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Power Finance Corporation 
(21:49, 13 Feb 2018)
Power Finance Corporation has reported 18% decline in the net profit to ₹ 1604.43 crore in the quarter ended December 2017 (Q3FY2018). Net Interest Income (NII) of the company dipped 30% to ₹ 1966 crore. The interest income of the company was impacted as interest income amounting to ₹ 653.68 crore in Q3FY2018 was not recognized relating SDR / OSDR / S4A scheme invoked in case of loan asset worth ₹ 10161.73 crore end December 2017. The company has also not recognized interest income of ₹ 204.26 crore in Q3FY2018 relating one standard account with High Court stay on its classification as NPA.

The company has showed declined in Net Interest Margin (NIM) to 3.85% in Q3FY2018. The interest spreads of the company also dipped to 2.85% in Q3FY2018 from 3.01% in the preceding quarter and 3.54% in the corresponding quarter last year.

However, the company has further improved its asset quality reducing Gross NPA ratio to 5.71% and Net NPA ratio to 4.23% end December 2017. Two loan accounts have been upgraded to standard assets and NPA provision of ₹ 674.82 crore and ₹ 1773.94 crore have been reversed during Q3FY2018 and 9MFY2018.

Quarterly performance

The company has posted 10% decline in Income from operations at ₹ 6127.46 crore in the quarter ended December 2017. Other income also fell 18% to ₹ 193.13 crore. Total income dipped 11% to ₹ 6320.59 crore in the quarter ended December 2017. The interest expense increased 7% to ₹ 4359.49 crore.

The employee expenses surged 28% to ₹ 37.07 crore, while the other expenditures fell 6% to ₹ 29.18 crore in the quarter ended December 2017.

The ensuing Gross Profit stood at ₹ 1894.85 crore in the quarter ended December 2017, showing a decline of 36% on yoy basis.

The depreciation during the quarter under review stood at ₹ 1.87 crore up from ₹ 1.39 crore in Q3FY2017. The company has written back NPA provisions worth ₹ 478.25 crore in Q3FY2018 (charge of ₹ 51.19 crore in Q3FY2017), and also written back restructured advances provision of ₹ 87.27 crore (charge of ₹ 36.93 crore). Standard assets provisions increased to ₹ 325.67 crore from ₹ 32.02 crore.

The Profit before Tax declined 25% to ₹ 2112.35 crore in the quarter ended December 2017. The Tax expense during the quarter under review fell 42% to ₹ 507.92 crore. PAT dipped 18% to ₹ 1604.43 crore in Q3FY2018 over Q3FY2017.

Highlights:

Loan assets of the company increased 10% to ₹ 262109 crore at end December 2017 compared to ₹ 237432 crore at end December 2015.

Outstanding sanctions of the company (excluding R-APDRP) stood at ₹ 152202 crore at end December 2017.

Disbursement of the company (excluding R-APDRP) declined 10% to ₹ 10893 crore in Q3FY2018 compared to ₹ 12150 crore in Q3FY2017.

NIM of the company declined 109 bps yoy to 3.85% in Q3FY2018. The yield on assets eased 98 bps to 10.95%, while cost of funds dipped 28 bps yoy to 8.10%.

GNPA dipped 262 bps qoq to 5.71%, while NNPA plunged 246 bps qoq to 4.23% at end December 2017.

Capital Adequacy Ratio stood at 20.75% at end December 2017 compared to 22.28% a year earlier.

Outstanding Borrowings increased by 10% to ₹ 213706 crore at end December 2017, driven by bonds borrowing rising 7% to ₹ 190888 crore at end December 2017. Term loans increased 17% to ₹ 10556 crore, while short-term loans jumped 86% to ₹ 12263 crore at end December 2017.

Book value of the company stood at ₹ 150.43 per share at end December 2017. Adjusted Book value (net of NNPA and 25% of restructured advances) stood at ₹ 55.43 per share at end December 2017.

Developments in Q3FY18

- No new additions to private sector Restructured Standard Assets.

- Upgraded from restructured standard category to standard category - MB Power loan of ₹ 1370 crore of Moser Baer Group.

- Decrease in NPA Assets by 30% from ₹ 21503 crore to ₹ 14977 crore.

- Upgrade from NPA to restructured standard category - Chhattisgarh PGCL (State) loan of ₹ 6748 crore.

- Loan to J&K SPDCL (State) of ₹ 1.64 crore moved out of NPA category on account of loan being repaid fully in October.

Additions to NPA in Q3FY2018 were ₹ 224 crore.

Enhanced provisioning under RBI Schemes of ₹ 445 crore (approx) made on certain loan assets for cases under resolution.

Expected Upgradations in Q4FY2018

Restructured Standard category to Standard category - Singareni Collieries (Telangana State) loan of ₹ 4000 crore (approx).

YTD Financial Performance

For the nine months ended December 2017 (9MFY2018), Power Finance Corporation reported 5% decline in Income from Operations at ₹ 19804.34 crore, while interest expense increased 4% to ₹ 12823.86 crore, leading to a 7% decline in NII to ₹ 5485 crore. Other income increased 20% to ₹ 556.72 crore. The staff cost increases 27% to ₹ 114.97 crore, while the other expenditure moved up 13% to ₹ 260.52 crore. The ensuing Gross Profit declined 16% to ₹ 7201.17 crore in 9MFY2018. The Depreciation stood at ₹ 4.45 crore, while provisions dipped 47% to ₹ 315.36 crore in 9MFY2018. The profit before Tax fell 14% to ₹ 6881.36 crore in 9MFY2018. The Tax expense eased 20% to ₹ 1961.74 crore. PAT declined 11% to ₹ 4919.62 crore in 9MFY2018.

Power Finance Corporations: Standalone Results

 

Particulars1712 (3)1612 (3)Var %1712 (9)1612 (9)Var %1703 (12)1603 (12)Var %
Income from operations6127.466827.36-1019804.3420756.31-526270.0827079.44-3
Other Income193.13235.72-18556.72465.1920748.49484.8754
Total Income6320.597063.08-1120361.0621221.50-427018.5727564.31-2
Interest Expenses4359.494061.68712823.8612333.25416432.6916473.810
Other expenses66.2559.9211336.03315.507375.49320.2217
Gross profit1894.852941.48-367201.178572.75-1610210.3910770.28-5
Depreciation1.871.39354.453.92145.566.17-10
Provisions-219.37120.79LP315.36595.81-475095.041703.45199
Profit before tax2112.352819.30-256881.367973.02-145109.799060.66-44
Provision for tax 507.92869.39-421961.742437.14-202983.402947.181
Net profit1604.431949.91-184919.625535.88-112126.396113.48-65
EPS*(₹)24.3129.5424.8527.968.0523.16
* Annualized on current equity of ₹ 2640.08 crore. Face Value: ₹ 10, figures in ₹ Crore
LP: Loss to Profit, PL: Profit to Loss
Source: Capitaline Corporate Database

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