🏢 INTRODUCTION of PFC
It is a government owned NBFC company, a public sector undertaking under the minister of power government of India.
PFC gives loans and financial support to companies in the power sector. These are the companies that generate transmit or distribute electricity across India. PFC is a bank for electricity sector. PFC earns interest on these loans and make profit. It is a Navratan PSU company.
SHARE HOLDING PATTERNS OF PFC share: As of 31 Dec, 2024
| Category | Shareholding (%) | Remarks |
| Promoter (Govt. of India) | 55.99% | Majority stake held by Government of India |
| Foreign Institutional Investors (FIIs) | 18.04% | Increased from 17.74% in previous quarter |
| Domestic Institutional Investors (DIIs) | 17.06% | Includes LIC, mutual funds, and insurance companies |
| – LIC | 1.77% | Largest domestic institutional shareholder |
| – HDFC AMC | 1.24% | Mutual fund house holding a notable stake |
| – Kotak Mahindra AMC | 1.90% | |
| – Nippon India AMC | 1.77% | |
| Retail & Other Public Shareholders | 8.80% | Includes individual and non-institutional investors |
| Total | 100% |
📈 Financial matrix of PFC Share:
| Metric | March 31, 2024 | March 31, 2023 | Remarks |
| Per Share Ratios | |||
| Basic Earnings Per Share (EPS) (₹) | 59.88 | 60.19 | Slight decrease in EPS |
| Diluted EPS (₹) | 59.88 | 60.19 | Consistent with Basic EPS |
| Cash EPS (₹) | 80.35 | 80.42 | Minimal change in cash earnings |
| Book Value per Share (₹) | 406.92 | 424.16 | Decline in book value per share |
| Revenue from Operations per Share (₹) | 276.04 | 293.81 | Decrease in revenue per share |
| Profitability Ratios | |||
| PBDIT Margin (%) | 99.20 | 94.50 | Improved operating profitability |
| PBIT Margin (%) | 99.16 | 94.45 | Consistent with PBDIT margin |
| PBT Margin (%) | 38.29 | 35.73 | Increase in profit before tax margin |
| Liquidity Ratios | |||
| Current Ratio (X) | 4.07 | 20.37 | Significant decrease, indicating reduced short-term liquidity |
| Quick Ratio (X) | 4.07 | 20.37 | Mirrors current ratio trend |
| Asset Turnover Ratio (%) | 8.60 | 9.30 | Slight decline, indicating reduced efficiency in asset utilization |
| Metric | Value | Interpretation / Remarks |
| P/E Ratio | 5.83 | Low P/E indicates undervaluation; investors paying ₹5.83 for ₹1 of earnings |
| Return on Equity (ROE) | 18.54% | Strong profitability and efficient use of equity |
| Earnings Per Share (EPS) | ₹67.57 | High EPS reflects strong earnings per share |
| Price to Book Value (P/B) | 1.22 | Stock trades slightly above book value — considered fairly valued |
| Dividend Yield | 3.43% | Attractive for income-seeking investors |
| Dividend Payout Ratio | 33.53% | Company retains ~66% of profits for reinvestment |
| Debt-to-Equity Ratio | 8.71 | High — typical for NBFCs; reflects borrowing-based business model |
| Interest Coverage Ratio | Low | Indicates lower ability to cover interest expenses; worth monitoring |
| 5-Year Sales Growth | 11.1% | Moderate growth; not very aggressive |
| Promoter Holding | 55.99% | Stable and high government holding; adds to stock’s credibility |
💡 WHY SHOULD CONSIDER PFC SHARE:-
PFC INCOME is growing year by year and quarter by quarter. PFC PAYS GOOD DIVIDENDS to its share holders. GROWTH IN POWER SECTOR. AS INDIA IS GROWING THE DEMAND OF THE POWER RISES. Government is also emphasises FOR RURAL ELECTRIFICATION as well. MOST OF THE AREAS IN RURAL INDIA ARE STILL NO PROPER POWER SUPPLY as we know 70% of the population living in rural areas, so many more opportunities are there to grow the power company.
AS WE ARE GROWING ECONOMY, MANY FACTORIES AND START-UPS, WE ARE EXPECTING IN FUTURE AND THAT WILL GENERATE GOOD REVENUE FOR OUR ECONOMY AND EACH AND EVERY SECTOR NEEDS POWER.POWER IS ALWAYS IN DEMAND AS WITHOUT POWER, WE CANNOT RUN ANY PLANTS FACTORIES, OR ANY OTHER START-UP. It is the basic need for each and every sector and the demand of power neighbour goes down in future and it will always grow year by year. when we talk about the value of PFC, PRICE TO EARNING RATIO OF PFC is 6% AND THE SECTOR PE is APPROXIMATELY 15%, SO IT IS UNDER VALUED share RETURN ON EQUITY IS 20% which is very good for any company.
⚠ Cons of PFC Share:-
As it is government run organisation, so any political decision can affect the business. AS IT IS NBFC COMPANY FOR POWER SECTOR AND GIVE LOAN TO POWER GENERATED COMPANY. IF LOAN IS NOT PAID BY THESE COMPANIES MAY INCREASE NPA FOR PFC THAT WILL MAKE LOSS TO THIS COMPANY .AS FINANCIAL SECTOR IS REGULATED BY RBI, ANY RATE CUT IN INTEREST CAN AFFECT profit of PFC. There are many players in power finance sector like REC LTD, IREDA,IIFCL ETC. As many players are in the sector show competition is high and interest generation in the sector will be challenging for each and every company. Below, we have attached the table of the competitors of PFC.
| Competitor Name | Type | Focus Area | Relationship with PFC |
| REC Ltd. | PSU | Power/Rural Electrification | Subsidiary of PFC |
| IREDA | PSU | Renewable Energy | Independent |
| IIFCL | PSU | Infrastructure (includes power) | Independent |
| HUDCO | PSU | Housing + Urban Infra (incl. power) | Independent |
| SBI & PSU Banks | PSU Banks | Broad lending (incl. power) | Indirect |
| L&T, Tata Cap, etc. | Private | Selective infra/power lending | Indirect |
SUMMARY of POWER FINANCE CORPORATION PFC
Power Finance Corporation (PFC) is a government-owned NBFC under the Ministry of Power, providing loans to power sector companies. As India’s economy grows, the demand for power increases, creating opportunities for PFC. However, potential investors should consider the risks associated with government-run organisations, loan defaults, and competition in the sector.
📢 Disclaimer
This blog is for educational purposes only and is not a stock recommendation. Always consult your financial advisor and conduct your own research before making any investment decisions
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