Power Finance Corp stock delivered gains in 13 out of last 15 months; climbed over 400%

Shares of Power Finance Corporation, the country’s leading non-bank financial corporation, delivered whopping returns to their investors. The stock initiated its impressive rally in October of the previous year and notably achieved positive growth in 13 months out of the subsequent 15, including the ongoing month of December.

During this period, the stock appreciated from ₹83.70 apiece to ₹423 apiece, resulting in a gain of 405%. Looking at the yearly performance, this year the stock skyrocketed 275%. This impressive surge is attributed to a robust increase in power demand amid a surge in economic activities, benefiting power sector financing companies.

As the fifth-largest economy globally and the fastest-growing among major economies, India’s developmental strides are closely tied to energy consumption trends, making it a pivotal factor in gauging the nation’s progress.

Meanwhile, in the previous trading session, PFC jumped 8.24% as electricity output rose 20.4% YoY in October, reaching a 17-month high. In today’s session, the stock further jumped 1.68% to touch a new record high of ₹428.75 apiece.

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Power Finance Corporation is a Maharatna CPSE and the country’s leading non-bank financial corporation. It is engaged in power sector financing and the integrated development of the power and associated sectors. PFC clients include state power utilities, central power sector utilities, power departments, and private power sector utilities.

On December 06, the company said that its arm, PFC Consulting, has incorporated Gola B-Ramgarh Transmission Ltd as a wholly-owned subsidiary for implementing a transmission project in Jharkhand.

Gola B-Ramgarh Transmission, a special purpose vehicle, will be used for developing the intra-state transmission system consisting of 400/220/132/33 KV SS at Gola-B along with associated transmission lines and 220/33 KV SS at Ramgarh along with associated transmission line under Package-B (Jharkhand) for DVC, as per the company’s regulatory filing.

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In terms of financials, PFC posted its highest-ever quarterly consolidated net profit of ₹6,628 crore in Q2FY24. The company reported a net profit of ₹5,229 crore in the corresponding quarter of last year.

The revenue from operations during the quarter rose to ₹22,391 crore from ₹19,336 crore in the same period a year ago. For H1FY24, the company delivered a profit after tax of ₹12,610 crore as against ₹9,809 crore in the year-ago period.

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For FY 2022–23, the company delivered record net profit of ₹11,605 crore, up 16% from the previous fiscal. This is the third consecutive financial year in which the company has set a new record for the highest annual profit.

Powering the future

Going forward, the government’s “Make in India” initiative and the production-linked incentive scheme are expected to boost power demand. Projections indicate a 7.18% compound annual growth rate (CAGR) in India’s electricity consumption until 2027.

To address this growing demand, the government plans to double the installed capacity with the addition of around 500 GW of capacity by 2032, with 87% from non-fossil fuel sources and 13% from fossil fuels, requiring an estimated investment of approximately ₹31 lakh crore.

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