PFC Q4 Profit Up; RBI NBFC Draft Concerns

Mumbai, May 13 (PTI) State-run non bank lender Power Finance Corporation on Wednesday reported a 3 per cent increase in its March quarter consolidated net profit at Rs 8,598 crore, restricted by prepayments by borrowers amid low interest rates and also reverses due to rupee depreciation.

The company's Chairman and Managing Director Parminder Chopra flagged concerns over the RBI's draft norms decreasing the single group exposure to 35 per cent from the present 50 per cent, pointing out that a couple of groups will be higher than the proposed asks.

Commenting on the government's announcement of merging PFC and REC, Chopra said the move will create a financial institution of significant scale and strategic relevance.

The core net interest income fell 11 per cent to Rs 10,833 crore during the reporting quarter, probably due to a narrowing of the net interest margin to 3.55 per cent in FY26 and a 7 per cent growth in loan book.

Chopra explained that a lowering of interest rates scenario like the one seen last fiscal year leads to prepayments, and added that the loan book would have been higher at nearly 11 per cent if not for the prepayments by borrowers.

However, the company does not expect any more rate cuts by the Reserve Bank of India in FY27, and is aiming for a loan book growth of 10 per cent in FY27.


It is aiming to borrow Rs 1.6 lakh crore in FY27 to fund the loan growth, she said. However, it has not decided on the exact break-up between domestic and foreign sources of funds given the ongoing geopolitical volatilities, Chopra added.

Power distribution companies, thermal power projects, expansion in nuclear power capacity and infrastructure sectors are the pockets witnessing higher demand, she said.

The company does not see any stress in loan repayments because of the West Asia conflict, but the rupee depreciation has extracted a cost, Chopra said, adding that it led to a mark-to-market loss of Rs 1,500 crore in FY26.

A provision reversal of Rs 1,800 crore from money set aside against stressed projects, which were subsequently resolved, helped the overall profit in the fiscal year gone by, Chopra said.

It made an additional Rs 1,000 crore of provision under the expected credit loss framework, she said.

The PFC scrip closed 1.23 per cent up at Rs 446.10 apiece on the BSE on Wednesday, as against a 0.07 per cent rise in the 30-share benchmark.