India’s financial services sector is undergoing rapid transformation, with Scheduled Commercial Banks posting a 22.2 percent profit rise in H1 FY25 and public sector banks achieving record net profits of INR 1.41 lakh crore in FY24. The sector’s digital payments surged to 131 billion transactions in FY24, while India’s FinTech ecosystem now ranks third globally.
With a market capitalization of Rs 1.34 lakh crore, the shares of Power Finance Corporation Ltd closed at Rs 406.15 per share, decreased around 1.33 percent as compared to the previous closing price of Rs 412.75 apiece.
Brokerage Recommendations
Macquarie, one of the well-known brokerages globally, gave a ‘buy’ rating on this fintech stock with a target price of Rs 660 apiece, indicating a potential upside of 62 percent from Thursday’s price of Rs 405 per share.
As per the brokerage, this follows the state-owned company’s strong March quarter performance, with key indicators like loan growth, core income, and profit surpassing Street estimates. The impressive operating and financial results highlight the company’s solid fundamentals and effective execution during the quarter.
Financial performance
Looking forward to the company’s financial performance, revenue increased by 21 percent from Rs 24,141 crore in Q4FY24 to Rs 29,265 crore in Q4FY25. Further, during the same time frame, net profit increased by 11 percent from Rs 7,556 crore to Rs 8,358 crore.
In FY25, the company reported Rs 1,05,001 crore in interest income and Rs 64,670 crore in interest expense, resulting in Rs 40,331 crore net interest income. Q4 FY25 saw strong growth with Rs 28,676 crore interest income and Rs 12,092 crore net interest income.
In FY25, the company reported loan assets of Rs 5.43 lakh crore and disbursements of Rs 1.68 lakh crore. Lending was primarily to the government sector (77 percent). Gross NPA ratio improved to 1.94 percent, with 80 percent provisioning on Stage-III NPAs. Net NPA stood at 0.39 percent, with Rs 1,661 crore under resolution.
Power Finance Corporation Limited is an India-based non-banking financial company. The Company is primarily engaged in providing financial assistance to the power sector. The Company’s fund-based products include project term loans, lease financing for the purchase of equipment, and short/medium-term loans to equipment manufacturers.
Written by Abhishek Singh
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