Power Finance Corporation Limited · NSE:PFC
Power Finance — Q3 FY2019 Earnings Presentation
25 slides from Power Finance's earnings presentation, February 2019
Slide 1: Performance Highlights, Quarter ended 31st December 2018
Power Finance Corporation Limited A Navratna PSU Performance Highlights Quarter ended 31st December 2018 54EC Foreign Borrowings Renewables 54EC Bonds Funding for a Brighter Tomorrow….
Slide 2: Table of Contents
Table of Contents 1. Highlights 2. Update on PFC-REC acquisition deal 3. Earning Updates 4. Asset Quality 5. Operational Performance 6. Shareholders Outlook 2
Slide 3: Highlights
1. HIGHLIGHTS 3
Slide 4: Performance at a Glance
Performance at a Glance QUARTER HIGHLIGHTS SNAPSHOT – As on 31st DECEMBER 2018 (Rs.’crore) 53% growth in profit from Q2’19 Profit & Loss Highlights Q3’19 Q2’19 Interest Income 7,249 6,929 Interest Expense 4,815 4,749 Q3’19 - Rs.2,076 cr. Q3’19 - Rs.2,076 cr. 9M’19 - Rs.4,804 cr. Net Interest Income
Slide 5: Improving Earning Performance in a Challenging Operating Environment
Improving Earning Performance in a Challenging Operating Environment Yield on Earning Assets Cost of Funds 8.09% 8.08% 7.97% 10.65% 10.60% 10.57% Q1'19 Q2'19 Q3'19 Q1'19 Q2'19 Q3'19 Spread on Earning Assets NIM on Earning Assets 2.68% 3.42% 3.33% 2.50% 2.49% 3.26% Q1'19 Q2'19 Q3'19 Q1'19 Q2'19 Q3'19
Slide 6: Update on PFC-REC Acquisition Deal
2. UPDATE ON PFC - REC ACQUISITION DEAL 6
Slide 7: PFC to acquire Govt. of India stake in REC (1/2)
PFC to acquire Govt. of India stake in REC (1/2) ‘In Principle’ approval given by Cabinet on 6th Dec 2018 for strategic sale of Government of India’s existing 52.63% equity shareholding in REC Ltd. to PFC along with transfer of management control. Key Aspects related to PFC – REC acquisition Deal Ex
Slide 8: PFC to acquire Govt. of India stake in REC (2/2)
PFC to acquire Govt. of India stake in REC (2/2) Key Aspects related to PFC – REC acquisition Deal contd… Approval Status • Status of major approvals is as under: o In Principle approval obtained from PFC’s Board for the deal. o Approval obtained from SEBI w.r.t. related party transaction. o Approva
Slide 9: Earning Updates
3. EARNING UPDATES 9
Slide 10: Earning Updates
Earning Updates Revenue & Growth (Rs.’crore) Q3 FY 19 Q2 FY 19 Q3 FY 18 9M FY 19 9M FY 18 Interest Income 7,249 6,929 6,198 20,773 19,662 Interest Expense 4,815 4,749 4,292 14,188 12,704 Net Interest Income 2,435 2,180 1,905 6,584 6,958 Profit After Tax 2,076 1,355 1,217 4,804 3,565 Cumulative Provi
Slide 11: Earning Updates: Key Ratios
Earning Updates Key Ratios Q3 FY 19 Q2 FY 19 Q3 FY 18 9M FY 19 9M FY 18 Yield on Earning Assets 10.65% 10.60% 11.17% 10.58% 10.94% Cost of Funds 7.97% 8.09% 8.28% 8.04% 8.31% Interest Spread on Earning Assets 2.68% 2.50% 2.89% 2.54% 2.63% Net Interest Margin on Earning Assets 3.42% 3.33% 3.87% 3.32%
Slide 12: Asset Quality
4. ASSET QUALITY 12
Slide 13: Provisioning Snapshot – Total Portfolio
Provisioning Snapshot – Total Portfolio (Rs.’crore) Status as on 31.12.2018 Stage I Stage III (NPA) as & Stage III % of Total Loan Total Stage II Assets Outstanding Loan Assets Government Sector 2,46,465 - Nil 2,46,465 Private Sector 23,427 28,236 9.47% 51,663 Total Outstanding Amount 2,69,892 28,23
Slide 14: Resolution Status – Stage III Assets (1/2)
