State-owned Power Finance Corporation (PFC) has reported a net profit of Rs 2,273.6 crore for the quarter ended June 30 on a standalone basis, recording a year-on-year (y-o-y) rise of 33.8% on the back of higher interest income and lower cost of funds.
PFC’s net interest income increased 14.7% annually to Rs 3,525 crore in Q1FY22, while cost of funds fell by 25 basis points (bps) to 7.43% in the same period. State-owned entity has declared an interim dividend of Rs 2.25 per share for FY22.
The company’s net worth at the quarter-end increased 16.6% annually to Rs 54,739 crore. The current net NPA ratio has also come down to 2% against 3.41% in the corresponding quarter in FY21. The net interest spread on earning assets decreased by four basis points annually to 2.96% at Q1FY22-end as yield on assets fell 29 bps to 10.39%.
The company’s loan assets at the end of the quarter increased 4.6% y-o-y Rs 3.69 lakh crore. Out of this, Rs 1.87 lakh crore are loans to conventional power generation projects and Rs 38,271 crore are towards renewable energy projects including large hydro units. Disbursements fell 34.4% y-o-y Rs 11,332 crore in the first quarter. As much as 73% of the disbursements in the quarter were made to government sector projects.
“I’m also particularly pleased that with our consistence performance, we have been able to provide dividend return to our shareholders in the first quarter itself,” PFC’s CMD RS Dhillon said. Out of PFC’s outstanding borrowings of Rs 3.23 lakh crore, 60% are from domestic bonds. The lender’s 16 power projects with an exposure of Rs 15,820 crore are in the NCLT, while resolution of 10 other projects worth Rs 5,334 crore is being pursued outside the tribunal.