Power Finance Corporation Reports Strong 9% Profit Growth in Q2 FY26, Declares Interim Dividend

Power Finance Corporation (PFC) posted a consolidated net profit of ₹7,834.39 crore for the second quarter of FY26, an increase of nearly 9% compared to ₹7,214.90 crore in the same period last year. Total income grew to ₹28,901.22 crore from ₹25,754.73 crore. For the first half of FY26 (H1 FY26), consolidated profit after tax (PAT) grew by 17% to ₹16,816 crore.

PFC announced an interim dividend of ₹3.65 per share. Combined with a previous interim dividend, the total payout for FY2025-26 stands at ₹7.35 per share. The record date for the second interim dividend is November 26.

The company demonstrated improved asset quality. Consolidated Net NPA declined to 0.30% in H1 FY26 from 0.80% in H1 FY25. Gross NPA also significantly reduced by 117 basis points to 1.45% from 2.62%. On a standalone basis, the net NPA ratio for H1 FY26 was 0.37%, the lowest in 10 years, with Gross NPA at 1.87%.

The consolidated loan asset book grew by approximately 10% to ₹11,43,369 crore as of September 30, 2025. The renewable loan book saw a substantial 32% growth. Standalone loan asset book increased by 14% to ₹5,61,209 crore.

Net worth increased by 15% on a consolidated basis and 13.5% on a standalone basis. PFC maintained comfortable capital adequacy ratios, with CRAR at 21.62% and Tier 1 capital at 19.89%, well above regulatory requirements.

Impact: This news is highly positive for Power Finance Corporation and its investors. The profit growth, dividend announcement, and significant improvement in asset quality are strong indicators of financial health and operational efficiency. The robust loan book expansion, especially in renewables, signals future growth potential. Investors can expect potential stock price appreciation and a steady income from dividends. The strong financial performance of a major Public Sector Undertaking (PSU) like PFC can also have a positive ripple effect on the broader financial sector and market sentiment. Impact Rating: 8/10

Difficult Terms: Consolidated Net Profit: The total profit of a parent company and its subsidiaries, after deducting all expenses and taxes, combined as if they were a single entity. Year-on-Year (YoY): A comparison of financial performance metrics from one period to the same period in the previous year. Q2 FY26: The second quarter of the financial year 2025-2026, typically spanning from July to September 2025. Interim Dividend: A dividend paid out to shareholders before the end of the financial year, usually when a company has strong interim profits. Record Date: The specific date set by a company to determine which shareholders are eligible to receive a dividend or other corporate benefits. Profit After Tax (PAT): The profit remaining after all expenses, interest, and taxes have been deducted from the total revenue. Half-Yearly (H1 FY26): The first six months of the financial year 2025-2026, typically from April to September 2025. Consolidated Net Worth: The total value of a company's assets minus its liabilities, including those of its subsidiaries, representing the owners' equity. Non-Controlling Interest: The portion of equity ownership in a subsidiary that is not attributable to the parent company. Loan Asset Book: The total value of loans that a financial institution has issued and expects to be repaid. Consolidated Net NPA: The total value of loans that are in default (non-performing) after combining the parent company and its subsidiaries, minus any provisions made for these bad loans. Gross NPA: The total value of loans where the borrower has defaulted on payments, before any provisions or write-offs. Basis Points: A unit of measure equal to one-hundredth of one percent (0.01%). Used here to describe the reduction in NPA percentages. Standalone Basis: Financial performance and position of the company considered as an independent entity, excluding its subsidiaries. Net Interest Income: The difference between the interest income a bank or financial institution generates and the interest it pays out to its lenders and depositors. Renewable Loan Book: The total value of loans issued specifically for projects related to renewable energy sources. Capital Adequacy: A measure of a bank's or financial institution's capital relative to its risk-weighted assets, indicating its ability to absorb unexpected losses. Capital to Risk (Weighted) Assets Ratio (CRAR): A key regulatory ratio that assesses a financial institution's solvency. Tier 1 Capital: The core capital of a financial institution, primarily consisting of common stock and retained earnings, considered the highest quality of capital. Regulatory Requirement: The minimum standards and rules set by financial regulators that institutions must adhere to.