PFC - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

🔌 Fundamental Stock Analysis: Power Finance Corporation Ltd (PFC) Rating: 4.0

📊 Core Financials & Quality Indicators

ROE: 21.0% and ROCE: 9.73% — solid profitability; ROE is impressive given the capital intensity of the business.

EPS: ₹69.7 — high earnings per share supports valuation strength.

Debt-to-Equity: 8.25 — extremely leveraged, but typical for a government-backed NBFC focused on infrastructure lending.

Quarterly PAT Growth: From ₹5,829 Cr to ₹6,316 Cr — stable uptick in profit reinforces cash flow sustainability.

Dividend Yield: 3.85% — attractive passive income, a bonus for long-term investors.

💰 Valuation & Market Pulse

Metric Value Interpretation

P/E Ratio 5.89 Deeply undervalued vs. industry PE of 24.6 — market might be discounting risk

P/B Ratio ~1.15 Indicates near-book pricing — fair value zone

PEG Ratio 0.33 Signals undervaluation relative to growth

RSI 44.6 Neutral zone — momentum still developing

MACD –0.71 Mild bearish signal — caution in short term

Price vs DMA ₹411 vs DMA50/200: ₹416 / ₹423 Below both — could invite accumulation interest

Volume Spike: Higher than weekly average — suggests active investor interest.

52-week Index at 25.5% — still trading in lower quartile of annual range.

🧠 Business Model & Strategic Positioning

Sector Focus: Infrastructure financing — primarily in power and energy sectors.

Moat

Backed by Government of India — strong credit profile.

Strategic role in electrification and renewable transition efforts.

Long-term loan book with solid asset visibility.

📌 Investment Strategy

Recommended Entry Zone: ₹390–₹410 — ideally during market dips or post rate clarity. Pricing near 52-week support and below DMA levels improves entry comfort.

Long-Term Outlook

Best suited for income-focused portfolios — solid dividend and low P/E.

Watch debt servicing metrics and NPA trends.

Monitor policy changes and government infrastructure spending cycles.

Want to explore how PFC compares with REC Ltd or other infra-financiers like IREDA or IIFCL? I can build a relative lens to highlight where value or yield might hide in plain sight. Let’s slice it if you’re up for it.

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