Image Source: The Economic Times
Power Finance Corporation Ltd. (PFC), the Maharatna PSU and a key financier of India’s power sector, has reported stellar financial results for the quarter ended June 30, 2025 (Q1 FY26). The company posted a consolidated net profit of ₹6,866 crore and declared an interim dividend of ₹3.70 per share, reinforcing its reputation as a high-yielding and fundamentally strong stock.
Key Highlights of Q1 FY26 Performance
Total consolidated revenue from operations surged to ₹28,539 crore, reflecting strong growth in interest income and loan disbursements.
Net profit jumped to ₹6,866 crore, up 20% year-on-year, driven by improved asset quality and higher net interest margins.
The Board declared an interim dividend of ₹3.70 per equity share, continuing its consistent dividend payout trend.
Revenue Drivers and Profitability Metrics
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PFC’s robust top-line growth was fueled by:
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Higher disbursements to renewable energy and transmission projects.
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Strong demand for refinancing and working capital loans from state utilities.
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Net interest income (NII) expanded significantly, supported by a healthy loan book and lower cost of funds.
The company’s net interest margin (NIM) improved to 3.68%, up from 3.52% in the previous quarter, indicating better profitability on its lending operations.
Dividend Declaration and Shareholder Rewards
The interim dividend of ₹3.70 per share marks the first payout for FY26 and continues PFC’s tradition of rewarding shareholders generously. With a face value of ₹10 per share, the dividend yield remains attractive for income-focused investors.
Record date for dividend eligibility is August 12, 2025.
Payment is expected on or before August 20, 2025.
This payout follows a cumulative dividend of ₹15.80 per share in FY25, making PFC one of the most consistent dividend-paying PSUs.
Segmental Performance and Strategic Focus
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Renewable Energy Financing The renewable energy loan book grew 32% YoY to ₹84,000 crore, reflecting PFC’s strategic pivot toward green financing.
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Transmission and Distribution Continued investments in grid modernization and smart metering projects contributed to stable growth in this segment.
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Asset Quality Gross NPAs declined to 1.85%, with provisioning coverage at 100% for stressed assets, showcasing prudent risk management.
Market Reaction and Investor Sentiment
Despite the strong financials, PFC’s stock saw mild profit-booking, closing at ₹408.20 on August 6, 2025, down 1.2% from the previous day. Analysts attributed the dip to broader market volatility rather than company-specific concerns.
However, long-term investors remain bullish, citing:
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Strong fundamentals
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High dividend yield
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Strategic alignment with India’s energy transition goals
Outlook for FY26
Management remains optimistic about sustaining double-digit growth in loan book and profitability. Key focus areas include:
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Expansion into EV infrastructure financing
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Increased exposure to solar and wind energy projects
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Continued support for state DISCOMs under revamped reform schemes
PFC also plans to raise ₹1.2 trillion through bonds and term loans in FY26 to support its growing financing needs.
Conclusion
Power Finance Corporation’s Q1 FY26 results reaffirm its position as a cornerstone of India’s energy financing ecosystem. With record profits, a generous dividend, and a forward-looking strategy, PFC continues to deliver value to shareholders while supporting the nation’s infrastructure ambitions.
Source: Business Standard – August 6, 2025 Moneycontrol – August 6, 2025
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