Power Finance Corporation (PFC) Ltd., India’s leading state-owned infrastructure lender, reported a 9% year-on-year increase in consolidated net profit to Rs 7,834 crore for the second quarter (Q2) of FY2024-25, driven by higher loan disbursements and improved asset quality. The company’s revenue from operations surged to Rs 24,643 crore, while gross non-performing assets (NPAs) fell sharply, reflecting strong financial discipline and robust sectoral demand. PFC’s steady performance underscores the resilience of India’s power financing ecosystem amid growing investments in renewable energy and grid modernization projects.
Strong Financial Performance Amid Sectoral Momentum
Power Finance Corporation (PFC) continued its growth trajectory in the September quarter, posting a 9% rise in consolidated net profit at Rs 7,834 crore compared to Rs 7,270 crore in the same quarter last year. The company attributed the growth to sustained lending activity and better recoveries from stressed assets, bolstered by ongoing reforms in the power sector.
Revenue from operations stood at Rs 24,643 crore, marking a notable increase from Rs 21,849 crore recorded a year ago. The rise was primarily driven by higher interest income and strong loan growth across both conventional and renewable energy projects.
The state-run non-banking financial company (NBFC), which plays a critical role in funding India’s power infrastructure, also maintained a stable net interest margin (NIM), supported by disciplined borrowing and efficient fund management.
Loan Book Growth and Asset Quality Improvement
PFC’s consolidated loan book expanded steadily, reflecting its growing influence as a preferred financier for both public and private sector energy projects. The corporation’s focus on renewable and transmission infrastructure has helped diversify its portfolio and reduce concentration risk.
Importantly, asset quality continued to improve, with the gross non-performing asset (NPA) ratio declining to 3.41% from 4.64% a year earlier. The net NPA ratio also fell to 0.89%, underscoring PFC’s proactive approach to risk management and resolution of legacy stressed accounts.
“The improvement in asset quality is a testament to our consistent recovery efforts and robust project evaluation frameworks,” the company said in a statement.
Strategic Focus on Renewable Energy and Sustainability
In line with India’s clean energy transition goals, PFC has been increasingly channeling funds into renewable energy, green transmission corridors, and energy efficiency projects. The company has committed significant financing to solar, wind, and hybrid energy ventures, supporting the government’s target of achieving 500 GW of non-fossil fuel capacity by 2030.
PFC’s leadership also highlighted the company’s role in facilitating sustainable financing and ESG (Environmental, Social, and Governance) compliance. “We are not only powering the grid but also driving the green transition. Our financing strategy aligns with the national vision of sustainable growth,” said Chairman and Managing Director Parminder Chopra.
Balance Sheet Strength and Dividend Declaration
PFC’s balance sheet remains robust, with total assets surpassing Rs 9.6 lakh crore as of September 30, 2025. The company’s capital adequacy ratio stood well above the regulatory requirement, indicating strong financial health and capacity to support future expansion.
The board of directors declared an interim dividend of Rs 2.75 per share for FY2024-25, reflecting confidence in the company’s earnings visibility and consistent cash flow generation.
PFC’s prudent borrowing strategy—balancing domestic and international funding sources—has also helped optimize its cost of capital. The company continues to enjoy a strong credit profile, supported by sovereign backing and steady cash inflows from the power sector.
Outlook: Steady Growth Ahead for Power Financing
With India’s electricity demand projected to rise at an annual rate of 5-6% over the next decade, PFC is well-positioned to capitalize on emerging opportunities in power generation, transmission, and renewable energy financing. The company’s strategic alignment with the government’s infrastructure and energy security goals ensures sustained relevance in the evolving market landscape.
Analysts note that PFC’s consistent profitability, declining NPAs, and increasing green portfolio will likely enhance its long-term valuation. The ongoing expansion of the renewable energy ecosystem—coupled with government-backed reforms in discoms and power distribution—provides a favorable operating environment for power financiers.
“As India moves toward a low-carbon economy, PFC’s diversified financing approach will be key in bridging the investment gap across the power value chain,” said an energy sector analyst.
Conclusion:
Power Finance Corporation’s Q2 performance underscores its pivotal role in India’s power financing architecture. With improved profitability, sound asset quality, and a growing focus on sustainability, the company continues to strengthen its position as a vital enabler of the nation’s energy transition and infrastructure growth.
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