17 August 2015
1QFY16 Results Update | Sector:
Financials
Power Finance Corporation
BSE SENSEX
27,878
Bloomberg
Equity Shares (m)
M.Cap. (INR b) / (USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val(INRm)/Vol ‘000
Free float (%)
Financials & Valuation (INR b)
Y/E Mar
NII
PPP
Adj. PAT
Adj.EPS(INR)
EPS Gr.(%)
BV/Sh. (INR)
Adj.RoAA(%)
RoE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
Div. Yld(%)
5.1
1.0
3.8
4.5
0.8
4.8
3.9
0.7
5.5
2015
89.6
92.2
62.8
47.6
12.1
245.5
3.1
20.7
23.4
2016E
100.3
105.2
71.1
53.9
13.3
284.6
3.1
20.3
25.5
2017E
115.2
120.8
82.0
62.1
15.3
329.7
3.1
20.2
25.5
S&P CNX
8,477
POWF IN
1,320.0
318.1/4.9
316/219
-8/-8/-16
737/2,698
27.2
CMP: INR241
TP: INR330 (37%)
Buy
Growth moderates; RL increases to 10% of loan book; trades at 0.7x BV
n
Power Finance Corporation’s 1QFY16 reported PAT grew 9% YoY and flat
sequentially to INR15.77b (in line). However, adjusted for forex losses, PAT
grew 6.6% YoY. Key operating metrics: (a) Loan growth of 13.4% YoY (2%
QoQ), (b) NIM of 5.11% (up 20bp QoQ due to reduction in cost of funds), (c)
GNPA/NNPA at 1.25%/1.02%. Forex-related MTM losses were INR730m.
n
GNPAs increased 16bp QoQ to 1.25% as loans worth INR4b slipped into NPL.
Outstanding restructured loans (RL) from private sector stood at INR219b
(59%+ of private sector loans), and were up INR13b+ QoQ.
n
Loan growth of 2% QoQ and 13.4% YoY was driven by private sector (19%
YoY; 1.3% QoQ); share of private sector borrowers in the overall loan mix
remained stable at 16.6% (16.7% in 4QFY15). Growth in sanctions was 95%
YoY; however, disbursements de-grew 6.4% during the quarter.
n
CSR (Corporate Social Responsibility) provision of INR1.5b for FY15-16 was
made during the quarter itself (at 2% of last three-year average PAT),
resulting in an increase in operating expense.
Valuation and view:
Despite the underlying stress in the power segment, POWF
has managed to generate steady earnings CAGR of +20% over FY09-15. While
RBI’s move to grant regulatory forbearance to banks for infrastructure lending
can exert pressure on profitability over long term, near-term growth and
profitability should remain healthy—led by (a) outstanding sanctions of INR1.53t
(70% of outstanding loan book), (b) massive demand-supply mismatch in power
sector, and (c) fragile health of SEBs (enables pricing power). Moreover, with a
stable government, infrastructure bottlenecks are likely to be reduced, which will
be positive for growth and asset quality. POWF trades at 0.7x FY17E BV (below
LPA of 1.3x). Acceleration in reforms could be a catalyst for re-rating.
Buy.
Sunesh Khanna
(Sunesh.Khanna@MotilalOswal.com); +91 22 3982 5521
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com); +91 22 3982 5415
Investors are advised to refer through disclosures made at the end of the Research Report.
Motilal Oswal research is available on
www.motilaloswal.com/Institutional-Equities,
Bloomberg, Thomson Reuters, Factset and S&P Capital.

Power Finance Corporation
Exhibit 1: Quarterly performance v/s estimates and reasons for deviation (INR m)
Y/E March
Net Interest Income
YoY Gr %
Other Op. Inc.
Net Op. Inc.
