Power Finance Corporation Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript Power Finance Corporation Ltd filed with BSE on 20 May 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
PFC reported its highest ever standalone net profit of INR 20,051 crore for FY26, up 16% year-on-year, driven by 13% net interest income growth and provision reversals of around INR 1,800 crore. The loan book closed at around INR 5.8 lakh crore, reflecting 7% growth, as elevated prepayments driven by a declining interest rate cycle and bank competition offset disbursements. Management also detailed progress on the proposed PFC-REC merger, targeting completion by April 2027 subject to regulatory approvals, and provided FY27 guidance including 10% loan growth and a spread range of 2.40% to 2.50%.
Numbers mentioned
Standalone net profit: INR 20,051 crore (FY2026)
p. 5
“I am happy to share that for Financial Year ‘2026, we reported our highest ever net profit of INR 20,051 crore with a 16% increase yearon-year basis.”
Smt. Parminder Chopra, page 5 of the filed PDF · View the filing
Net interest income growth: 13% (FY2026)
p. 5
“This was driven by a healthy net interest income growth of 13% along with provision reversals of around INR 1,800 crore during the year.”
Smt. Parminder Chopra, page 5 of the filed PDF · View the filing
CRAR: 23.44% (as on 31st March 2026)
p. 5
“As on 31st March 2026, CRAR is at 23.44% with Tier-1 capital at 21.93%.”
Smt. Parminder Chopra, page 5 of the filed PDF · View the filing
Net worth: crossed INR 1 lakh crore (FY2026)
p. 5
“Our net worth also crossed a major milestone of INR 1 lakh crore, with a 13% yearon-year growth.”
Smt. Parminder Chopra, page 5 of the filed PDF · View the filing
Yield: 9.96% (FY2026)
p. 5
“Now, coming on to the key financial indicators. The yield for Financial Year ‘2026 is at INR 9.96%.”
Smt. Parminder Chopra, page 5 of the filed PDF · View the filing
Cost of funds: 7.50% (FY2026)
p. 5
“Cost of funds at 7.50% The spread at 2.46% and NIM at 3.55%.”
Smt. Parminder Chopra, page 5 of the filed PDF · View the filing
Net credit impaired asset ratio: 0.15% (FY2026)
p. 6
“Our net credit impaired asset ratio is at new low at 0.15%. Gross credit impaired asset ratio is at 1.09%.”
Smt. Parminder Chopra, page 6 of the filed PDF · View the filing
Disbursements: INR 1,65,414 crores (FY2026)
p. 7
“During Financial Year ‘26, we disbursed INR 1,65,414 crores.”
Smt. Parminder Chopra, page 7 of the filed PDF · View the filing
Loan book: around INR 5.8 lakh crore (as of FY2026 year-end)
p. 7
“With this, our loan book closed at around INR 5.8 lakh crore, reflecting 7% growth during the year.”
Smt. Parminder Chopra, page 7 of the filed PDF · View the filing
Total outstanding borrowing: INR 4,88,500 crore (as of 31st March 2026)
p. 8
“As of 31st March ‘26, the total outstanding borrowing stood at INR 4,88,500.”
Smt. Parminder Chopra, page 8 of the filed PDF · View the filing
Foreign currency borrowing: USD equivalent to 10.3 billion (as on 31st March 2026)
p. 8
“As on 31st March ‘26, our outstanding foreign currency borrowing is at USD equivalent to 10.3 billion.”
Smt. Parminder Chopra, page 8 of the filed PDF · View the filing
FY26 sanctions: around INR 2.85 lakh crore (FY2026)
p. 10
“The current year sanctions are around INR 2.85 lakh crore.”
Smt. Parminder Chopra, page 10 of the filed PDF · View the filing
FY26 repayments from borrowers: INR 1,28,000 crore (FY2026)
p. 20
“On the repayment fronts, we have, during the financial year, we have INR 1,28,000 crore worth of repayments from our borrowers.”
Smt. Parminder Chopra, page 20 of the filed PDF · View the filing
Final dividend: INR 3.95 per share (FY2026)
p. 5
“The Board has proposed a final dividend of INR 3.95 per share with this total dividend for Financial Year ‘2026 stands at INR 18.55 per share.”
