A Navaratna PSU, Power Finance Corporation (PFC) reported a steady growth in its standalone net profit for first quarter ended 30th June 2009. Total income rose 31% on a YoY at Rs.1893 crore. Net Interest Income increased by 36% to Rs. 700 crore. Net profit increased by a very healthy 87% to Rs. 555 crore.
What was gratifying to note was that Net NPA was at a low level of 0.01% of net loan assets; meaning loan quality has remained good with a miniscule portion of bad loans.
Its sanctions also increased by 24% to Rs. 18,782 crore. Disbursements were lower by 8% at Rs.4345 crore. Sanctions continue to be dominated by state sector, which was up 47%, central sector was up 20%, joint sector was at 8% and that to the private sector was at its highest, up 26%. What this means is that one would see higher disbursements coming in Q2. PFC’s targets for the current fiscal is Rs.60,000 crore in sanctions and Rs.23,000 crore in disbursements.
Its debt equity at the end of current Q1 stands at 4.85 and capital adequacy is at 17.51% as against 16.75% in Q1FY09. Book value is very healthy at Rs.98.57.
PFC had tapped the primary market in 2007 with a Rs.997.19 crore issue. It was priced at Rs85 per share and got listed at Rs.113. Today it is quoted at around Rs.215 levels, which continues to remain a very good deal for the original shareholders even now, even in this market.
PFC is the dominant investor in the country's power sector, funding about 20% of the projects. PFC has been designated as a nodal agency by the union government for facilitating the development of UMPPs and with six more UMPPs to go, PFC seems to have its work all chalked out! Power is one of the sectors, which is expected to get the maximum impetus, and irrespective of any slowdown or inflation, the growth of this sector will continue relentlessly. PFC remains a good stock in the portfolio.
What was gratifying to note was that Net NPA was at a low level of 0.01% of net loan assets; meaning loan quality has remained good with a miniscule portion of bad loans.
Its sanctions also increased by 24% to Rs. 18,782 crore. Disbursements were lower by 8% at Rs.4345 crore. Sanctions continue to be dominated by state sector, which was up 47%, central sector was up 20%, joint sector was at 8% and that to the private sector was at its highest, up 26%. What this means is that one would see higher disbursements coming in Q2. PFC’s targets for the current fiscal is Rs.60,000 crore in sanctions and Rs.23,000 crore in disbursements.
Its debt equity at the end of current Q1 stands at 4.85 and capital adequacy is at 17.51% as against 16.75% in Q1FY09. Book value is very healthy at Rs.98.57.
PFC had tapped the primary market in 2007 with a Rs.997.19 crore issue. It was priced at Rs85 per share and got listed at Rs.113. Today it is quoted at around Rs.215 levels, which continues to remain a very good deal for the original shareholders even now, even in this market.
PFC is the dominant investor in the country's power sector, funding about 20% of the projects. PFC has been designated as a nodal agency by the union government for facilitating the development of UMPPs and with six more UMPPs to go, PFC seems to have its work all chalked out! Power is one of the sectors, which is expected to get the maximum impetus, and irrespective of any slowdown or inflation, the growth of this sector will continue relentlessly. PFC remains a good stock in the portfolio.
Source: www.premiuminvestments.in (By S P Tulsian)
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