YoY Gr %
Exch. Gain/(Loss)
Total Net Income
YoY Gr %
Operating Expenses
Operating Profit
YoY Gr %
PPP adj for forex
YoY Gr %
Provisions
PBT
YoY Gr %
Tax
Tax Rate %
PAT
YoY Gr %
Adjusted PAT
YoY Gr %
1QFY16A
27,920
21.9
40
27,960
22
-730
27,230
24.5
1,809
25,421
19.2
26,151
17
2,480
22,941
14
7,170
31.3
15,771
8.9
16,272
6.6
1QFY16E
25,438
11.1
75
25,513
11
-650
24,863
13.7
627
24,236
13.6
24,886
11
2,300
21,936
9
6,142
28.0
15,794
9.1
16,262
6.5
Vs Est.
10
Comments
NIMS improved 20bp QoQ; led by lower CoF
10
12
10
189
5
5
8
5
17
0
In line with estimates
0
Source: Company, MOSL
Fx losses higher than estimated
Above est. due to improved NIMs
CSR provisions for FY16 increase opex
Loan growth moderates to +13% YoY; sanctions growth pick up
n
n
Loan growth (2.0% QoQ and 13.4% YoY) was in line with estimate. Loan to
private sector grew (19% YoY; 1.3% QoQ) to INR 369b; Share of private sector
borrowers in the overall loan mix remained stable QoQ at 16.6%.
Sanctions for the quarter stood at INR196.4b up +94% YoY and 49% QoQ;
whereas disbursements stood at INR 77.5b down 6.4% YoY and 57% QoQ. Both
sanctions and disbursements were driven by transitional finance to SEBs.
Provisions at 3.5% v/s 2.75% in last quarter; GNPA increased sequentially
n
n
PFC has disclosed that it has restructured private sector loans worth INR219b
(4QFY15: INR205b), ~59% of private sector loans. % GNPA/NNPA increased
16bp/15bp QoQ to 1.25%/1.02% respectively, in absolute terms, GNPA
increased by INR4b to INR27.6b up 17% QoQ. PCR declined to 18.6% in 1QFY16
v/s 20% in the last quarter.
PFC is required to provide 3.5% on restructured assets by FY16 and 5% by FY18.
However, as a prudent measure, the company has increased it provisioning
norms to 3.5% during the quarter itself
Other highlights
n
n
n
n
Reported margins stood at 5.11% down 20bp QoQ; led by 29bp reduction in cost
of funds to 8.72%. Company continues to increase its borrowings from bonds,
which now stands at 87.6% of total borrowing v/s 85.5% in the last quarter.
Tax rate for the quarter stood at 31%.
Foreign currency borrowings constitute 5.3% of overall borrowings.
CSR (Corporate Social Responsibility) provision for FY15-16 at INR1.5b has been
made, during the quarter itself, at 2% of average PAT of last three years.
2
17 August 2015

Power Finance Corporation
Valuations and view
n
n
n
Despite the underlying stress in the power segment, POWF has managed to
generate steady earnings CAGR of +20% over FY09-FY14. RoEs have increased
from 15% in FY09 to 20.7% in FY15. While RBI’s recent move to grant regulatory
forbearance to banks for infrastructure lending can exert pressure on
profitability over long term; Near term growth & profitability is likely to remain
healthy led by a) O/S sanction of INR1.53t (~70% of outstanding loan book) b)
massive demand supply mismatch in power sector & c) fragile health of SEBs
(enables pricing power). Moreover with the stable government at the center,
Infra bottle-necks are expected to be eliminated which will be positive for
growth and asset quality.
Key trigger for the stock
(a) Timely tariff hikes by SEBs, automatic fuel pass
through, coal mining projects receiving forest clearances etc (b) higher focus
given to infrastructure (power in particular) and (c) Timely attempts to resolve
the fuel linkages issues.
POWF trades at 0.7x FY17 P/B (below its LPA of 1.3). Acceleration in reforms
could be a catalyst for re-rating. Maintain
Buy
with a target price of INR330 (1x
FY17 BV).
