Power Finance Q1 Review - Stable Stage-III Assets, Improved Coverage, Consistent Spreads: ICICI Securities
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ICICI Securities Report
Power Finance Corporation Ltd. has reported Q1 FY22 profit after tax of Rs 22.7 billion much higher than our expectations.
Net interest income grew 15% YoY as well as QoQ as against our expectations of pressure on net interest margin due to cut in lending rates with-effect-from April 2021.
Yields surprisingly improved QoQ and spreads were sustained at 3%.
This has more than offset credit cost provisioning of Rs 4.5 billion and forex mark to margin loss of Rs 2.7 billion.
Stage-III assets remained stable at Rs 211.5 billion (5.7%) and a couple of projects are in advances stages of resolution.
For the first time, Power Finance Corporation announced an interim dividend in Q1 itself (of Rs 2.25 per share).
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