PFC Shares Zoom 4% As Brokerages Remain Bullish Over Strong Guidance

Power Finance Corporation’s shares opened 4% higher on Wednesday morning after the company recorded strong results in the June quarter which prompted brokerages to keep their bullish stance.

What Happened: PFC recorded a 23% year-on-year rise in net profit to ₹3,717 crore. The company's net interest income, a key financial metric was up 23% to ₹4,328 crore from the previous year while revenue from operations has increased 17% to ₹11,910 crore. 

The lender in the power sector also declared an interim dividend of ₹3.25 per share. The record date for the payment is August 30. 

Brokerage Views: Bernstein maintained an "outperform" call with a target price of ₹620. According to the brokerage firm, Q1FY25 was not a great quarter, but the guidance on growth was retained. The research firm elaborated that Q1 was disappointing due to a sequential decline in the loan book. The brokerage is confident in loan book growth coming in and sees the quarter as a temporary blip. 

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CLSA also maintained an "outperform" call with a target price of ₹610. Q1 net profit increase was 5% ahead of estimates due to forex gains. The brokerage said the loan growth was slow at a 10% year-on-year increase. "The management indicated it is undergoing transformation projects which should settle down soon", the brokerage said. The company has not seen new non-performing asset formation nor new resolutions in Q1, the brokerage added.

Philip Capital also maintained a “buy” call with a target price of ₹590. The research firm expects the company to deliver earnings growth of 16.4% and 6.8% in FY25 and FY26 which will translate into a return on equity of 19.6% and 18.1% in the fiscal respectively.

Price Action: Shares of PFC opened 4.31% higher than previous day’s close at ₹494.50 on Wednesday morning.

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