Smt. Parminder Chopra, page 5 of the filed PDF · View the filing
Provision reversal from Sinnar Thermal resolution: nearly INR 670 crores (FY2026)
p. 6
“So, the resolution resulted in provisioning write back of nearly INR 670 crores during the quarter.”
Smt. Parminder Chopra, page 6 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Spread — 2.40% to 2.50% · FY2027
stated conditionally by Smt. Parminder Chopra
p. 6
“Going into Financial Year ‘2027, keeping in view the movements in yield and uncertainty in the forex markets, we expect our spreads to be in the range of 2.40%to 2.50%.”
Smt. Parminder Chopra, page 6 of the filed PDF · View the filing
Loan growth — around 10% · FY2027
stated firmly by Smt. Parminder Chopra
p. 8
“we are targeting a loan growth of around 10% in Financial Year ‘27.”
Smt. Parminder Chopra, page 8 of the filed PDF · View the filing
Merged entity formation (PFC-REC) — merged entity to come into existence · 1st April 2027
stated conditionally by Smt. Parminder Chopra
p. 4
“We are targeting for the merged entity to come into existence by 1st of April 2027.”
Smt. Parminder Chopra, page 4 of the filed PDF · View the filing
RBI rate cuts — no further rate cut expected · FY2027
stated as an aspiration by Smt. Parminder Chopra
p. 7
“For FY27, we do not expect any further rate cut from RBI.”
Smt. Parminder Chopra, page 7 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said disbursements were roughly at par with last year; the change was in the nature of loans, with a shift from short-tenor RBPF loans to medium-term loans reducing rollover-driven disbursement volumes, and acknowledged competition from banks on commissioned assets.
Answered by Smt. Parminder Chopra
Asked by Abhijit Tebrewal: Why did disbursements decline YoY and repayments rise - is it competitive intensity from other players or PSU banks?
p. 10
“The main issue is the nature of disbursements which have been done. Earlier the DISCOMs were more and more were taking the RBPF loan, which has a shorter tenor, 6 months average maturity and they keep on revolving that, so automatically disbursements gets elevated, if you see.”
Smt. Parminder Chopra, page 10 of the filed PDF · View the filing
Management explained that infrastructure loan sanctions take time to convert to disbursement due to conditions and construction timelines, and that on employees, both PFC and REC have lean manpower and will look to strengthen focus areas like compliance and monitoring rather than immediately merge roles.
Answered by Smt. Parminder Chopra
Asked by Shreya: Given a large undisbursed sanction pool, why is loan growth guidance only 10%, and what is the plan for overlapping employee roles post-merger?
p. 10
“For any infrastructure financing,s I think sanctions to convert into disbursement always takes time.”
Smt. Parminder Chopra, page 10 of the filed PDF · View the filing
Management said the government has committed to maintaining government company status for the merged entity even though its stake would fall below 50%, with modalities still being worked out, and that borrowing limit reduction from 25% to 20% is not expected to be a major challenge given increasing bank capital.
Answered by Smt. Parminder Chopra
Asked by Piran Engineer: How will the merged entity maintain government company status given the share swap would reduce government stake below 50%, and will borrowing limits be a constraint?
p. 13
“the Government has committed that they are going to maintain the status of the merged entity as the government Company.”
Smt. Parminder Chopra, page 13 of the filed PDF · View the filing
Management said 97% of the portfolio is hedged and losses booked are largely notional except for liabilities maturing within the year, with actual gain or loss known only at maturity, and regular monitoring continues.
Answered by Smt. Parminder Chopra
Asked by Chintan Shah: Given the sharp rise in the cost of hedging reserve, could FY27 see similarly sizable hedging costs, and how much sanctions-to-disbursement lag exists?
p. 15
“We have hedged 97% of our portfolio. But yes, because the risk has been covered in the specified range.”
Smt. Parminder Chopra, page 15 of the filed PDF · View the filing
Management said nuclear financing proposals are yet to come as groundwork continues, PFC already funds solar/wind manufacturing, battery storage and EVs, and that geopolitical risk mainly affects borrowing costs via exchange rate volatility rather than domestic project funding.
Answered by Smt. Parminder Chopra
Asked by Namit Arora: Is PFC expanding its target market into nuclear and the solar value chain, and has it assessed geopolitical stress on its loan portfolio?
p. 16
“On the geopolitical situation, again it comes to the same thing. I would say, shouldn’t say but it's positive for the power sector.”
