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Power Finance Corporation (PFC) had a good day at the office. The stock gained over 2 per cent on Thursday intraday (July 10, 2025) after Morgan Stanley initiated coverage with an ‘Overweight’ rating and a price target of Rs 508, a 20 per cent upside from current levels.
What’s driving the rally
- Analyst thumbs-up: Morgan Stanley sees 12 per cent annual loan growth through FY28, and steady ROE in the 17-19 per cent range.
- Valuation comfort: At a P/E of over six and P/B ratio slightly above one, it’s still cheap.
- Steady income: The dividend yield of nearly 4 per cent makes it attractive for conservative investors.
- Sector strength: New RBI norms have improved visibility for infrastructure financiers like PFC and peer REC.
Why this matters
PFC isn't the flashiest stock out there. But when a global name like Morgan Stanley throws its weight behind a PSU financier, the Street pays attention.
The report highlighted PFC’s predictable earnings, high dividend yield, and low valuations. For investors seeking stability in a volatile market, PFC is starting to appear as a solid anchor.
What PFC does
PFC is the government’s go-to lender for the power sector, funding everything from generation and transmission to renewables. It’s a Maharatna PSU and controls a loan book of over Rs 8 lakh crore.
Here’s a table summarising the company’s fundamentals.
| Metric | Value |
|---|---|
| Market cap | Rs 1.41 lakh crore |
| P/E ratio | 6.1 |
| P/B ratio | 1.2 |
| ROE | 28.6 per cent |
| ROCE | 10.4 per cent |
| EPS (TTM) | Rs 69.7 |
| Book value | Rs 356.8 |
| Dividend yield | 3.7 per cent |
How Value Research rates it
- Overall: 4/5
- Quality: 10/10
- Growth: 6/10
- Valuation: 6/10
- Momentum: 2/10
The bottom line
Today’s move may just be the start. With big broker backing and improving visibility in the infra lending space, PFC looks ready to attract more long-term capital. It won’t make headlines every day, but it might just keep your portfolio steady when others slip.
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Disclaimer: This is not a stock recommendation. This story was created with the assistance of artificial intelligence and has been reviewed by human experts for accuracy and is intended for informational purposes only. Please do your own research or consult a financial advisor before making investment decisions.
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