Posted on February 13, 2025, by Niftynews
Shares of Power Finance Corporation (PFC) Ltd. experienced a 3% increase on February 13, 2025, following the release of its December quarter results for the financial year 2025 (Q3 FY25). Despite softer growth in disbursements, PFC share price gained momentum, driven by strong margins, forex gains, and a positive outlook for asset recovery, particularly from stressed assets like KSK Mahanadi.
Analysts Project 75% Upside for PFC Share Price
Global brokerage firm Macquarie has reiterated an ‘Outperform’ rating on PFC shares, with a revised target price of ₹660. This target reflects a potential upside of 75% from its last closing price. The brokerage highlights several factors that make PFC shares attractive, including low credit risk, solid returns driven by write-backs from stressed assets, and an inexpensive valuation at just 0.7 times core FY27E price-to-book (P/B) value.
Despite slightly softer growth in Q3 FY25, PFC share price remained strong due to the company’s strong margins and higher net interest margins, which surpassed analyst expectations. Additionally, the profit beat was supported by forex gains, which further buoyed PFC share price performance.
Strong Earnings Despite Softer Disbursements
While PFC’s growth in the quarter was slightly below expectations, the company’s earnings were boosted by healthy margins and forex gains. PFC share price has benefitted from a solid return on equity, primarily driven by write-backs from stressed assets like KSK Mahanadi.
KSK Mahanadi, which owed ₹32,243 crore to creditors, remains a critical focus for PFC. The company is expected to recover 100% of its principal from this stressed asset, significantly strengthening its financial position. PFC holds the largest exposure to KSK Mahanadi at ₹3,428 crore, and the resolution of this asset could result in substantial write-backs, which will likely continue to drive the PFC share price upward.
PFC Management Maintains Positive Growth Outlook
Despite a slight slowdown in disbursements, PFC management remains optimistic about the company’s prospects for the rest of FY25. The company is targeting a 14% growth rate for the full year, with growth expected to be driven by strong disbursements in both conventional and renewable energy generation, as well as in power distribution projects.
PFC share price is also expected to benefit from its healthy margins, although there could be some marginal compression in the near term due to higher disbursements in the renewable energy segment. The management also emphasized that its strong financial position, coupled with the recovery of stressed assets, will provide stability to PFC share price in the long term.
Dividend Announcement Adds Appeal for PFC Shareholders
In addition to its solid earnings report, PFC also declared a third interim dividend of ₹3.50 per share for the financial year 2024-25. The record date for the dividend is February 28, 2025, with payments scheduled for March 3, 2025. This dividend payout adds to the appeal of PFC shares, particularly for income-focused investors.
The company’s dividend track record, combined with strong earnings growth and a healthy balance sheet, makes PFC shares an attractive investment for both long-term investors and those seeking reliable income through dividends.
PFC Share Price: Strong Fundamentals, Positive Outlook
Despite a challenging year so far, with PFC share price having declined nearly 16% in 2025, analysts remain bullish on the stock’s long-term prospects. The company’s robust financials, healthy margins, and ongoing resolution of stressed assets position it for future growth.
Analysts, such as those at Macquarie, predict that PFC share price could surge to ₹660, driven by strong asset recovery, healthy disbursements, and continued growth in power generation and distribution sectors. Additionally, the company’s focus on renewable energy projects further strengthens its growth outlook.
Conclusion: Is Now the Time to Buy PFC Shares?
In conclusion, PFC share price presents a promising opportunity for investors looking for growth and stability. The company’s solid earnings, positive outlook on asset recovery, and dividend announcement make PFC shares an attractive proposition. While the stock has faced challenges in 2025, the potential for a 75% upside, as projected by analysts, could offer significant returns for investors.
For those looking to capitalize on PFC share price growth, the combination of strong fundamentals, asset resolution, and an optimistic management outlook makes PFC shares a compelling investment in the power and finance sector.