Exhibit 2: Du Pont Analysis
Net Interest Income
Other Operating Income
Other Income
Total Income
Operating expenses
Operating profits
Provisions
PBT
Taxation
RoA
Extra-ordinary
RoA post extra-ordinary
RoA (Adj. for Forex)
Leverage (x)
RoE (post extra-ordinary)
RoE (Adj. for Forex)
FY10
3.8
0.2
0.2
4.3
0.2
4.1
0.0
4.1
0.9
3.2
0.0
3.2
3.1
5.9
19.0
18.3
FY11
3.6
0.4
0.0
4.0
0.1
3.9
0.0
3.9
1.0
2.9
0.0
2.9
2.9
6.4
18.3
18.5
FY12
3.5
0.4
-0.1
3.8
0.1
3.7
0.1
3.5
0.9
2.6
0.0
2.6
2.7
6.5
16.8
17.5
FY13
4.0
0.3
-0.1
4.2
0.1
4.1
0.1
4.0
1.0
3.0
0.0
3.0
3.1
6.6
19.6
20.0
FY14
4.5
0.4
-0.1
4.7
0.1
4.6
0.3
4.3
1.2
3.1
0.0
3.1
3.2
6.7
20.6
21.3
FY15
FY16E
FY17E
4.4
4.3
4.4
0.4
0.4
0.4
-0.2
-0.1
-0.1
4.6
4.6
4.7
0.1
0.1
0.1
4.5
4.5
4.6
0.4
0.4
0.4
4.1
4.1
4.2
1.2
1.2
1.2
2.9
3.0
3.0
0.0
0.0
0.0
2.9
3.0
3.0
3.1
3.1
3.1
6.7
6.6
6.5
19.6
19.8
19.8
20.7
20.3
20.2
Source: MOSL, Company
17 August 2015
3

Power Finance Corporation
Story in charts
Exhibit 3: Loan growth moderates to 14% YoY
Loans (INR b)
29
27
26
23
24
YoY Gr (%)
Exhibit 4: Sanctions/Disb. growth remains muted YoY
Sanctions (INR b)
Disbursements (INR b)
22
20
18
17
16
15
15
14
Source: Company, MOSL
Source: Company, MOSL
Exhibit 5: Margins increase 20bp QoQ (%)
YoA (%)
CoF (%)
NIM (%)
Exhibit 6: High transitional fin leading to rise in other (%)
4
12 12
4
Generation
10 11 11
11
79
10
78
10
78
T&D
13 13
10
77
10
77
Others
14 14 15 17
10
76
10
76
10
75
9
73
12.5 12.4 12.4
11.7 12.0 12.1 11.9 12.1 12.5 12.4 12.2 12.3 12.5
7
11
82
17
9
73
9.1 9.2 9.1 8.9 8.9 8.9 8.9 8.8 9.0 9.0 9.0 9.0
8.7
5.1
4.2 4.3 4.6 4.5 4.8 5.0 4.9 5.0 4.8 5.0 5.0 4.9
85
84
Source: Company, MOSL
Source: Company, MOSL
Exhibit 7: Loan Mix: Share of Pvt. Sector is on the rise (%)
State
Central PSUs
Joint Sector
Private Sector
Exhibit 8: Borrowing mix; share of bonds increases QoQ (%)
1
Domestic Bonds
12
8
18
63
12
7
17
63
12
7
16
64
12
7
15
65
13
7
15
66
4
14
7
14
65
15
7
12
67
15
7
11
67
5
Term Loans
16
7
10
67
16
6
10
67
17
7
9
68
17
6
8
69
17
7
8
69
6
18
76
4
15
80
5
17
79
18
81
19
77
18
77
5
13
82
1
19
80
Sh. Term Loans & Others
6
18
76
2
17
81
2
14
84
2
12
85
4
8
88
Source: Company, MOSL
Source: Company, MOSL
17 August 2015
4

Power Finance Corporation
Exhibit 9: Quarterly Snapshot
