PFC Records Growth in Both Topline and Bottomline in COVID Affected Q1

PFC has reported strong financial results for COVID affected Q1, recording growth both in its topline and bottomline for the quarter.

Amid rising strain in the power sector with faltering demand and increasing indebtedness, state-owned power sector financing institution, Power Finance Corporation (PFC) has reported a strong outcome in its financial results for COVID affected April-June quarter (Q1) of the financial year. The firm has recorded growth both in its topline and bottomline for the quarter, beating all industry expectations.

The NBFC, which along with Rural Electrification Corporation (REC) is implementing government’s Rs 90,000 crore liquidity schemes for financially stressed Discoms, has reported 23 percent increase in its consolidated net profit to Rs 3,557 crore in the quarter ending June 30, of the current financial year as compared to Rs 2,900 crore net profit reported in first-quarter period of previous fiscal.

During the quarter, the company also witnessed a 16 percent increase in consolidated revenue from operations at Rs 16,914 crore as against Rs 14,595 crore for Q1 FY20.

The company not only improved its topline and bottomline but has also seen a reduction in consolidated net NPA ratio from 4.20 percent in Q1 FY20 to 3.15 percent in Q1 FY21 due to the resolution of stressed assets. Net NPA also dropped by 124 bps from last year due to the resolution of two stressed assets i.e. Essar Power Transmission Ltd. And Suzlon Energy Ltd. The company’s Net NPA ratio as on June 30 is at 3.41 percent as compared to 4.65 percent in Q1 FY20, the lowest in the last 4 years.

On a standalone basis, the company reported a 23 percent jump in net profit to Rs 1,700 crore.

In June, we had reported that the government’s economic response against China may see public sector financiers restricting funding of projects that use equipment from the neighbouring country. The practice would first be adopted in the power sector, where state-owned PFC, REC and Indian Renewable Energy Development Agency (IREDA) propose to restrict financing to states that are developing projects in power generation, transmission and distribution that use Chinese equipment.

As the bulk of the funds to the power sector are provided by these three institutions, the restriction is expected to be effective in checking large-scale import of Chinese gear. The move is likely to affect solar sector projects the most where Chinese import is to the extent of 80 percent.

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Ayush Verma

Ayush Verma

Ayush is a staff writer at saurenergy.com and writes on renewable energy with a special focus on solar and wind. Prior to this, as an engineering graduate trying to find his niche in the energy journalism segment, he worked as a correspondent for iamrenew.com.

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