⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
PFC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | PFC | Market Cap | 1,25,899 Cr. | Current Price | 382 ₹ | High / Low | 444 ₹ |
| Stock P/E | 6.91 | Book Value | 296 ₹ | Dividend Yield | 4.14 % | ROCE | 9.74 % |
| ROE | 20.4 % | Face Value | 10.0 ₹ | DMA 50 | 368 ₹ | DMA 200 | 390 ₹ |
| Chg in FII Hold | -0.51 % | Chg in DII Hold | -0.56 % | PAT Qtr | 4,462 Cr. | PAT Prev Qtr | 4,502 Cr. |
| RSI | 59.1 | MACD | 4.86 | Volume | 2,46,57,144 | Avg Vol 1Wk | 1,48,40,125 |
| Low price | 330 ₹ | High price | 444 ₹ | PEG Ratio | 0.34 | Debt to equity | 4.97 |
| 52w Index | 45.2 % | Qtr Profit Var | 2.09 % | EPS | 55.2 ₹ | Industry PE | 19.1 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT of ₹4,462 Cr, stable compared to previous ₹4,502 Cr. EPS at ₹55.2 shows strong earnings capacity.
- Margins: ROE at 20.4% is healthy, while ROCE at 9.74% indicates moderate efficiency.
- Debt Ratios: Debt-to-equity at 4.97 is very high, reflecting heavy leverage typical of financing companies.
- Cash Flows: Strong operating cash flows supported by consistent profits, though debt servicing remains a key risk.
💹 Valuation Indicators
- P/E Ratio: 6.91, significantly below industry average of 19.1, suggesting undervaluation.
- P/B Ratio: Current price ₹382 vs. book value ₹296 → ~1.29x, fairly reasonable.
- PEG Ratio: 0.34, very attractive, showing strong growth potential relative to valuation.
- Intrinsic Value: Appears undervalued compared to fundamentals, offering margin of safety.
🏢 Business Model & Competitive Advantage
- Power Finance Corporation (PFC) is a leading NBFC specializing in financing power sector projects.
- Competitive advantage lies in government backing, strong sectoral presence, and consistent profitability.
- Business model is stable but highly dependent on power sector growth and regulatory environment.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹350 – ₹370, near DMA50 and support levels.
- Long-Term Holding: Suitable for long-term investors seeking stable dividends and undervalued entry, though high leverage risk must be monitored.
✅ Positive
- Low P/E ratio compared to industry, indicating undervaluation.
- Strong ROE at 20.4% reflects good shareholder returns.
- High dividend yield of 4.14% provides steady income.
⚠️ Limitation
- High debt-to-equity ratio (4.97) increases financial risk.
- ROCE relatively modest at 9.74%, showing limited efficiency.
- Dependence on power sector makes earnings vulnerable to policy changes.
📉 Company Negative News
- Minor decline in quarterly PAT (₹4,502 Cr → ₹4,462 Cr).
- FII holding decreased (-0.51%) and DII holding decreased (-0.56%), showing reduced institutional confidence.
📈 Company Positive News
- Stable profitability with EPS at ₹55.2.
- PEG ratio of 0.34 highlights strong growth potential.
- 52-week performance shows 45.2% index gain.
🏭 Industry
- NBFC sector trades at industry PE of 19.1, much higher than PFC’s 6.91, highlighting undervaluation.
- Sector growth supported by infrastructure and power demand, though regulatory risks remain.
🔎 Conclusion
- PFC offers strong earnings, high dividend yield, and undervaluation compared to peers.
- High leverage is a structural risk but manageable given government backing.
- Best suited for long-term investors seeking value and income, with entry around ₹350 – ₹370 offering a good margin of safety.
Would you like me to create a side-by-side HTML comparison of PFC with REC Ltd (its closest peer in power financing) to highlight relative strengths and risks?