Rs 25,980.25 crore in 2017-18. The company’s consolidated net profit in FY19 was Rs 12,640.27 crore, compared with Rs 8,796.69 crore in the previous fiscal. Total consolidated income rose to Rs 54,156.83 crore from Rs 48,645.42 crore in 2017-18. 

“During the quarter, we managed to reduce the cost of funds to 7.68 percent. This is a significant accomplishment for PFC considering the market scenario NBFCs faced during the last financial year and higher quantum raised during the year. This has been achieved by maintaining a diversified liability mix and retiring of old high-cost loans,” Chairman and Managing Director Rajeev Sharma told reporters.

During the quarter, PFC completed the acquisition of state-owned REC. Thus, the firm’s consolidated loan asset book after the acquisition stood at Rs 5,95,877 crore, while the net worth is Rs 63,484 crore. 

In December 2018, we had reported that the Cabinet Committee on Economic Affairs had given its ‘In Principle’ approval for the strategic sale of the Government of India’s existing 52.63% of total paid-up equity shareholding in Rural Electrification Corporation (REC) to Power Finance Corporation (PFC) along with transfer of management control.

The firm expects to continue with its efforts to diversify the loan book to sectors such as electrical and hydro-mechanical components related to lift irrigation, sewage treatment plants, smart cities, and e-vehicle manufacturing units including charging stations, among others.