FY14
1Q
Profit and Loss (INR m)
Net Interest Income
Other Income (Incl fees)
Exchange gain / loss
Net total income
Operating Expenses
Employee
Others
Operating Profits
Provisions
PBT
Taxes
PAT
Extra-ordinary/ Other adjustment
Adj. PAT
Asset Quality
GNPA
NNPA
Gross NPAs (%)
Net NPAs (%)
PCR (%)
Ratios (%)
Cost to Income
Provision to operating profit
Tax Rate
Total CAR
Margins Reported - Quarterly (%)
Yield on Loans
Cost of Funds
Spreads
NIMs
Margins Reported - Cumulative (%)
Yield on Loans
Cost of Funds
Spreads
NIMs
Balance Sheet Data (INR b)
Shareholders' Funds
Borrowings
DTL
Current Liability and Provisions
Total Liabilities
Loans (Incl Int accrued)
Investments
Fixed Assets
Total Assets
253
1,425
4
63
1,745
1,672.0
2.6
0.7
1,744.6
253
1,444
5
65
1,767
1,720.5
2.3
0.7
1,766.8
257
1,507
4
81
1,849
1,775
4
1
1,849
274
1,592
3
73
1,942
1,892.3
3.5
0.7
1,941.6
289
1,641
2
72
2,004
1,951.9
3.5
0.7
2,004.0
304
1,670
2
80
2,056
1,992.3
3.5
0.7
2,056.3
319
1,710
2
78
2,110
2,052
4
1
2,110
322
1,878
2
85
2,287
2,170.4
8.5
0.7
2,286.6
337
1,851
2
98
2,289
2,213.3
8.8
0.7
2,288.7
5
-1
13
15
0
2
3
-2
0
17
13
-12
37
14
13
150
-2
14
12.1
8.9
3.3
4.8
12.3
8.9
3.5
4.9
12.3
8.9
3.4
4.9
12.3
8.9
3.5
4.9
12.3
9.0
3.3
4.8
12.5
9.0
3.5
5.0
12.4
9.0
3.4
4.9
12.4
9.0
3.4
4.9
12.4
8.7
3.6
5.1
12.1
8.9
3.3
4.8
12.5
8.9
3.6
5.0
12.4
8.9
3.4
4.9
12.2
8.8
3.5
5.0
12.3
9.0
3.3
4.8
12.5
9.0
3.5
5.0
12.5
9.0
3.5
5.0
12.4
9.0
3.4
4.9
12.4
8.7
3.6
5.1
1.7
5.0
30
18.8
3.6
7.1
29
18.7
1.9
2.4
25
18.9
3.8
8.8
29
20.1
2.5
6.0
28
20.6
2.5
12.3
30
21.1
3.3
6.7
28
21.1
1.0
11.2
29
20.3
6.6
9.8
31
20.7
11,500
9,860
0.69
0.59
14.3
11,580
9,220
0.67
0.54
20.4
11,560
9,200
0.65
0.52
20.4
12,280
9,850
0.65
0.52
19.8
19,740
16,160
1.01
0.83
18.1
19,770
15,430
0.99
0.77
22.0
19,790
15,440
0.96
0.75
22.0
23,640
18,900
1.09
0.87
20.1
27,640
22,500
1.25
1.02
18.6
17
19
40
39
19,510
10
-1,070
18,450
319
231
88
18,131
910
17,221
5,230
11,991
1,659
13,650
21,190
140
-1,350
19,980
721
193
528
19,259
1,370
17,889
5,159
12,730
2,000
14,730
21,690
70
-290
21,470
402
208
194
21,068
510
20,558
5,206
15,353
940
16,293
22,420
100
160
22,680
869
220
649
21,812
1,910
19,902
5,800
14,102
2,350
16,452
22,900
60
-1,090
21,870
542
208
334
21,328
1,290
20,038
