Home / Companies / News /  PFC Q1 net profit up 34% at 2,274 crore

NEW DELHI: State-run Power Finance Corporation (PFC) reported a 34% year-on-year increase in its net profit to Rs2,274 crore for the quarter ended June (Q1 FY22), the power sector lender said in a statement.

This comes in the backdrop of the government leveraging the largest power sector lenders such as PFC and REC Ltd to instil financial discipline at state-owned electricity distribution companies (discoms).

PFC also declared an interim dividend of Rs2.25 per share. The lender’s loan asset book grew 9.5% to 7.493 trillion at the end of the first quarter of the current financial year.

"I am happy to say that our financial performance has been good, with robust revenues and profitability. As we look forward to an increasingly normal environment, we are committed to delivering strong performance in future also," Parminder Chopra, director (finance), PFC said in the statement.

State-run REC Ltd also earlier registered a 22% increase in its net profit to Rs2,247 crore for the quarter ended 30 June. PFC and REC are group companies after PFC bought a controlling stake in the state-run peer REC Ltd in 2019.

“12% increase in Consolidated Revenue from Operations from Q1’21 - Consolidated Revenues at Rs. 18,965 crore for Q1’22 vs. Rs.16,914 crore for Q1’21," the statement said and added, “Reduction in consolidated net NPA ratio to 1.80% in Q1’22 from 3.15% in Q1’21 due to resolution of stressed assets."

This comes in the backdrop of the Cabinet Committee on Economic Affairs last month approving the marquee 3.03 trillion power discom reform scheme, wherein the centre’s share will be 97,631 crore. The funds will be released to discoms subject to them meeting reform-related milestones, with REC and PFC nominated as nodal agencies for the scheme’s implementation.

“Revamped Distribution Sector Scheme with an outlay of 3,03,758 crore provide significant business opportunity to PFC going forward," the statement said.

PFC and REC have reduced lending rates by 2 percentage points for the current financial year. The losses of state-owned discoms have also dropped sharply by more than a third to Rs38,000 crore in 2019-20 from Rs61,360 crore in FY19.

“28% increase in consolidated profit after tax from Q1’21 - PAT at 4,555 crore for Q1’22 vs. Rs.3,557 crore for Q1’21," the statement said and added, “Aided by profit growth, PFC’s net worth for Q1’22 is up by 17% to 54,739 crore from 46,940 crore in Q1’21."

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