PFC Q4 Review - Exits FY21 With 2.4% RoA, 8% Dividend Yield; Credit Cost Contained: ICICI Securities

Power lines hang from  transmission tower. (Photographer: Jeremy Piper/Bloomberg)

PFC Q4 Review - Exits FY21 With 2.4% RoA, 8% Dividend Yield; Credit Cost Contained: ICICI Securities

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ICICI Securities Report

Power Finance Corporation Ltd. has reported Q4 FY21 profit after tax of Rs 23.3 billion (flat QoQ), which was higher than our expectations.

The company exited FY21 with Rs 84.4 billion profit after tax (compared to Rs 56.5 billion in FY20) – return on assets of 2.4%, credit cost of sub-1% and return on equity of 17% plus.

Stage-III assets, as guided, declined to 5.7% with resolution of four projects in FY21.

There are other resolutions underway expected in H1 FY22.

Credit cost for FY21 settled sub-100 basis points as there was no incremental haircut required on resolved assets.

Based on detailed account-by-account analysis, we further build credit cost of 1.3%/0.6% for FY22E/FY23E, respectively.

Click on the attachment to read the full report:

ICICI Securities PFC Q4FY21 Results Update.pdf

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