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Informist, Thursday, Aug. 6, 2026

 

By Vaishali Tyagi

 

NEW DELHI – Power Finance Corp. Ltd. is expected to report a sharp sequential fall in its net profit for the June quarter due to subdued growth in its assets under management, according to brokerages tracking the company. On a year-on-year basis, the bottom line is expected to report a marginal decline.

 

The power financier's net profit for the June quarter is estimated to fall over 29% on quarter to INR 44.88 billion, according to the average of estimates from three brokerages. On year, the profit is seen down marginally. ICICI Securities Ltd. has the highest estimate for net profit at INR 50.07 billion and PhillipCapital (India) Pvt. Ltd. has the lowest estimate at INR 39.55 billion.

 

For the March quarter, the state-owned company had posted a net profit of INR 63.25 billion, up nearly 24% on year and 33% on quarter, mainly because of a write-back in provisions for bad loans. Lower expenses on changes to fair value of assets and on employee benefits had also helped the rise in the bottom line for the March quarter.

 

Most brokerages expect the growth in PFC's assets under management to be subdued in the June quarter. ICICI Securities expects it to grow 1% on quarter and 7% on year to INR 5.86 trillion. On loan growth, all three brokerages expect PFC's loan book to grow at a slow pace. Loan growth is estimated at 7% on year by both ICICI Securities and Motilal Oswal Financial Services Ltd. The company's gross loan assets rose to INR 5.8 trillion at the end of March from INR 5.4 trillion a year ago. The renewable energy sector accounted for 16% of the total loan book.

 

PFC is expected to report a consolidated net interest income of INR 56.17 billion for the June quarter, up nearly 3% on year and nearly 2% on quarter, according to the average of estimates. The highest estimate for net interest income is INR 57.39 billion from ICICI Securities and the lowest is INR 54.65 billion from PhillipCapital. For the March quarter, the company had reported a net interest income of INR 108.33 billion, down from INR 121.09 billion a year ago.  

 

Views on the company's disbursements for the quarter are mixed. Motilal Oswal expects PFC's disbursements to grow 10% year-on-year despite muted loan growth across power financiers, while PhillipCapital expects the loan book to rise slowly. As on Mar. 31, the company's disbursements were INR 1.65 trillion.

 

Brokerage views were mixed also on the asset quality of PFC. Asset quality is expected to remain stable, according to PhillipCapital and could improve further on the back of resolution of stressed assets, according to Motilal Oswal. The gross credit impaired asset ratio was 1.09% at the end of March and the net credit impaired asset ratio was 0.15%. The company had a write-back for impairment on financial instruments of INR 13.82 billion for the March quarter.

 

Brokerages expect credit costs to remain benign and the net interest margin to stay stable sequentially in the June quarter. For the financial year 2025-26 (Apr-Mar), the net interest margin on earning assets was 3.55%, down from 3.64% a year ago. PFC will detail its June quarter results Friday. Investors will watch out for management commentary on loan book growth, asset quality, and margins. Costs will also be in focus.

 

Shares of Power Finance Corp. ended at INR 418 on the National Stock Exchange Thursday, unchanged from Wednesday. The stock is down 6% since the company reported its March quarter earnings. All six research reports on Power Finance Corp. available with Informist have a "buy" rating on the stock, with the average target price of INR 514, which is 23% higher from current market price. 

 

Following are the Apr-Jun earnings estimates, in INR billion, for Power Finance Corp. from three brokerages, in descending order of net profit estimates:

 

Broking Firm	Net Interest Income	Net Profit
ICICI Securities Ltd.	57.39	50.07
Motilal Oswal Financial Services Ltd.	56.47	45.01
PhillipCapital (India) Pvt. Ltd.	54.65	39.55
Average	56.17	44.88

 

End

 

Edited by Shubhayan Bhattacharya 

 

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