LISTING |
|
|
Rs 218 |
|
Rs230/Rs85 |
|
Rs10 |
PE Ratio |
11.5 |
Market Cap |
Rs 24860 crore |
COMPANY OVERVIEW:
Power Finance Corporation ltd was established as a Financial Institution dedicated to power sector financing and committed to integrated development of the power and associated sectors.
PFC is providing large range of financial Products and services like project term loan, lease financing , direct discounting of bills, short term loan, consultancy services etc for various power projects in Generation, Transmission, Distribution sector as well as for Renovation & Modernization of existing power projects.
Vision:
To be the leading institution in financing for sustainable development of Indian power sector and its linkages with an eye on global operation.
PRODUCT MIX:
PRODUCT |
SALES(In crore) |
% of Total |
INTEREST |
Rs4931 crore |
98.04% |
SERVICE CHARGES |
Rs60.37 crore |
1.2% |
LEASE & OTHER INCOME |
Rs23.75 crore |
0.47% |
CONSULTANCY INCOME |
Rs14.16 crore |
0.28% |
KEY RATIONAL FOR INVESTMENT:
We expect loan growth to power sector to be robust in the coming quarter which will increase the top line and bottom line of the company.
Lower cost of fund will drive the margin in the next quarter also.
PFC showed a jump in Net profit by 87.5% in Q1FY2010 as compared with similar period last year.
Government support to power sector and increasing outlay on this sector to achieve the higher growth in economy will benefit PFC in medium and long run.
SHAREHOLDING PATTERN:
|
|
NO. OF SHARES |
% OF TOTAL |
PROMOTERS |
1030450000 |
|
89.78% |
|
INSTITUTION |
84893932 |
|
7.40% |
|
GENERAL PUBLIC |
32422768 |
|
2.82% |
|
GRAND TOTAL |
1147766700 |
|
100% |
|
FINANCIAL:
|
|
31/03/06 |
31/03/07 |
31/03/08 |
31/03/09 |
TOTAL INCOME |
3127.59 |
3926.31 |
5039.92 |
6583.54 |
YoY %change |
|
25.53% |
28.36% |
30.60% |
EXPENDITURE |
-33.44 |
-85.08 |
-100.51 |
-339.24 |
PBDITA |
|
3094.19 |
3841.23 |
4939.41 |
6244.3 |
YoY %change |
|
24.14% |
28.58% |
26.42% |
DEPRECIATION |
-1.42 |
-3.81 |
-4.5 |
-4.12 |
PBIT |
|
3092.77 |
3837.42 |
4934.91 |
6240.18 |
INTEREST |
|
-1832.82 |
-2334.56 |
-3146.95 |
-4249.71 |
PBT |
|
1259.95 |
1502.86 |
1787.96 |
1990.47 |
TAX |
|
-293.88 |
-524.5 |
-579.28 |
-20.51 |
PAT |
|
966.07 |
978.36 |
1208.68 |
1969.96 |
YoY %change |
|
1.27% |
23.50% |
63% |
Key Highlights:
CAGR IN Total Income is 28.2%.
CAGR IN PBDITA is 26.37%.
CAGR IN Net Profit is 26.8%.
RATIOS:
|
|
31/03/06 |
31/03/07 |
31/03/08 |
31/03/09 |
EPS |
|
8.417444 |
8.524527 |
10.53132 |
17.16442 |
PBDITA % |
|
98.93209 |
97.83308 |
98.00572 |
94.84715 |
NPM |
|
30.88864 |
24.91805 |
23.98213 |
29.9225 |
INTEREST COVER |
1.688193 |
1.644139 |
1.56863 |
1.468623 |
Key Highlights:
EPS has increased at CAGR of 28.2% over the past four years.
PBDITA margin has declined by 4% in four years period.
NPM remained almost flat.
Interest Cover too remained flat.
COMPARISON OF Q4FY2009 WITH Q4FY2008:
|
|
Q1FY2009 |
% CHANGE |
Q1FY2010 |
TOTAL INCOME |
1441.6 |
35.70% |
|
1956.06 |
EXPENDITURE |
-74.04 |
|
|
-17.07 |
PBDITA |
|
1367.56 |
41.70% |
|
1938.99 |
DEPRECIATION |
-0.94 |
|
|
-0.89 |
PBIT |
|
1366.62 |
|
|
1938.1 |
INTEREST |
|
-925.59 |
|
|
-1187.6 |
PBT |
|
441.03 |
|
|
750.5 |
TAX |
|
-144.73 |
|
|
-195.58 |
PAT |
|
296.3 |
87.50% |
|
554.92 |
Key Highlights:
Total Income zoomed by 35.7% in Q1FY2010 as compared with similar period last year.
PBDITA Increased by 41.7% in Q1FY2010 as compared with similar period last year.
Net Profit moved up by 87.5% in Q1FY2010 as compared with similar period last year.
VALUATION & OUTLOOK:
The stock is currently trading at 11.5X to FY2010E earning. We expect FY2010E EPS to be around Rs 19. Since the company is expected to grow rapidly we value the company at 20X, the fair price we arrive is Rs380.
We expect PFC to outperform the market as power is the back bone of the industrial growth. There is shortage of power in the country. We need more power and to generate power finance is required. Company like PFC will benefit in big way.
CONCLUSION:
Investor should invest on this counter with holding period of at least 8 to 9 month. As the market has moved up in short period of time investor could pick the stock on every dip to increase the margin of safety.
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