Power Finance Corporation Limited (PFC) has released its 40th Annual Report for the financial year ended March 31, 2026, marking a year of record financial performance and significant strategic milestones. The company, a Schedule-A Maharatna Central Public Sector Enterprise under the Ministry of Power and India's largest government-owned NBFC, completed four decades of operations during the year.

Record Standalone and Consolidated Financial Performance

FY2025-26 delivered several first-time milestones for the company. Standalone Profit After Tax crossed ₹20,000 crore for the first time, reaching ₹20,051 crore, while standalone Total Income increased to ₹58,542 crore. On a consolidated basis, the PFC Group reported a combined PAT of ₹33,625 crore, with consolidated Total Income crossing ₹1.15 lakh crore. Standalone net worth surpassed the landmark ₹1 lakh crore milestone.

The following table summarises key standalone and consolidated financial highlights for FY2025-26:

Dividend and Asset Quality

The Board of Directors recommended a final dividend of ₹3.95 per equity share for FY2025-26, in addition to interim dividends of ₹14.60 per share already declared and paid during the year in four tranches. The total dividend for FY2025-26 amounts to ₹18.55 per equity share, described as the highest in the company's history.

Asset quality continued to strengthen during the year. Gross Credit Impaired Assets declined to 1.09% from 1.94% in the previous year, while Net Credit Impaired Assets reduced to 0.15% from 0.39%. Stage-III assets declined to ₹6,323 crore, with total provisions of ₹5,448 crore against Stage III loan assets. Net Stage III assets stood at ₹874 crore as of March 31, 2026, representing 0.15% of total gross loan assets.

Proposed Merger of REC Limited with PFC

A defining strategic development of FY2025-26 was the proposed merger of REC Limited into PFC. The Hon'ble Finance Minister announced the restructuring of PFC and REC in the Union Budget for FY2026-27. The Boards of both companies, at their respective meetings held on 28 June 2026, approved the Scheme of Merger, providing for merger by absorption of REC into PFC on a going concern basis. Eligible shareholders of REC, as on the Record Date (to be notified), will receive 88 equity shares of PFC of ₹10 each fully paid up for every 100 equity shares of REC of ₹10 each fully paid up, in accordance with the share exchange ratio. The merger process is underway.

Upon completion, the merged entity is expected to create one of India's largest specialised infrastructure financing institutions, with an aggregate loan book of around ₹12 lakh crore.

Renewable Energy and Infrastructure Financing

PFC's renewable energy loan book crossed ₹90,000 crore for the first time during the year. As on March 31, 2026, the renewable energy loan book stood at ₹90,135 crore, compared with ₹81,031 crore in the previous year, registering a year-on-year growth of approximately 11.2%. Renewable energy assets now account for 32% of PFC's total outstanding generation loan portfolio, supporting nearly 66 GW of installed renewable energy capacity.

In a notable development, the company sanctioned financial assistance of ₹25,999.60 crore to Nuclear Power Corporation of India Limited (NPCIL) for setting up a nuclear power plant involving a total estimated cost of ₹37,142.28 crore.

Loan assets under the infrastructure and logistics segment increased to ₹52,076 crore as on March 31, 2026, from ₹48,448 crore as on March 31, 2025, registering a growth of approximately 7.5%.

Domestic Borrowings and Liquidity

During FY2025-26, the company mobilised ₹70,683.98 crore from the domestic debt market. The borrowings were raised through a diversified mix of instruments as detailed below:

Foreign currency denominated borrowings aggregated to ₹9,438.79 crore during the year. As on March 31, 2026, the company's High Quality Liquid Assets (HQLA) stood at ₹3,349.05 crore, with an LCR ratio of 148.60%. Total outstanding foreign currency liabilities stood at USD equivalent 10,302 million, with 97% of the portfolio hedged.

Subsidiary Performance: REC Limited

PFC holds 52.63% of the paid-up equity share capital of REC Limited. During FY2025-26, REC recorded a total income of ₹59,187 crore, compared with ₹55,980 crore in FY2024-25. REC reported a net profit of ₹16,282 crore during FY2025-26, as against ₹15,713 crore in the previous financial year.

ESG and Sustainability

PFC's commissioned renewable energy portfolio (excluding large hydro) of 10.6 GW is estimated to avoid approximately 10.39 million tonnes of CO₂ emissions annually, equivalent to removing 2.26 million passenger vehicles from the road annually. The company updated its Green Bond Framework in February 2026, aligning it with international standards. PFC's Morningstar Sustainalytics ESG Risk Rating improved to 15.9 (Low Risk) from 17.3, and its CRISIL ESG Rating increased from 57 to 62.

AGM and Corporate Governance

The 40th Annual General Meeting of Power Finance Corporation Limited is scheduled to be held on Monday, August 31, 2026 at 11:00 A.M. through Video Conferencing/Other Audio Visual Means. The Register of Members and Share Transfer Books will remain closed from August 17, 2026 to August 31, 2026. Remote e-voting will commence at 10:00 A.M. on August 28, 2026 and will end at 5:00 P.M. on August 30, 2026.

During FY2025-26, five Independent Directors were appointed on the Board of PFC. As on March 31, 2026, the Board comprised ten Directors, including four Whole Time Functional Directors, five Independent Directors, and one Part Time Government Nominee Director. The Board met eighteen times during the year.

Power Finance Corporation reported its Q1 financial results, posting a net profit of ₹47.45B rupees against ₹45B rupees in the corresponding quarter of the previous year. Revenue for the quarter came in at ₹138B rupees, broadly in line with ₹138B rupees recorded in the year-ago period, indicating stable top-line performance.

Q1 Financial Performance

The company's quarterly results reflect year-on-year improvement in profitability, with net profit rising from ₹45B rupees to ₹47.45B rupees. Revenue remained flat on a year-on-year basis at ₹138B rupees. The following table summarises the key financial metrics for the quarter:

Key Highlights

• Net profit increased to ₹47.45B rupees from ₹45B rupees on a year-on-year basis.
• Revenue remained stable at ₹138B rupees compared to ₹138B rupees in the year-ago quarter.
• Profit growth was achieved despite flat revenue, indicating improvement in the company's earnings efficiency on a year-on-year basis.

Power Finance Corporation's Q1 results demonstrate resilience in profitability, with net profit expanding year-on-year while revenue held steady. The improvement in the bottom line against a flat revenue backdrop underscores the company's ability to manage its earnings profile during the reported quarter.