Power Finance Corporation Posts Good Set Of Q4 Numbers

Power Finance Corporation has come with strong set of numbers for fourth quarter and year ended on 31 March, 2014. The company topline grew by 21% to Rs 5636 crore in Q4FY14 against Rs 4670 crore in same period of last year. Further net interest income (difference between interest earned and interest expended) went up by 29% to Rs 2243 crore during the said quarter against Rs 1739 crore in Q4FY13.Moreover, net interest margin (NIM) of the company improved by 49 basis points and stood at 4.99% in Q4FY14 as against 4.5% in same period of last year. 

NIM improved during the said quarter due to decrease in cost of fund for the company that came down to 8.75% in Q4FY14 against 8.94% in same period of last year. Yield on assets for Q4FY14 stood at 12.24% as against 11.92% in same period last year. Bottomline of the company recorded a growth of 9% on yearly basis to Rs 1411 crore during the said period against Rs 1294 crore in same period of last year. The growth of bottomline was less as compare to topline due to rapid increase in provision that went up to Rs 191 crore in Q4FY14 against Rs 9 crore in same period last year.

As regards to other performance parameters, company’s return on average assets for Q4FY14 declined marginally, by 24 basis points to 2.98% from that of 3.22% in Q4FY13. The Capital Adequacy Ratio (CAR) improved to 20.1% (Tier I at 16.4% and Tier II at 3.7%). Book value of the company stood at Rs 190.1 per share in Q4FY14 against Rs 165.7 per share in Q4FY13.

As far as PFC’s assets quality is concerned, the company was able to sustain it during the said period. Gross Non Performing Assets (NPAs) ratio of the company stood 0.65% in Q4FY14 which was same in Q3FY14.Further net NPA ratio remains constant at 0.52% of net lending of the company in Q4FY14. However, in absolute term gross NPAs increased by 5% qoq to Rs 1228 crore while net NPAs grew by 7% qoq to Rs 985 crore during the said period. Provision of the company went up 274% on quarterly basis to Rs 191 crore in Q4FY14 against Rs 51 crore in Q3FY14.

Coming to performance for FY’14, Power Finance Corporation has performed well. Topline of the company went up by 24% to Rs 21121 crore in FY'14 against Rs 17076 crore in last fiscal year. NII of the company grew by 34% to Rs 8480 crore in FY'14 against Rs 6308 crore in FY'13. Moreover Net profit of the company recorded a double digit growth of 23% yoy and stood at Rs 5418 crore in FY'14 against Rs 4420 crore in last fiscal year.

The company at CMP of Rs 293.95 per share is trading at 1.55 x of its book value.