Power Finance Corporation: 4Q26: Earnings beat on provisioning reversal; FY27: 10% loan growth guidance

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Power Finance Corporation: 4Q26: Earnings beat on provisioning reversal; FY27: 10% loan growth guidance

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Power Finance Corporation

4Q26: Earnings beat on provisioning

reversal; FY27: 10% loan growth guidance

Reiterate Rating: BUY | PO: 525.00 INR | Price: 446.00 INR

PAT beat on provisioning reversal; loan growth subdued 14 May 2026

PFC’s 4Q’FY26 earnings were a beat with PAT at INR63bn vs BofA at INR48bn, mainly Equity

on provision write back of INR14bn, driven by provisioning reversal from resolution of

Sinnar Thermal Project (one of the major stressed asset) on which the company has

Key Changesmaintained 80% provisioning. GS-3 moderated by 55bp QoQ to 1.09% with stage-3 PCR

at 86.2% (vs 84.2% QoQ). NIMs (on average gross loans) moderated by 12bp QoQ on (Rs) Previous Current

decline in yields. Loan book growth subdued at 7% YoY with disbursement growth muted 2026E EPS 56.15 60.76

(+1.5% QoQ). Cost to Income rose to 7.7% (vs 5.2% in 3Q), mainly due to relatively 2027E EPS 59.26 59.39

higher net translation/transaction exchange losses. 2028E EPS 64.35 64.19

FY27 guidance: 10% loan book growth; 2.4-2.5% spreads Pujita Pasumarthi >>

Research Analyst

For FY27, PFC expects (i) interest spread on earnings assets at 2.4-2.5% (vs 2.46% in BofAS India

FY26), (ii) prepayment pressure to moderate going forward and targets 10% loan book +91 22 6632 3058 pujita.pasumarthi@bofa.com

growth in FY27 with lending opportunities from hybrid RE projects, short-medium term

loan requirements at DISCOMs and refinancing opportunities in conventional generation

in government sector. PFC sees risk of competition persisting, with banks more willing

to do refinancing on RE portfolio. Regarding the REC merger, PFC mentioned that they Stock Data