5,560
14,478
970
15,448
24,920
100
-1,370
23,650
594
230
364
23,056
2,840
20,216
6,130
14,086
3,060
17,146
25,450
40
-1,620
23,870
795
200
595
23,075
1,540
21,535
6,112
15,423
3,060
18,483
25,450
-40
-390
25,020
241
194
47
24,779
2,770
22,009
6,390
15,619
2,355
17,974
27,920
40
-730
27,230
1,809
230
1,579
25,421
2,480
22,941
7,170
15,771
4,300
20,071
10
-200
87
9
650
19
3,260
3
-10
4
12
1
83
12
22
-33
-33
25
234
11
373
19
92
14
29
9
343
30
2Q
3Q
4Q
1Q
2Q
FY15
3Q
4Q
FY16
1Q
Variation (%)
QoQ
YoY
Source: MOSL, Company
17 August 2015
5

Power Finance Corporation
Exhibit 10: Valuation Metrics
63.7
Rating
ICICIBC*
HDFCB
AXSB
KMB*
YES
IIB
DCBB
FB
JKBK
SIB
Private Aggregate
SBIN (cons)*
PNB
BOI
BOB
CBK
UNBK
IOB
OBC
INBK
CRPBK
ANDB
IDBI
DBNK
Public Aggregate
HDFC*
LICHF
DEWH
IHFL
IDFC
RECL
REPCO
POWF
SHTF
MMFS
BAF
NBFC Aggregate
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
CMP
Mcap
EPS (INR)
P/E (x)
BV (INR)
FY17
150
330
254
211
389
332
71
55
150
31
P/BV (x)
RoA (%)
RoE (%)
(INR) (USDb) FY16 FY17
303
27.6 21.8 25.7
1,091 42.9 49.1 59.2
562
20.9 36.7 43.6
719
20.6 20.3 27.4
791
5.2 60.6 76.4
951
8.7 41.8 52.1
137
0.6
6.9 9.4
68
1.8
5.7 7.1
107
0.8 14.1 17.3
23
0.5
2.2 3.1
129.6
279
33.1 25.5 31.6
173
5.0 19.5 26.8
185
1.9 22.5 39.4
212
1.5 20.7 24.6
347
2.8 51.2 65.5
219
2.2 35.4 46.2
40
0.7
4.2 2.7
181
0.9 50.8 63.2
162
1.2 23.6 31.7
54
0.1 16.5 21.9
80
0.8 17.8 22.8
71
1.8 14.4 19.7
46
0.4
9.7 13.6
48.1
1,280 31.6
38
44
501
4.0
34
43
506
1.2
53
66
795
4.6
63
75
145
3.6
10
12
263
4.1
63
76
760
0.7
25
29
241
5.0
54
62
855
3.0
65
81
260
2.3
15
18
5,401
4.5
214 267
64.7
FY16 FY17 FY16
10.9 8.9 132
22.2 18.4 285
15.3 12.9 218
35.5 26.3 184
13.0 10.3 328
22.7 18.3 287
19.9 14.6 62
11.9 9.5
50
7.6
6.2 136
10.6 7.5
28
18.8 15.7
10.5 8.4 229
8.9
6.5 220
8.2
4.7 412
10.2 8.6 182
6.8
5.3 578
6.2
4.7 317
9.5 15.0 122
3.6
2.9 478
6.8
5.1 280
3.3
2.5 141
4.5
3.5 180
4.9
3.6 157
4.7
3.4 130
9.1
7.1
22.0 17.2 167
14.7 11.7 182
9.6
7.7 358
12.7 10.6 208
14.9 12.6 107
4.2
3.5 302
30.7 26.0 152
4.5
3.9 285
13.1 10.6 460
17.3 14.1 111
25.3 20.2 1,342
15.8 13.4
FY16
1.81
3.83
2.57
3.91
2.41
3.31
2.22
1.36
0.78
0.82
2.86
255 1.17
244 0.79
444 0.45
201 1.17
628 0.60
355 0.69
124 0.33
526 0.38
304 0.58
158 0.38
