Shares of Power Finance Corporation Ltd. opened with gains of up to 5% on Wednesday, buoyed by sustained bullish stances from multiple brokerage firms following the company’s first-quarter earnings report.
Brokerages on PFC
CLSA on PFC
Global brokerage firm CLSA has maintained an ‘Outperform’ rating on PFC, noting that the company’s first-quarter net profit rose 24% year-on-year, exceeding estimates by 5%, primarily due to forex gains.
As per the report CLSA has set a price target of Rs 610 per share, suggesting a potential upside of 28% from Tuesday’s closing price.
CLSA highlighted that while PFC’s loan growth was slower at 10% year-on-year, the company is undergoing transformation projects expected to stabilize soon. The growth guidance for FY25 remains at 12-15%.
The report also adds asset quality showed no new NPA formations or resolutions during the first quarter, though one state utility slipped to Stage 2, causing a slight increase in provision coverage quarter-over-quarter.
Bernstein on PFC
Bernstein has also retained its ‘Outperform’ recommendation for PFC, with a target price of Rs 620 per share, the highest on the street. Bernstein noted a decline in the loan book quarter-on-quarter but emphasized that the management’s guidance remains unchanged.
Bernstein views this quarter’s performance as a temporary setback, with improved visibility on reversing provisions thanks to a favorable bid for the KSK plant. The strategy to hedge 100% of yen borrowings by the end of Q1 appears to be effective.
Elara Capital on PFC
Elara Capital maintains a BUY rating with a price target of Rs 569 per share, noting a favorable risk-reward ratio based on subsidiary valuation adjusted at 1x PABV.
Elara Capital anticipates a slight near-term downshift in stock multiples for PFC due to concerns over controversial developer group exposure and slowing growth momentum.
However, the brokerage expects this to be offset by steady NIM and lower credit costs, supported by chunky account resolutions and effective funding cost management.
Stock Performance In Last One Year
PFC shares have delivered positive returns across various time frames. Over the last three month, the stock has shown a positive return of 16.19%, indicating short-term growth. In the last six months, the performance has been even more impressive, with a substantial increase of 4.43%, showcasing the stock’s resilience and upward momentum.
Year-to-date, PFC shares have surged by 28.02%, emphasizing the stock’s positive trajectory in the current calendar year. Looking back over the last twelve months, the stock has demonstrated significant growth, surpassing 129.41%. These consistent positive returns underscore the stock’s strong performance and appeal to investors.
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