Resolution Status – Stage III Assets (1/2) Resolution status of Rs.28,236 cr. of loan assets in Stage 3 1 16 projects of Rs.23,607 cr. are in NCLT ▷ Projects where NCLT application filed & admitted ○ 4 projects of Rs.1,895 cr. ○ 60% provisioning available. ▷ Projects where NCLT application filed but
Slide 15: Resolution Status – Stage III Assets (2/2)
Resolution Status – Stage III Assets (2/2) 2 10 projects being resolved outside NCLT ▷ Four projects worth Rs.298 cr. in SARFAESI/DRT ○ 100% provisioning available. ▷ 6 projects worth Rs.3,521 cr. resolution plan under discussion ○ 26% provisioning available. ○ Major highlights on some of these proj
Slide 16: Operational Performance
5. OPERATIONAL PERFORMANCE 16
Slide 17: Loan Assets - Composition
Loan Assets - Composition (Rs.’crore) As on 31.12.2018 As on 31.12.2017 Amt. % Amt. % Gross Loan Assets 2,98,128 100% 2,62,109 100% Scheme Wise Generation 2,14,980 72% 2,02,456 77% Transmission 24,118 8% 18,836 7% Distribution 55,903 19% 37,754 14% Others 3,127 1% 3,064 1% Sector Wise Government Sec
Slide 18: Disbursements - Composition
Disbursements - Composition (Rs.’crore) Q3 FY 19 Q3 FY 18 9M FY 19 9M FY 18 Amt. % Amt. % Amt. % Amt. % Disbursements 14,648 100% 10,893 100% 45,134 100% 37,562 100% (excluding R-APDRP/IPDS) Scheme Wise Generation 7,908 54% 7,770 71% 18,556 41% 22,738 61% Transmission 1,588 11% 906 8% 4,389 10% 3,06
Slide 19: Borrowing Profile
Borrowing Profile Liability Mix of Rs. 2,49,116 cr. O/s borrowings as on 31.12.2018 - Rs.501 cr. 0.27% 0.20% 54 EC Bonds 2% 12% Other Rupee Denominated Bonds - Rs.1,71,792 cr. Subordinated Bonds - Rs.3,800 cr. 15% Rupee Term Loan from Banks/FI's - Rs.37,554 cr. Foreign Currency Borrowings - Rs.28,83
Slide 20: Borrowing Profile: Diversification of funding
Borrowing Profile Diversification of funding profile Domestic vs Foreign Borrowing Mix Rupee Bonds vs. Rupee Term Loan Others Others 6% 3% RTL 6% 12% 0.40% RTL 17% 88% Bonds Bonds 80% 94% 93.5% FY 9M 18 FY 9M 19 FY 9M 18 FY 9M 19 Domestic Borrowings Foreign Borrowings Rupee Bonds Rupee Term Loan Oth
Slide 21: PFC's access to low cost funds
PFC’s access to low cost funds 54EC Resourse Mobilization on an upward trend 54EC Salient Features Eligibile Investors Individuals,HUF,NRI,FIs,LLP, Benefit to Investor Partnership,Banks,Mutual Funds, Insurance Co., PF funds 5 years from deemeed Tenor allotment date Long Term Capital Gain on transfer
Slide 22: Shareholders Outlook
6. SHAREHOLDERS OUTLOOK 22
Slide 23: Shareholders Outlook
Shareholders Outlook Dividend Performance 61.5% GoI Shareholding Consistent Dividend Pay out Track 1 Record Particulars 31.12.2018 31.12.2017 Dividend Payout as a % of Equity President of India 61.48% 65.92% Share Capital FIIs & FPIs 14.18% 14.47% 78% 69% Indian FIs & Banks 7.02% 7.24% Bodies Corpor
Slide 24: Shareholders Outlook: Equity market valuation ratios
Shareholders Outlook Equity market valuation ratios indicate potential for upside Q3 FY 19 Q2 FY 19 Q3 FY 18 9M FY 19 9M FY 18 EPS (in Rs.) 31.45 20.53 18.44 24.26 18.01 Book Value Per Share 155.04 144.97 140.90 155.04 140.90 (in Rs.) Market price per Share 107.05 76.15 121.55 107.05 121.55 (in Rs.)
Slide 25: Thanks! Any questions?
Thanks! Any questions? You can reach PFC’s Investor Relations Team at investorrelations@pfcindia.com. Investor Relations Team : ▷ Mr. B.S.Bisht,General Manager (+91-11- 23456846) ▷ Ms. Jasneet Guram, DGM (+91-11- 23456823) Join us: @pfclindia www.pfcindia.com 25