Smt. Parminder Chopra, page 16 of the filed PDF · View the filing
Management attributed loss reduction to improved subsidy receipt timing, prepaid meters for government departments, and solarization schemes like KUSUM, describing these as collective reasons for improvement rather than giving a specific future target.
Answered by Smt. Parminder Chopra
Asked by Ramesh Bhojwani: Can AT&C losses be halved further from the current 15.04% level?
p. 18
“So, all these are the collective reasons and improvement in the infrastructure under RDSS scheme. So, these are the collective reasons for improvement in the AT&C process.”
Smt. Parminder Chopra, page 18 of the filed PDF · View the filing
Management said 65% of borrowings are fixed rate with an average liability period of 5-6 years, so rate changes affect the balance sheet gradually rather than immediately, with only marginal fresh borrowing reflecting current rates.
Answered by Smt. Parminder Chopra
Asked by Ashok Shah: How would PFC be affected if RBI raises interest rates by 100 basis points next year given restructured lower-rate loans?
p. 18
“For PFC, 65% borrowing is at fixed rate and that too at a longer tenor.”
Smt. Parminder Chopra, page 18 of the filed PDF · View the filing
Management said standard asset provisioning follows an ECL policy at around 0.4% (1% for under-construction), and that FY26 benefited from one-time resolution-related provision reversals that won't recur, while disbursement figures are hard to predict due to loan structure.
Answered by Smt. Parminder Chopra
Asked by Shreepal Desai: How will credit costs move now that most NPAs are resolved, and what is the FY27 disbursement target?
p. 21
“Standard account provisioning, we have an ECL policy where we say on an average, we provide for 0.4%.”
Smt. Parminder Chopra, page 21 of the filed PDF · View the filing
Management estimated the sanctioned-but-undisbursed figure broadly at 2.5 to 3 lakh crore and said RBI's IRAC-based ECL norms are broadly in sync with PFC's existing project-wise ECL calculation policy under IndAS.
Answered by Smt. Parminder Chopra
Asked by Sagar: What is the total unsanctioned-but-undisbursed book, and what will be the impact of new ECL norms from next April?
p. 22
“But broadly if I say it may be around 2.5 to 3 lakh crores will be the figure. But I am still not sure, I am broadly saying.”
Smt. Parminder Chopra, page 22 of the filed PDF · View the filing
Management said there has been no major policy change on PPAs beyond states aligning to hybrid and storage requirements, and confirmed PFC does have some exposure to merchant power projects without PPAs depending on promoter strength.
Answered by Smt. Parminder Chopra
Asked: Is there regulatory movement toward more flexible PPAs, and does PFC still require PPAs before disbursing loans?
p. 23
“We have exposure on some merchant powers also depending on the strength of the promoter.”
Smt. Parminder Chopra, page 23 of the filed PDF · View the filing
Risks flagged
Prepayment pressure from declining interest rate cycle and bank competition on commissioned assets
p. 7
“For a NBFC like PFC, in a low interest rate cycle, generally there is a prepayment pressure, which is a well accepted and known risk.”
Smt. Parminder Chopra, page 7 of the filed PDF · View the filing
Rupee depreciation and forex market volatility increasing funding costs and translation losses
p. 9
“FY26 was one of the most volatile years for global currency markets in the recent year. Trade tariffs, delay in India-US trade deal, emergence of Middle East war, all these have led to sharp depreciation in Rupee as against USD and EUR during the financial year, which resulted in higher translation losses.”
Smt. Parminder Chopra, page 9 of the filed PDF · View the filing
Ongoing Middle East crisis as a factor affecting currency markets
p. 9
“Currently, the critical event to monitor is the Middle East crisis.”
Smt. Parminder Chopra, page 9 of the filed PDF · View the filing
Competitive refinancing of renewable assets by banks due to low gestation and certain cash flows
p. 15
“Reason being the gestation is low, it turns out commissioning happens early, cash flows are certain and specifically these are the low-ticket size loans. So, you will see most of the refinancing happening in the renewable space.”
Smt. Parminder Chopra, page 15 of the filed PDF · View the filing
Regulatory and shareholder approval risk for the PFC-REC merger
p. 4
“And this shall be subject to regulatory approvals from MCA, RBI, SEBI, cabinet approval, presidential approval, which is required in terms of our Articles of Association.”
Smt. Parminder Chopra, page 4 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.