Power Finance Corporation Ltd
NSE:PFC
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Power Finance Corporation Ltd
Power Finance Corporation Ltd. (PFC) stands as a compelling narrative of transformation and influence in India’s power sector, a sector characterized by both its challenges and potentials. Born in 1986 under the auspices of the Indian government, PFC was envisioned to be more than just a financial institution; it aimed to be the financial backbone for a burgeoning nation requiring robust infrastructure. As an established non-banking financial company (NBFC), PFC serves primarily as a financier to the power sector, providing an essential flow of capital to state electricity boards, power generation companies, and various power projects across the nation. Its main arena is the funding of power generation, transmission, and distribution projects, effectively acting as a critical enabler for India's energy security and sustainability initiatives.
The revenue engine of PFC turns by orchestrating loans of significant magnitude, tailored to meet the capital-intensive needs of the power sector. Its business model thrives on the spread between the interest costs at which it borrows funds from the market and the interest rates it charges to its clients. This spread is meticulously managed, given the volatility of interest rate environments and the credit risk inherent in the sector. PFC’s extensive portfolio consists not only of conventional energy projects but also increasingly of renewable energy endeavours, aligning with global and domestic shifts towards sustainable energy solutions. In this dual capacity, PFC doesn’t merely make money; instead, it crafts a narrative of development by empowering India’s ambitious energy landscape, facilitating a transition into a future that balances growth with environmental stewardship.
Power Finance Corporation Ltd. (PFC) stands as a compelling narrative of transformation and influence in India’s power sector, a sector characterized by both its challenges and potentials. Born in 1986 under the auspices of the Indian government, PFC was envisioned to be more than just a financial institution; it aimed to be the financial backbone for a burgeoning nation requiring robust infrastructure. As an established non-banking financial company (NBFC), PFC serves primarily as a financier to the power sector, providing an essential flow of capital to state electricity boards, power generation companies, and various power projects across the nation. Its main arena is the funding of power generation, transmission, and distribution projects, effectively acting as a critical enabler for India's energy security and sustainability initiatives.
The revenue engine of PFC turns by orchestrating loans of significant magnitude, tailored to meet the capital-intensive needs of the power sector. Its business model thrives on the spread between the interest costs at which it borrows funds from the market and the interest rates it charges to its clients. This spread is meticulously managed, given the volatility of interest rate environments and the credit risk inherent in the sector. PFC’s extensive portfolio consists not only of conventional energy projects but also increasingly of renewable energy endeavours, aligning with global and domestic shifts towards sustainable energy solutions. In this dual capacity, PFC doesn’t merely make money; instead, it crafts a narrative of development by empowering India’s ambitious energy landscape, facilitating a transition into a future that balances growth with environmental stewardship.
Profit Growth: Power Finance Corporation reported consolidated profit after tax of INR 15,816 crores for H1 '26, up 17% year-on-year.
Loan Book Expansion: The consolidated loan asset book grew 10% YoY to INR 11,43,370 crores, with standalone loan assets up 14% YoY.
Asset Quality: Gross NPA levels declined to 1.87% (down 84 bps YoY) and net NPA reached a 10-year low at 0.37%.
Dividend: The Board declared an interim dividend of INR 3.65/share, bringing the FY '26 interim dividend to INR 7.35/share.
Guidance Maintained: Management reiterated 10%–11% loan book growth guidance for FY '26 despite competitive pressures and potential prepayments.
ForEx Losses: The company reported INR 1,100 crores in exchange losses for H1 '26 due to euro appreciation; most of the ForEx exposure is hedged.
Renewable Lending: PFC remains India’s largest renewable sector lender, with a renewable loan book of INR 84,680 crores.
Regulatory Updates: Management discussed new RBI project finance rules and draft risk weight norms, stating current provisioning is above regulatory minimums.
