Power Finance Corporation (PFC), a leading player in the Indian financial sector, has reported robust financial performance for the first half of the fiscal year. The company's consolidated profit after tax surged by 17% year-on-year to Rs 16,816 crores, showcasing strong growth and financial stability.

Key Financial Highlights

PFC's financial results demonstrate significant improvements across various metrics:

Dividend Announcement

The board of directors has declared an interim dividend of Rs 3.65 per share. This brings the cumulative interim dividend for the current fiscal year to Rs 7.35 per share, reflecting the company's commitment to shareholder returns.

Operational Performance

PFC maintained strong operational metrics in the first half:

• Yield: 9.98%
• Cost of Funds: 7.43%
• Spread: 2.55%
• Net Interest Margin (NIM): 3.62%

The company's Capital to Risk-weighted Assets Ratio (CRAR) stood at a healthy 21.62%, with Tier 1 capital at 19.89%, indicating a strong capital position.

Strategic Developments

PFC has entered its first cross-border financing deal in Bhutan, worth Rs 4,800.00 crores for a 600MW hydro power project. This move signifies the company's expansion into international markets and diversification of its portfolio.

Challenges and Outlook

Despite the overall positive performance, PFC faced foreign exchange losses of Rs 1,100.00 crores in the first half due to Euro appreciation against USD by approximately 8%. However, the company maintains its loan book growth guidance of 10-11% for the current fiscal year, indicating confidence in its future performance.

The improvement in asset quality, with gross NPA declining to 1.87% from 2.71% in the previous year's first half and net NPA reaching a 10-year low of 0.37%, underscores PFC's effective risk management strategies.

As Power Finance Corporation continues to strengthen its position in the power sector financing space, its robust financial performance and strategic initiatives position it well for sustained growth in the coming quarters.

Power Finance Corporation (PFC), a leading non-banking financial company in the power sector, reported a modest 2% year-on-year increase in standalone net profit for the second quarter of fiscal year 2026. The company's performance showed mixed results across various financial metrics.

Financial Highlights

PFC's standalone net profit increased to ₹4,462.00 crore in Q2 FY26, up from ₹4,370.00 crore in the same quarter last year. However, on a sequential basis, the profit declined by 0.90% from ₹4,501.00 crore in the previous quarter.

The company's net interest income showed strong growth, rising 20.00% year-on-year to ₹5,290.00 crore. This growth in interest income contributed significantly to the overall revenue increase.

Total revenue from operations for Q2 FY26 stood at ₹14,755.00 crore, marking a 12.00% increase compared to the same period last year.

Consolidated Performance

On a consolidated basis, PFC reported a more substantial growth in net profit, which increased by 9.00% year-on-year to ₹7,834.00 crore. However, it's worth noting that the consolidated profit fell by 13.00% compared to the previous quarter.

Dividend Announcement

The Board of Directors has declared a second interim dividend of ₹3.65 per share for the fiscal year 2026. The record date for this dividend has been set as November 26, 2025.

Market Performance

Despite the financial results, PFC's shares have faced downward pressure in the market:

• Shares declined 2.85% over two trading sessions following the Q2 FY26 results announcement, closing at ₹369.60.
• Over the past year, PFC shares have declined by 22.90%.
• Year-to-date, the stock has seen a decrease of 17.19%.

Outlook

While PFC has shown resilience in its core operations with growth in net interest income and overall revenue, the marginal increase in standalone profit and the decline in consolidated profit on a quarter-on-quarter basis may raise some concerns among investors. The company's ability to maintain profitability in the face of potential challenges in the power sector will be crucial for its future performance.

Investors will likely keep a close eye on PFC's loan book quality, fundraising activities, and the overall health of the power sector as key indicators for the company's future growth prospects.