Power Finance Corporation Limited (PFC) AI Stock Analysis

• Market Cap: ₹1.36T
• Dividend Yield: 4.62%
• Average Volume (3M): 186.17K
• Price to Earnings (P/E): 5.4
• Beta (1Y): 1.68
• Revenue Growth: 13.05%
• EPS Growth: 16.78%
• Country: IN
• Employees: 545
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 14.43
• Shares Outstanding: 3,300,101,800
• 10 Day Avg. Volume: 259,974
• 30 Day Avg. Volume: 186,168
• PEG Ratio: 0.36
• Price to Book (P/B): 1.13
• Price to Sales (P/S): 1.26
• P/FCF Ratio: -1.43
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 56.21
• Revenue Forecast (FY): ₹245.88B

• Rating: 65 Neutral
• Price Target: ₹444.00 ▲(18.12% Upside)
• Action: Downgraded Date: 11/25/25
• Date: Action: Downgraded 11/25/25

The overall stock score is driven by strong financial performance and attractive valuation, offset by bearish technical indicators. The company's high leverage and negative cash flow are significant risks, while the low P/E ratio and high dividend yield offer potential value.

Positive Factors

Government-backed, sector-focused franchise

Government ownership and an explicit mandate to finance power infrastructure provide durable competitive advantages: preferential access to large public-sector mandates, stronger credibility with counterparties and lenders, and structural policy alignment that sustains loan demand across generation, transmission and distribution projects over multi-year investment cycles.

Sustained revenue and margin improvement

A multi-year rise in revenue and a materially higher net margin indicate durable improvement in earning power driven by scale, improved pricing or better asset mix. Persistent margin expansion supports stronger net income generation and reinvestment capacity, making core lending economics more resilient across credit cycles.

Proven ability to maintain liquidity and fund operations

Although operating cash flows are weak, PFC's demonstrated ability to access financing and preserve liquidity is structurally important for a specialized lender. Ongoing funding access from domestic and international markets enables continued loan origination and support of long-term power projects, a key operational capability.

Negative Factors

Very high leverage

A debt-to-equity ratio above 8x signals material financial leverage that magnifies interest rate and refinancing risks. High indebtedness constrains capital flexibility, increases vulnerability to funding stress or rate shocks, and can limit the company's ability to absorb credit losses without requiring capital support or tighter lending standards.

Negative operating cash flow and declining free cash flow

Persistent negative operating cash flow undermines earnings quality: reported profits are not converting into cash, forcing reliance on external funding to service loans and liabilities. Over months, this elevates refinancing dependency and raises questions about sustainability of dividends, capital expenditure funding, and buffer against stressed assets.

Concentrated exposure to power-sector counterparties

Concentration in one sector, and significant exposure to financially weak distribution utilities, creates structural credit risk. Adverse regulatory outcomes, tariff stress, or prolonged delays in subsidy flows can weaken counterparties' repayment ability and increase non-performing assets, pressuring loan books and capital over time.

Power Finance Corporation Limited Business Overview & Revenue Model

Company Description

Power Finance Corporation Limited, a non-banking finance company, provides financial products and related advisory, and other services to the power sector in India. The company offers fund based financial policies/products, including guidelines for solar and wind power generation projects, as well as for funding private sector independent transmission projects; debt refinancing and prepayment policy for solar wind projects; takeout financing, asset acquisition, bridge and corporate loan, buyer's line of credit, credit facility for purchase of power through power exchange, energy saving project, and project and short-term loan services; financing of fuel supply projects and equipment manufacturers; grants/interest free loans for studies/consultancies; lease financing for the purchase of equipment and wind power projects; line of credit for import of coal; policy for investment in equity of power projects; guidelines for funding grid connected solar thermal private sector power generation projects; policy for underwriting of debt; refinancing of debt of commissioned projects along with additional corporate loans for new-expansion-acquisition of projects; and financial assistance to distribution franchisee. It also provides non-fund based policies/products comprising guarantees, letter of comfort, and policy for guarantee for credit enhancement. In addition, the company offers non-fund based consultancy services. Power Finance Corporation Limited was incorporated in 1986 and is headquartered in New Delhi, India.

How the Company Makes Money

PFC generates revenue through several key streams. The primary source is interest income from loans and advances provided to power sector projects, which are often long-term financing solutions for infrastructure development. Additionally, PFC earns fees and commissions from advisory services and project management. The company also engages in capital market activities, raising funds through the issuance of bonds and debentures, which contribute to its capital base for lending. Significant partnerships with government agencies and state-owned utilities enhance its lending portfolio and mitigate risks, further stabilizing its revenue. Overall, the company's strategic focus on the growing energy sector positions it well for consistent earnings.

Power Finance Corporation Limited Financial Statement Overview

Summary

Power Finance Corporation Limited exhibits strong revenue and net profit growth, with a significant improvement in net profit margin. However, the high leverage and negative operating cash flow present risks that require careful management.

Income Statement

Power Finance Corporation Limited shows a strong income statement with consistent revenue growth. The revenue increased from 198,661.1 million to 404,500.2 million over five years, reflecting a robust growth trend. Gross profit margins are perfect given the nature of revenue. The net profit margin has improved significantly, reaching 56.8% in 2025 from 35.9% in 2020, indicating enhanced profitability. However, reliance on debt might pose risks in the long term.

