PFC Q1 net may grow 24% to Rs 1,200 cr, asset quality key
Analysts expect loan growth of PFC to remain healthy at over 20 percent Y-o-Y. Advances had grown 23 percent in Q4 - the generation segment (79 percent of loans) was the largest contributor.
August 02, 2013 / 14:24 IST
State-owned Power Finance Corporation (PFC) will announce its first quarter earnings today. Analysts on an average expect profit after tax of the non-banking finance company to grow by 24 percent year-on-year to Rs 1,200 crore, according to a CNBC-TV18 poll.
Net interest income may rise by 26 percent to Rs 1,757 crore in April-June quarter from Rs 1,394 crore in a year ago period. Key factorsAnalysts expect loan growth to remain healthy at over 20 percent Y-o-Y. Advances had grown 23 percent in Q4 - the generation segment (79 percent of loans) was the largest contributor.Margins could moderate Q-o-Q, say analysts.Currency depreciation might result in an MTM loss in first quarter (forecast is Rs 50-69 crore) as against a gain of Rs 90 crore Y-o-Y; hence the PAT percentage growth could slow down.Also Read - PFC Q1 net seen up 20.4% at Rs 1239 cr: Motilal OswalAsset quality will be key to watch out for because accounts such as Suzlon Energy could be classified as a non-performing asset (NPA) could spike up gross NPA and net NPA. Overall pace of growth is expected to be slower Y-o-Y, say analysts.Suzlon is not an NPA so far. PFC is not a part of the Suzlon corporate debt restructuring (CDR) package as the loans were on account of purchase of capital equipment and not working capital in nature. In March quarter, asset quality improved due to up gradation of an NPA accounts worth over Rs 200 crore. Outstanding restructured book was worth Rs 7,000 crore as of Q4 with Sasan UMPP at Rs 1,090 crore and Suzlon at Rs 920 crore. Sasan is restructured on account of delay in commissioning the asset and not inability to pay.PFC has been in focus on the back of reports that vigilance enquiries initiated against Satnam Singh (his term ended on Wednesday). Complaints were related to loans being extended to Suzlon (Rs 800-900 crore) and Videocon (Rs 1000-2000 crore for the Mozmbique block i.e. for oil and gas assets that will help the power sector). PFC has said the loan was just sanctioned to Videocon and was development of hydrocarbon assets in Brazil + Mozambique. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
