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All-Time High Loan Sanction

All-Time High Loan Sanction

All-Time High Loan Sanction:

POWER FINANCE CORPN:

Sanctioned Loan Book of PFC stands at whopping 1.72 LAC CRORES. If same is compared against Loan DISBURSAL in FY16, PFC has strong *pipeline for next 45 months ( almost 4 years)*

How many other NBFCs have such huge Loan Sanction book and pipeline for 45 months? Perhaps none.
Still PFC trading @ 4.40xFY17Eeps.

We are confident that PFC can be *200+ Ex-Bonus in 2017*

Impact of UDAY on PFC: Irrational ill-informed panic created by analysts:

PFC has loan book/asset of 2.37 lac crores as on 31/03/3016. Out of this massive loan book, *only 24600 cr worth loans of PFC* fall under UDAY. It means only *12%* of total loan portfolio is affected. And so far only 4500 cr under UDAY is prepaid( Pfc remains unaffected as such funds are deployed earning upto 11%).
Further mgtmnt has stated:

*Discoms Turnaround under UDAY will have positive impact on overall power sector improving ASSET QUALITY of PFC loans. 72% of Pfc loans are to Generation sector. With Discom financial health improving, stress on loans given to Generation sector will reduce considerably*

Clear case of misrepresentation by analysts, without reading practical biz scenario.
PFC will continue to do well as also evident from Q1 results which were substantially higher than ALL mkt est

A strong Buy

PricexBookValue criterion:

POWER FINANCE CORP:

In Financial services, PricexBookValue is an important parameter. Let us have a look(31.03.16) on NBFCs:

BV. CMPxBV

SKS. 108 7.00

Canfin 330 4.35

LICHF 189 2.90

IBullHF 157 5.15

DHFL 180 1.50

*PFC* 273 *0.87*

*Loan assets of PFC stood at MASSIVE 2.37 LAC crores*.

Yes, private sector NBFCs growing at faster pace due to *much smaller base* but PFC Loan Assets also *grew 9% in FY16*

Even if PFC deserves PricexBook of 1, stock price should be Rs 273

PFC becomes ex-Bonus on 26th. Stock should climb to Rs 254 by 25th August

Dividend Yield:PFC vs others:

Name. Paid Rs Yield

SKS. Nil. Nil

Canfin. 10. 0.70%

DHFL. 2. 0.76%

IBullHF. 9. 1.10%

LICHF. 5.50. 1%

*PFC*. 13.90. *6%*

PFC miles ahead of ALL other NBFCs in terms of Dividend Yield and *payout ratio*

As per our source, Div for *FY17 on increased equity ( after bonus) can be Rs 10*

96% with Govt and institutions. Only 4% public holding.

Stock should be 254 August expiry

For investors, stock can be 200 ex-bonus by 2017end

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