CRISIL maintains fundamental grade of 4/5 to PFC
CRISIL Research has come out with its report on Power Finance Corporation (PFC). The research firm has maintained the fundamental grade of 4/5 and valuation grade of 4/5 to the company.
December 04, 2013 / 17:52 IST
CRISIL Research's report on Power Finance Corporation (PFC)
The fortunes of Power Finance Corporation (PFC), India's leading non-banking financial company (NBFC) catering to the power sector, are interlinked with reforms in the sector. Tariff hikes by state power utilities, restructuring of loans to state power utilities and an end to the deadlock on Coal India Ltd's (CIL's) coal supply agreements should have a positive impact on the power sector. However, long-term resolution to fuel supply issues and operational-fiscal discipline by state power utilities hold the key to long-term growth prospects of the sector and PFC. Immediate concerns on NPAs in loans to state sector entities (65 percent of the loan book) are receding though the private sector loan book is under stress. We maintain the fundamental grade of 4/5. We continue to value PFC at a P/B multiple of 0.8x on FY15E book value per share. The fair value is Rs 188. At the current market price of Rs 163, our valuation grade is 4/5.Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report. The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.CRISIL Limited. All Rights Reserved. Published under permission from CRISIL"
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