Brokerages maintain a positive outlook on Power Finance Corporation (PFC), driven by strong asset quality improvements, disbursement growth, and attractive valuations. Here’s a summary of recommendations and insights from key brokerages:
| Brokerage | Rating | Target Price | Key Highlights |
|---|---|---|---|
| CLSA | Outperform | ₹610 | Notes slow loan growth of 10% YoY; positive on the start of sanctions in the conventional generation segment. Valuations seen as inexpensive with a 1.1x adjusted price-to-book ratio for FY26 and 18% RoE profile. |
| Bernstein | Outperform | ₹620 | Sees improvement in disbursements and asset quality, with full-year guidance retained. |
| UBS | Buy | ₹670 | Notes that net interest income (NII) was in line, with write-backs continuing to support profitability. Q2 results provide better growth visibility in the second half of the fiscal year. |
Key Brokerage Insights
- CLSA: Holds an ‘Outperform’ rating on PFC with a target price of ₹610, citing the initiation of sanctions in the conventional generation segment as a key positive development. Despite slow loan growth, CLSA believes PFC’s valuation is attractive, noting its 1.1x price-to-book ratio for FY26 and an 18% return on equity (RoE) profile.
- Bernstein: Also rates PFC as ‘Outperform,’ targeting ₹620, highlighting improved disbursements and asset quality, while reaffirming PFC’s full-year guidance.
- UBS: Maintains a ‘Buy’ rating with a higher target of ₹670, indicating optimism about PFC’s profitability supported by write-backs. The brokerage views the company’s Q2 performance as providing increased visibility for growth pick-up in the second half of the fiscal year.
Brokerages are largely bullish on PFC, focusing on improved disbursements, strong asset quality, and growth potential in the conventional generation segment. All three brokerages view PFC’s current valuations as attractive, with potential for continued profitability and return on equity improvements.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
