PFC
Large CapPower Finance Corporation Limited
Financial Services
Power Finance Corporation Ltd. (PFC) is a leading Indian NBFC, a Government of India Undertaking, primarily focused on financing the power sector. It holds a 52.63% stake in REC and is undergoing a strategic merger process to create a unified financial institution for India's power sector.
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Mixed fundamentals, management trust is acceptable, price trend is neutral, and recent execution is consistent.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
low confidence · 0/0 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 31 Mar 2026
Bad · 0/100Rev -1% YoY · PAT +3% YoY
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹28,920 Cr | -1.2% | -0.6% |
| EBITDA | NDF | NDF | NDF |
| Operating margin | NDF | NDF | NDF |
| PAT | ₹8,598 Cr | +2.9% | +4.7% |
| PAT margin | 29.7% | +117 bps | +151 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Where growth can come from, and what can break the case
PFC reports highest-ever standalone net profit of INR 20,051 crore (+16% YoY) in FY26, driven by NII growth and provision reversals. Consolidated loan book reached INR 11.64 lakh crore with net NPAs at a new low of 0.13%.
PFC delivered robust FY26 results with record profitability and significant asset quality improvement. The proposed merger with REC is a strategic move to create a larger, more efficient entity, targeting 10% loan growth for FY27. Prepayment pressures and forex volatility remain key areas to monitor.
PFC-REC Merger
A unified institution will help unlock better scale, strong capital efficiency, faster decision-making, deeper sector reach and larger financing capabilities.
Renewable Energy Financing
Focus on adding hybrid renewable projects, renewable energy with storage solutions such as battery and pump storage.
Distribution Sector Lending
Largely see opportunities in short to medium term loan requirements of distribution companies.
Conventional Energy & Infrastructure
Opportunities emerging across thermal and nuclear capacity expansion aligned with national goals. Lending in the infrastructure sector will also contribute.
Energy Storage Solutions Sanctioned
Cumulatively, sanctioned around INR 16,000 crores towards battery and pump storage projects.
Power Sector Growth
India's power sector will be a key growth engine for 'Viksit Bharat 2047'. India ranks third globally in renewable energy installed capacity.
Strong Electricity Demand
Electricity demand in India continues to remain strong. Peak power demand touched all-time high of 256 GW in April '26.
Improving DISCOM Performance
AT&C losses reduced to 15.04%. For the first time, DISCOMs reported positive PAT of approximately INR 2,700 crore at an all-India level.
Moderating Prepayment Pressures
RBI has kept repo rate unchanged at 5.25% for the second consecutive meeting, maintaining a neutral stance, suggesting prepayment pressures should moderate.
Prepayment Pressure
Declining interest rate cycle and competitive pressure from banks led to disproportionate prepayments in FY26, particularly in the commissioned segment.
Forex Market Volatility
Volatility in forex market led to some pressures on the overall funding cost and higher translation losses in FY26.
Geopolitical Situation
Middle East crisis led to sharp depreciation in Rupee against USD and EUR during the financial year.
Competition and Refinancing Risk
Banks are aggressively refinancing commissioned assets, especially in the renewable portfolio, posing a constant competition threat.
Foreign Currency Exchange Rate Volatility
Abnormal movement in exchange rates can impact hedging costs and lead to notional losses, despite 97% of foreign currency portfolio being hedged.
Interest Rate Sensitivity
PFC's 65% fixed-rate, longer-tenor borrowing means its interest liability is not as flexible as market rates, leading to prepayment pressure in declining rate cycles.
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
Annual financial results like PAT and NII are best understood YoY for overall performance. However, asset quality ratios, spreads, and NIM are crucial QoQ to track sequential momentum, management's pricing strategy, and the impact of a changing interest rate environment.
Consolidated Loan Book
Largest NBFC loan book at around INR 11.64 lakh crore.
Standalone Net Profit
Highest ever net profit of INR 20,051 crore with a 16% increase year-on-year basis.
Net Interest Income (NII) Growth
Driven by a healthy net interest income growth of 13% along with provision reversals.
Net Non-Performing Assets (NNPA)
Consolidated net NPAs at around 0.13%. Standalone net credit impaired asset ratio at new low at 0.15%.
Loan Growth Target
Targeting a loan growth of around 10% in Financial Year '27.
PFC-REC Merger Timeline
Targeting for the merged entity to come into existence by 1st of April 2027, subject to regulatory approvals.
