Macquarie has maintained an ‘Outperform’ rating on Power Finance Corporation (PFC), setting a target price of ₹660 per share, indicating a 75% upside potential from the current market price of ₹377.00.
Despite disappointing growth, PFC’s Q3 PAT exceeded expectations, driven by higher net interest margins (NIM) and forex gains. However, Macquarie notes that the FY25 loan growth target of 14% YoY appears challenging.
The brokerage expects credit costs to remain negative in the near term, supported by write-backs from stressed assets like KSK Mahanadi. This, coupled with lower credit risk and better growth compared to the previous cycle, reinforces Macquarie’s positive outlook on PFC.
Additionally, PFC’s strong return on equity (ROE), driven by write-backs, and its attractive valuation at 0.7x FY27E core P/B make it a compelling investment opportunity, according to the brokerage.
With stable asset quality, improving profitability, and inexpensive valuations, Macquarie remains bullish on PFC’s long-term prospects.
Disclaimer: The above article is for informational purposes only and does not constitute financial advice. Investors are advised to consult their financial advisors before making any investment decisions.
