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Power Finance Corporation (PFC), India’s largest power-sector NBFC, will report its Q1 FY26 results on August 6, 2025. Coming off a record-setting FY25 and a strong March quarter, expectations are high for another solid quarter marked by robust profitability, improving asset quality, and steady loan growth. This preview examines PFC’s recent performance, outlines what to expect in Q1, compares it with peers like REC, and reveals what its Value Research Stock Ratings indicate about its long-term potential.
FY25 Recap: A Record Year for PFC
PFC closed FY25 with a record consolidated net profit of Rs 30,514 crore, up 15 per cent YoY. The March 2025 quarter alone contributed Rs 8,358 crore in profit, driven by:
- 41 per cent YoY growth in Net Interest Income (NII) to Rs 12,681 crore
- A sharp drop in consolidated gross NPAs to 1.64 per cent and net NPAs to 0.38 per cent, thanks to resolutions like KSK Mahanadi
- Loan book expansion of around 10–12 per cent YoY, reaching Rs 11 lakh crore in consolidated assets
This strong showing, especially on asset quality and profitability, has set a high benchmark as the new fiscal year begins.
Q1 FY26 Expectations: Steady Earnings and Cleaner Books
Given REC’s already-declared Q1 numbers (a 29 per cent YoY rise in net profit to Rs 4,465 crore), analysts expect PFC to mirror this strength. Key expectations include:
- Double-digit YoY growth in consolidated profit
- Stable NII growth, though likely more moderate than Q4’s exceptional spike
- Sustained asset quality with gross NPAs likely staying below 2 per cent
- Continued loan book expansion, especially in the renewable and infrastructure sectors
- Potential margin stability, as funding costs stabilise after the RBI’s policy pause
Management commentary on FY26 loan growth targets, spreads, and NPA resolution pipeline will be closely watched.
Want to compare PFC’s loan book growth and margin trends against similar NBFCs or PSU banks? Use our Stock Screener to filter and analyse companies by asset quality, earnings growth, and return on equity.
PFC vs REC: The Power Finance Duopoly
PFC owns a majority stake in REC Ltd, making REC’s strong Q1 results a bullish lead indicator. In Q4 FY25, PFC outperformed REC in terms of profit growth (11 per cent vs. 5.6 per cent), showcasing better margin expansion and loan book scale.
- FY25 consolidated PAT: PFC – Rs 30,514 cr, REC – Rs 15,884 cr
- PFC’s gross NPAs improved faster: 1.64 per cent vs REC’s 1.9 per cent (standalone)
- PFC’s larger size and diversified portfolio give it an edge in consolidated metrics
While both benefit from government-linked lending and infra focus, PFC’s bigger scale and improving fundamentals make it the heavyweight in this space.
Stock Ratings: Value Research’s View on PFC
As per Value Research Stock Ratings, PFC earns 4/5 stars, signaling a fundamentally strong business. Let’s break it down:
| Score Component | Rating | Commentary |
| Quality | 10/10 | Excellent fundamentals, high RoE (~29 per cent), efficient and stable |
| Growth | 6/10 | Moderate PAT and AUM growth; steady but not explosive |
| Valuation | 6/10 | Low P/E (~5.9x) and P/B (~1.2x); attractive but typical PSU discount |
| Momentum | 3/10 | Weak stock performance in 2025; sentiment remains tepid |
Despite robust earnings and valuations, stock momentum remains poor—down ~7 per cent in CY25. A strong Q1 could shift sentiment.
Outlook: Patience May Pay Off for Value Investors
Despite sluggish momentum, PFC’s strong balance sheet, low NPAs, high RoE, and regulated business model make it a compelling option for long-term investors. If Q1 results deliver as expected, the stock could re-rate—especially with PSU reform and capex narratives gaining momentum.
Not sure whether PFC fits your portfolio? Use the Stock Advisor tool to evaluate PFC’s suitability based on your risk profile and investment horizon.
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 take it with a grain of salt and conduct your own research or consult a financial advisor before making any investment decisions.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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