Balance Sheet

The balance sheet reflects a high leverage position with a debt-to-equity ratio of approximately 8.25 in 2025. While the company has shown an increase in stockholders' equity over the years, the substantial amount of debt relative to equity presents a potential risk. The equity ratio remains relatively low, highlighting the need for cautious management of financial obligations.

Cash Flow

Cash flow analysis reveals challenges, as the operating cash flow has been negative in recent years, and free cash flow has declined. Despite negative operating cash flows, the company has managed financing effectively, maintaining liquidity. The operating cash flow to net income ratio is concerning, indicating potential issues in cash generation from operations relative to net income.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	1.09T	1.06T	915.34B	745.34B	749.46B	714.78B
Gross Profit	422.44B	416.78B	335.66B	275.17B	302.37B	267.94B
EBITDA	409.95B	386.88B	336.42B	265.48B	234.17B	199.16B
Net Income	243.14B	229.91B	197.61B	158.89B	140.15B	117.48B
Balance Sheet
Total Assets	0.00	11.78T	10.39T	8.96T	7.91T	7.76T
Cash, Cash Equivalents and Short-Term Investments	0.00	95.85B	33.89B	1.28B	9.14B	49.28B
Total Debt	0.00	9.72T	8.62T	7.51T	6.60T	6.89T
Total Liabilities	-1.55T	10.23T	9.05T	7.84T	6.95T	6.94T
Stockholders Equity	1.55T	1.18T	1.01T	841.58B	716.76B	607.67B
Cash Flow
Free Cash Flow	0.00	-931.10B	-981.44B	-748.40B	46.03B	-592.35B
Operating Cash Flow	0.00	-922.69B	-978.20B	-747.17B	49.04B	-591.43B
Investing Cash Flow	0.00	-23.12B	-34.09B	-16.94B	-5.47B	17.41B
Financing Cash Flow	0.00	942.58B	1.01T	755.37B	-83.71B	604.24B

Power Finance Corporation Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 375.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:PFC, the sentiment is Positive. The current price of 375.9 is below the 20-day moving average (MA) of 409.16, below the 50-day MA of 379.48, and below the 200-day MA of 386.98, indicating a bullish trend. The MACD of 10.94 indicates Positive momentum. The RSI at 58.17 is Neutral, neither overbought nor oversold. The STOCH value of 69.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:PFC.

Power Finance Corporation Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PNB	75 Outperform	₹1.49T	8.35	―	2.40%	12.10%	12.93%
RECLTD	75 Outperform	₹921.89B	5.36	―	5.56%	18.51%	16.04%
SHRIRAMFIN	70 Outperform	₹2.03T	22.20	―	1.08%	21.24%	22.61%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
PFC	65 Neutral	₹1.36T	5.40	―	4.62%	13.05%	16.78%
IRFC	53 Neutral	₹1.35T	19.31	―	1.52%	-0.41%	4.98%

Power Finance Corporation Limited Corporate Events

Power Finance Corporation Updates on Board Meeting and Tax Compliance Process

Power Finance Corporation Limited has informed that its Board of Directors met on 5 February 2026 at 11:30 a.m. to consider and approve the company’s financial results along with other agenda items, and subsequently adjourned the meeting at 1:30 p.m. to reconvene on 6 February 2026. The company also outlined procedural details for shareholders regarding submission of PAN and relevant tax forms for claiming lower or nil tax deduction on dividends for the financial year 2025-26 by a specified deadline, signaling routine compliance steps that can affect investors’ post-tax returns and ensure orderly processing of dividend-related tax matters.

Power Finance Corporation Sets February 20, 2026 Record Date for Dividend and Tax Compliance

Power Finance Corporation Limited has set 20 February 2026 as the record date for determining shareholders eligible to receive its declared dividend, aligning the process with applicable provisions of the Income Tax Act, 1961. The company has asked eligible investors seeking lower or nil tax deduction on dividend income to submit their PAN and relevant tax forms, such as Form 15G/15H and other supporting documents, through the designated online link on or before 20 February 2026, and noted that no requests on tax determination or reduced withholding will be considered after that date; the company also disclosed that its board meeting to approve financial results commenced on 5 February 2026 and was adjourned to continue on 6 February 2026, signaling ongoing formal consideration of its financial performance and shareholder payout decisions.

Power Finance Corporation Launches Up to ₹5,000 Crore Secured NCD Public Issue

Power Finance Corporation Limited has approved a public issue of secured, rated, listed, redeemable non-convertible debentures (NCDs) with a base issue size of ₹500 crore and a green-shoe option to retain oversubscription up to ₹4,500 crore, taking the potential Tranche I size to ₹5,000 crore within an overall shelf limit of ₹10,000 crore. The issuance, to be listed on the National Stock Exchange, is scheduled to open on January 16, 2026 and close on January 30, 2026, and will be backed by a first pari-passu charge on book debts/receivables to maintain at least 100% security cover, offering investors a secured fixed-income product while providing the company with sizeable funding flexibility to support its lending operations and growth in the power sector.