196 0.44
173 0.45
141 0.35
0.86
192 5.01
217 2.75
408 1.41
239 3.82
116 1.09
360 0.87
180 5.00
330 0.85
524 1.86
125 2.33
1,566 4.02
2.82
FY17 FY16 FY17 FY16 FY17
1.53 1.56 1.58 15.0 15.6
3.30 1.89 1.86 18.4 19.2
2.21 1.77 1.80 18.0 18.4
3.41 1.18 1.49 13.9 14.5
2.03 1.69 1.75 19.9 21.3
2.87 2.03 2.09 18.0 16.8
1.93 1.07 1.15 11.8 14.1
1.23 1.07 1.12 12.0 13.6
0.71 0.85 0.92 10.7 12.1
0.76 0.47 0.59 8.2 10.5
2.51
1.04 0.70 0.76 11.7 13.0
0.71 0.57 0.70 9.2 11.6
0.42 0.23 0.36 5.6 9.2
1.06 0.62 0.67 11.9 12.8
0.55 0.46 0.52 9.4 10.9
0.62 0.56 0.64 11.7 13.7
0.33 0.16 0.09 3.5 2.2
0.34 0.62 0.69 11.1 12.6
0.53 0.56 0.67 8.7 10.9
0.34 0.54 0.64 12.3 14.7
0.41 0.55 0.62 10.3 12.2
0.41 0.58 0.69 9.5 11.9
0.32 0.36 0.44 7.7 10.0
0.79
3.94 2.60 2.60 23.6 24.4
2.31 1.50 1.56 20.3 21.4
1.24 1.27 1.29 15.6 17.3
3.32 3.91 3.79 32.3 33.5
0.99 1.75 1.83 8.8 9.8
0.73 3.22 3.23 22.9 22.9
4.22 2.16 2.12 17.5 19.2
0.73 3.06 3.12 20.3 20.2
1.63 2.18 2.48 14.7 16.5
2.08 2.32 2.47 14.2 15.6
3.45 3.01 2.91 19.1 18.3
2.47
Source: MOSL
17 August 2015
6

Power Finance Corporation
Financials and valuations
Income Statement
Y/E March
Interest on loans
Interest exp & other charges
Net Financing income
Change (%)
Other operating income
Exchg Gain/(loss) on Forex loans
Other Income
Net Income
Change (%)
Employee Cost
Administrative Exp
Depreciation
Operating Income
Change (%)
Total Provisions
% to operating income
PBT (post prior period adj)
Tax (Incl Deferred tax)
Tax Rate (%)
PAT
Change (%)
Adjusted PAT (Post Forex)
Change (%)
Proposed Dividend (Incl Tax)
2010
78,523
50,599
27,924
33.5
1,498
1,038
748
31,208
49.7
717
341
38
30,113
51.0
-21
-0.1
30,135
6,562
21.8
23,573
58.6
22,760
35.9
6,043
2011
97,605
64,606
32,999
18.2
3,680
-264
321
36,736
17.7
671
255
51
35,759
18.8
317
0.9
35,441
9,246
26.1
26,196
11.1
26,391
16.0
6,986
2012
126,025
84,940
41,085
24.5
4,124
-1,676
223
43,756
19.1
721
519
54
42,462
18.7
1,428
3.4
41,026
10,725
26.1
30,301
15.7
31,539
19.5
9,204
2013
168,876
110,285
58,592
42.6
4,594
-1,320
64
61,930
41.5
809
584
57
60,479
42.4
809
1.3
59,670
15,474
25.9
44,196
45.9
45,174
43.2
10,749
2014
211,210
132,933
78,277
33.6
6,716
-2,550
150
82,593
33.4
851
1,410
49
80,283
32.7
4,700
5.9
75,583
21,406
28.3
