“For quarter ended March 2012, Power Finance Corporation reported 41% rise in Income from operations at Rs 3,683 cr compared to corresponding previous year period. Gross profit rose 42% to Rs 1,165 cr. Depreciation rose 17% to Rs 2 cr. PBT as a result was up 42% to Rs 1,164 cr. Effective tax rate stood at 30% compared to 26%. The final bottom line of the company increased 35% to Rs 818 cr. NII of the company rose 45% to Rs 1,229 cr in Q4FY'12 compared to Q4FY'11 and NIM of the company rose to 3.88% in Q4FY'12 from 3.55% in Q4FY'11. PFC disbursements are typically high in Q4 compared to other three quarters. The q-o-q disbursements increased 59%. The company plans loan disbursements of Rs. 43,000 cr in FY13 as against Rs.41000 cr in FY12. PFC has an adequate earning profile supported by its ability to borrow funds at competitive rates and low credit and intermediation costs. The company expects its spreads to improve in coming quarters as its assets are repriced every quarter while liabilities are repriced whenever RBI changes rates and RBI has signaled a full stop in the increase in rates.”
“On the back of strong loan sanctions, growth is expected to remain strong. Cost of raising new funds is expected to be low. We expect the company to post a CAGR of 22-23% in revenues over FY 2012-2014. At the CMP of 184, we estimate the target of Rs.216 (8x FY13 EPS). The company is exempted by the RBI in complying with prudential guidelines & provisioning norms laid down for NBFC. If the same were to be enforced, the valuation of the company would be adversely impacted,” says Maximus Securities research report.
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