Power Finance Corporation Q2 FY27 Results Analysis: PAT Jumps 12%, NII Slips 3% (PFC)
Power Finance Corporation Ltd's Q2 FY27 numbers came in soft, with revenue of Rs. 14,793.20 Cr (+0.26% YoY) and PAT growth of +11.76% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | November 04, 2026 |
|---|---|
| Revenue (Q2) | Rs. 14,793.20 Cr (+0.26% YoY) |
| PAT (Q2) | Rs. 4,986.71 Cr (+11.76% YoY) |
| EPS (Q2) | Rs. 15.11 (+11.76% YoY) |
Quarter Snapshot
Standalone PAT grew 11.76% YoY to Rs.4,986.71 Cr, but the growth was carried by a Rs.421.62 Cr impairment reversal and FX tailwinds rather than core spread income, with NII down 3.17% YoY standalone and 4.41% consolidated. Asset quality and capital are at multi-year bests (GNPA 0.91%, CRAR 23.89%) and the consolidated book re-accelerated +2.50% QoQ, but standalone loan principal shrank YTD against management's ~10% FY27 growth guidance. The REC-PFC merger remains the key catalyst, with RBI and exchange NOCs received and a 1-Apr-2027 target intact.
Q2 FY27 Expectations vs Results
| Driver | What happened | Verdict |
|---|---|---|
| "Revenue / loan growth — likely behind the guided path" | Standalone principal −0.22% YTD; consolidated +2.18% | Played out |
| "Margins / spread — compressing bias" | NII −3.17% / −4.41% YoY | Played out |
| "Credit cost — normalization quarter" | Consol Q2 charge Rs.172.38 Cr after Q1 reversal Rs.1,522.59 Cr | Played out |
| "watch whether gross credit-impaired stabilizes after 1.09% → 1.11%" | Improved to 0.91% standalone / 0.55% consolidated — better than the fear | Played out |
| Euro a "far milder transaction headwind" | H1 standalone FX loss Rs.112.18 vs Rs.1,151.82 | Played out |
| Repo hiked 25 bps to 5.50% on Oct 7, 2026 (per pre-call note, web-sourced) | Outside the filing window (quarter ended 30.09.2026) | Not observable |
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Management Guidance vs Delivery
| What management said | What happened | Verdict |
|---|---|---|
| Standalone loan growth ~10% FY27 (Q4 FY26 earnings call, May 13, 2026) | principal −0.22% YTD; consolidated +2.18% YTD — see §9 | Stretch |
| Merged entity by 1-Apr-2027 (management guidance; filing note 6) | RBI + exchange NOCs in hand; NCLT filing pending | On Track |
| Dividend ~30% of PAT (management commentary, prior calls) | Q2 interim = 27.13% of standalone Q2 PAT | On Track |
| FY26 loan growth 10–11% (closed) | 7% delivered (prior disclosure) | Missed |
| "We are expecting that we will be able to maintain our spreads and margins" (Q2 FY26 call) | NII −3.17% YoY standalone / −4.41% consolidated on a growing book — directionally | Contradicted |
| Gradual reversal of H1 FY26 forex losses expected (Q2 FY26 call) | Standalone H1 FX loss Rs.112.18 Cr vs Rs.1,151.82 Cr | Confirmed |
| The ~Rs.800 Cr NPA-resolution write-back benefit won't repeat; provisioning normalizes (Q4 FY26 call) | Consolidated Q2 swung to a Rs.172.38 Cr charge after Q1's Rs.1,522.59 Cr reversal | Confirmed |
| Merger on track for 1-Apr-2027 (repeated guidance) | RBI/exchange NOCs received during the quarter; NCLT filing pending — in progress | Confirmed |
Key Investment Insights
Key Positives
- Standalone PAT grew 11.76% YoY to Rs.4,986.71 Cr; EPS rose to Rs.15.11 from Rs.13.52
- Standalone gross impaired assets improved to 0.91% (from 1.09% in Mar-2026); consolidated to 0.55% (from 0.66%)
- CRAR improved to 23.89% from 23.35% in June; D/E declined to 4.25x from 4.34x
- Consolidated loan book resumed growth, +2.50% QoQ to Rs.11,89,151.80 Cr after shrinking in Q1
- Standalone H1 FX transaction loss fell to Rs.112.18 Cr from Rs.1,151.82 Cr in H1 FY26, confirming management's reversal guidance
- REC-PFC merger secured RBI NOC (Oct 15, 2026) and BSE/NSE NOCs (Oct 19, 2026), on track for 1-Apr-2027
- Second interim dividend of Rs.4.10/share (41%) declared, up from Rs.3.90 first interim
Risk Factors
- Standalone NII fell 3.17% YoY and consolidated NII fell 4.41% YoY despite book growth, indicating spread compression
- Consolidated finance costs rose 4.30% YoY, ~3.8x faster than revenue growth of 0.53%
- Consolidated PAT declined 1.95% YoY and PPOP fell 6.48% YoY; standalone PAT growth was driven by a Rs.421.62 Cr impairment swing and Rs.309.85 Cr FX tailwind
- Standalone loan principal shrank 0.22% YTD vs management's ~10% FY27 growth guidance; H2 needs 3.58x the H1 pace to reach 10%
- Consolidated fees & commission income fell 51.75% YoY to Rs.315.55 Cr
- Stage-3 coverage declined to 83.18% standalone (from 86.17%) and 76.46% consolidated (from 79.88%)
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.