Government Company Status
Government has committed to maintain the status of the merged entity as a government company, despite potential shareholding changes.
Funding Strategy
Will continue to diversify funding sources, balancing cost optimization and diversification of funds.
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| Loan Growth | 7% in FY26 (standalone) | Achievement of 10% loan growth target in FY27, indicating effective management of prepayment pressures and competitive intensity. |
| Spreads | 2.46% in FY26 | Maintenance of spreads within the guided range of 2.40%-2.50% for FY27, reflecting successful calibration of lending rates and funding costs. |
| PFC-REC Merger Progress | In-principle approval, advisors appointed | Timely receipt of regulatory approvals (MCA, RBI, SEBI, Cabinet, Presidential) and clarity on the detailed merger structure and government shareholding. |
| Foreign Exchange Volatility Impact | Higher translation losses in FY26 due to Rupee depreciation | Effectiveness of risk mitigating actions and hedging strategies in managing future forex volatility and its impact on funding costs and profitability. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Trend score and candlestick chart
59NeutralSMA20 +7.0% / mo
Technical chart
PFCdaily · 5Y+16.2%Technical trend read
Mixed signalsSignals are conflicting — long-term trend unclear. RSI 51. Wait for confirmation.
- SMA20 falling (~6.7% over last month) — short-term momentum negative.
- RSI(14) at 51 — rising, no extreme reading.
- MACD above signal but histogram contracting — bullish momentum cooling.
- 10% off 52W high · 32% above 52W low.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Valuation, score drivers, trust methodology, financials, and peers
Use these sections after reviewing the decision summary, latest result, thesis, management accountability, and technical timing above.
Fundamental score breakdown
FAIR VALUEWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- Fair-value margin of safety is positive at 83.2%.
- Valuation contributes 30/30 to the score.
- Growth contributes 16/25 to the score.
Main drags
- Altman Z is 0.3, in distress territory.
- Cash flow is weaker at 1/10; verify the latest quarterly trend.
- Balance sheet is weaker at 2/15; verify the latest quarterly trend.
NBFC valuation: P/B, ROA, borrowing cost, and asset quality
Lenders can look optically cheap before credit losses emerge, so valuation is tied to book quality.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: +0 points.
Factor attribution
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Mixed Trust: Claim history is still being built. It ranks around the 27th percentile of the scored universe and 42nd percentile within Financial Services. Main check: balance sheet trust is weak at 22/100.
Healthy Trust Lite: Promoter holding is 56%. Key concern: Operating cash flow is negative at ₹-4504 Cr.
Usable, but needs evidence. Treat guidance with a margin of safety.
overall median 67 · Financial Services: 42nd pctile, median 62 · Large: 16th pctile, median 74
62 documents indexed, but claim history is not strong enough yet.
0 claims extracted · No contradicted claim yet
How to read this Trust Score
Mixed Trust · low confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter holding is 56%.
- ▸Promoter pledge is zero.
- ▸3/4 latest quarters had positive YoY revenue growth.
- ▸4/4 latest quarters had positive YoY PAT growth.
Trust risks
- ▸Operating cash flow is negative at ₹-4504 Cr.
- ▸Debt/equity is 7.62.
- ▸Altman Z is 0.26.
Trust Lite uses financial behaviour only. Prefer claim-tested Trust when enough concall claims have later outcomes.
Intrinsic value
Fundamentals
Valuation
- P/E
- 5.46
- P/B
- 1.06
- EV/EBITDA
- 18315.54
- Market Cap
- 141376.00Cr
Profitability
- ROE
- 20.70%
- ROCE
- 9.71%
- ROA
- 2.70%
- Dividend Y
- 3.69%
Growth (CAGR)
- Revenue 5Y
- 10.00%
- EPS 5Y
- 17.00%
- Revenue 3Y
- 14.00%
- EPS 3Y
- 18.00%
Balance Sheet
- Debt/Equity
- 7.62
- Interest Coverage
- —
- Altman Z
- 0.26
- Book Value
- 403.00
Cash Flow
- FCF Yield
- —
- FCF Positive Y
- 2/5
- OCF
- -4504.00 Cr
- EPS TTM
- 78.49
Shareholding
- Promoter Hold
- 55.99%
- Promoter Pledge
- 0.00%
- Momentum 52W
- 63%
Financial History
Updated 9/6/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
Business-comparable peers in Financial Services — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.