Power Finance Corporation – Phase III Assets Rise as TRN Energy Slips: ICICI Securities

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Power Finance Corporation Ltd. reported self-sustaining profit after tax of Rs 23.8 billion in the third quarter of FY22, an 8% year-on-year growth. Earnings had limited support from dividend income of Rs 2.88 billion (vs. Rs 6.4 billion in Q3 FY21 and Rs 4 billion in Q2 FY22) and a net foreign exchange gain of Rs 330 million.

Furthermore, even core earnings were below our expectations due to sluggish QoQ growth and a credit cost of Rs 9.6 billion (1% credit cost).

An account, TRN Energy Pvt. Ltd of Rs 11.4 billion slipped during the quarter and the Stage III pool increased QoQ to 6.06% (from 5.67%).

Even on a higher base, PFC still increased its coverage to 67% (from 66%). The loan portfolio remained stable quarter over quarter and growth should be driven by the focus on renewable energy and refinancing.

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