54,178
22.6
56,005
24.0
13,841
2015
248,280
158,644
89,636
14.5
8,773
-4,470
455
94,394
14.3
858
1,253
61
92,222
14.9
8,440
9.2
83,782
24,189
28.9
59,594
10.0
62,773
12.1
13,994
(INR Million)
2016E
2017E
268,170
298,726
167,904
183,479
100,266
115,246
11.9
14.9
9,651
10,616
-2,500
-2,500
300
325
107,716
123,687
14.1
14.8
987
1,135
1,441
1,657
67
74
105,222
120,821
14.1
14.8
8,955
9,480
8.5
7.8
96,267
111,342
26,955
31,176
28.0
28.0
69,313
80,166
16.3
15.7
71,113
81,966
13.3
15.3
17,765
20,547
(INR Million)
2016E
2017E
13,200
13,200
360,539
420,159
373,740
433,359
1,893
1,893
375,632
435,252
1,064
958
2,072,954 2,375,032
10.4
14.6
2,449,650 2,811,242
10,216
12,259
20.0
20.0
2,453,200 2,810,689
13.0
14.6
789
947
-14,555
-12,654
2,449,650 2,811,242
Balance Sheet
Y/E March
Capital
Reserves & Surplus
Net Worth
Deferred Tax Liability
Networth (incl DTL)
Interest subsidy from GoI
Borrowings
Change (%)
Total Liabilities
Investments
Change (%)
Loans
Change (%)
Net Fixed Assets
Net Current Assets
Total Assets
E: MOSL Estimates
2010
11,478
121,130
132,608
470
133,077
6,635
671,084
28.7
810,796
314
-12.4
798,558
23.9
745
11,180
810,796
2011
11,478
140,347
151,825
830
152,655
4,519
855,986
27.6
1,013,159
539
71.4
995,707
24.7
767
16,146
1,013,159
2012
13,199
193,876
207,075
874
207,950
3,760
1,101,259
28.7
1,312,969
592
9.8
1,300,718
30.6
765
5,740
1,312,969
2013
13,200
227,341
240,541
2,198
242,739
1,460
1,395,830
26.7
1,640,029
1,615
172.9
1,603,670
23.3
743
29,221
1,640,029
2014
13,200
267,638
280,838
2,742
283,580
1,314
1,592,150
14.1
1,877,044
3,522
118.1
1,892,310
18.0
706
-26,586
1,877,044
2015
13,200
308,992
322,192
1,893
324,085
1,183
1,877,732
17.9
2,202,999
8,513
141.7
2,170,422
14.7
658
23,405
2,202,999
17 August 2015
7

Power Finance Corporation
Financials and valuations
Ratios
Y/E March
Spreads Analysis (%)
Avg. Yield - on Financing portfolio
Avg Cost of funds
Interest Spread
Net Interest Margin
Profitability Ratios (%)
RoE
Adjusted RoE
RoA
Adjusted RoA
Efficiency Ratios (%)
Int. Expended/Int.Earned
Other operating Inc./Net Inc.
Other Income/Net Income
Op. Exps./Net Income
Empl. Cost/Op. Exps.
Asset-Liability Profile (%)
Loans/Borrowings Ratio
Assets/Networth (x)
Debt/Equity (x)
Net NPAs to Adv.
