Power Finance Corporation (PFC) witnessed a 3% jump in its share price as Macquarie maintained its ‘Outperform’ rating, setting a target price of ₹660 per share. As of 10:07 AM, the shares were trading 3.46% higher at Rs 386.80.
Despite sluggish growth, PFC’s Q3 profit after tax (PAT) exceeded expectations, primarily due to higher net interest margins (NIM) and forex gains. However, Macquarie has raised concerns about the company’s ambitious FY25 loan growth target of 14% YoY, calling it a challenging goal.
On the positive side, the brokerage expects credit costs to remain negative in the near term, supported by write-backs from stressed assets like KSK Mahanadi. Additionally, PFC benefits from lower credit risk and improved growth compared to previous cycles, reinforcing Macquarie’s confidence in its future performance.
PFC’s robust return on equity (ROE), fueled by asset write-backs, and its attractive valuation at 0.7x FY27E core price-to-book (P/B) ratio make it a compelling investment opportunity. With stable asset quality, increasing profitability, and undervalued stock levels, Macquarie remains optimistic about PFC’s long-term growth potential.
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