Power Fin.Corpn. Q2 FY27 Results (NSE: PFC)
Signal: Earnings grew
The read
The quarter's earnings inflection is impairment-led rather than revenue-led: total income grew only 1.5% YoY to ₹14,973.11 crore, while PAT grew 11.8% to ₹4,986.71 crore because impairment changed from a ₹241.99 crore expense to a ₹179.63 crore income; operating margin nevertheless fell 183bps sequentially from 42.24% to 40.41%, so underlying lending momentum remains modest.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹14,973.11 Cr | +1.5% | +7.0% |
| Net profit | ₹4,986.71 Cr | +11.8% | |
| EPS | ₹15.11 | +11.8% | |
| EBIT margin | 0% |
P&L walk
Standalone total income rose 1.5% YoY to ₹14,973.11 crore and PAT rose 11.8% to ₹4,986.71 crore, helped by impairment income of ₹179.63 crore versus a ₹241.99 crore expense last year; operating margin expanded YoY but fell sequentially.
Key positives
- PAT increased 11.8% YoY to ₹4,986.71 crore and EPS increased 11.8% to ₹15.11, with EPS tracking PAT and no dilution signal.
- Gross credit impaired assets ratio was 0.91% and net credit impaired assets ratio was 0.15%; Stage 3 loan principal declined to ₹5,199.17 crore from ₹6,322.58 crore at 31.03.2026.
- H1FY27 operating cash flow was ₹19,501.84 crore versus an outflow of ₹4,614.71 crore in H1FY26.
- CRAR remained strong at 23.89%, while the company raised ₹6,643.50 crore of NCDs with full utilisation and no deviation reported.
Key concerns
- Total income grew only 1.5% YoY to ₹14,973.11 crore and loan outstanding declined 1.3% from 31.03.2026 to ₹5,72,524.24 crore, indicating limited balance-sheet growth.
- Operating margin declined 183bps QoQ to 40.41% after the prior quarter benefited from a larger impairment release.
- Finance costs rose 4.3% YoY to ₹8,535.62 crore, faster than total-income growth.
- Impairment income of ₹179.63 crore versus a ₹241.99 crore expense YoY was the principal earnings support, making the 11.8% PAT growth less reflective of recurring operating growth.
- The proposed merger with REC remains subject to shareholder, creditor, MCA and other statutory approvals.
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