2010
10.9
8.4
2.5
3.9
2011
10.9
8.6
2.3
3.7
2012
11.0
9.1
1.9
3.6
2013
11.6
9.4
2.2
4.0
2014
12.1
8.9
3.2
4.5
2015
12.2
9.1
3.1
4.4
2016E
11.6
8.5
3.1
4.3
2017E
11.4
8.3
3.1
4.4
19.0
18.3
3.2
3.1
18.3
18.5
2.9
2.9
16.8
17.5
2.6
2.7
19.6
20.0
3.0
3.1
20.6
21.3
3.1
3.2
19.6
20.7
2.9
3.1
19.8
20.3
3.0
3.1
19.8
20.2
3.0
3.1
64.4
4.8
2.4
3.5
65.4
66.2
10.0
0.9
2.7
68.7
67.4
9.4
0.5
3.0
55.7
65.3
7.4
0.1
2.3
55.8
62.9
8.1
0.2
2.8
36.8
63.9
9.3
0.5
2.3
39.5
62.6
9.0
0.3
2.3
39.6
61.4
8.6
0.3
2.3
39.6
119.0
6.1
5.1
0.0
116.3
6.6
5.6
0.2
118.1
6.3
5.3
0.9
114.9
6.8
5.8
0.6
118.9
6.6
5.7
0.5
115.6
6.8
5.8
0.9
118.3
6.5
5.5
0.8
118.3
6.5
5.5
0.8
Valuations
Book Value (INR)
BV Growth (%)
Price-BV (x)
EPS (INR)
EPS Growth (%)
Price-Earnings (x)
Adjusted EPS (INR)
Adj EPS Growth (%)
Price-EPS (x)
Dividend
Dividend Yield (%)
E: MOSL Estimates
115.9
15.1
20.5
19.7
19.8
35.9
4.5
133.0
14.7
22.8
11.1
23.0
16.0
5.0
157.5
18.5
1.5
23.0
0.6
10.6
23.9
3.9
10.2
6.0
2.5
183.9
16.7
1.3
33.5
45.8
7.3
34.2
43.2
7.1
7.0
2.9
214.8
16.8
1.1
41.0
22.6
5.9
42.4
24.0
5.7
9.0
3.7
245.5
14.3
1.0
45.1
10.0
5.4
47.6
12.1
5.1
9.1
3.7
284.6
15.9
0.9
52.5
16.3
4.6
53.9
13.3
4.5
11.6
4.8
329.7
15.9
0.7
60.7
15.7
4.0
62.1
15.3
3.9
13.4
5.5
17 August 2015
8

Power Finance Corporation
Corporate profile: Power Finance Corporation
Company description
Power Finance Corporation, was set up by the
Indian Government (owns: 72.8%) as a Financial
Institution dedicated to power sector financing.
PFC provides project term loans, short-term loans,
equipment lease financing and transitional
financing services for power projects. Company’s
loan book as of 3QFY15 is INR2,039b, where
generation, transmission and distribution sector
constitute 75%, 6% and 3% respectively. PFC’s
clients include state power utilities, private sector
utilities (including IPP), joint sector power utilities
and power equipment manufacturers.
Exhibit 11: Sensex rebased
340
305
270
235
200
Aug-14
Nov-14
Feb-15
May-15
Aug-15
Power Fin.Corpn.
Sensex - Rebased
Exhibit 12: Shareholding pattern (%)
Jun-15
Promoter
DII
FII
Others
72.8
9.7
12.9
4.6
Mar-15
72.8
8.9
13.1
5.2
Jun-14
72.8
10.4
11.5
5.2
Exhibit 13: Top holders
Holder Name
LIC of India
HDFC Standard Life Insurance Company Ltd
% Holding
7.9
1.1
Note: FII Includes depository receipts
Exhibit 14: Top management
Name
M K Goel
R. Nagarajan
A K Agarwal
Manohar Balwani
Designation
CMD & Director (Commercial)
Director (Finance)
Director (Projects)
Company Secretary
Exhibit 15: Directors
Name
M K Goel
Vijay Mohan Kaul*
J N Prasana Kumar*
Yogesh Chand Garg*
*Independent
Name
R Nagarajan
A K Agarwal
B N Sharma
Exhibit 16: Auditors
Name
K B Chandna & Co
N K Bhargava & Co
Type
Statutory
Statutory
Exhibit 17: MOSL forecast v/s consensus
EPS
(INR)
FY16
FY17
MOSL
forecast
52.5
60.7
Consensus
forecast
50.8
56.7
Variation
(%)
3.4
7.1
17 August 2015
9

Power
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