Power Finance Corporation (PFC) reported a resilient FY26, marked by record standalone net profits of INR 20,051 crore, a 16% year-on-year increase. Consolidated PAT reached INR 33,625 crore, with asset quality remaining strong at 0.13% net NPA. The company is actively progressing toward its planned merger with REC by April 1, 2027, aiming to create a unified powerhouse for India’s power sector financing as it eyes a 10% loan growth for FY27.
Financial Highlights
The company delivered a robust performance in FY26, which management described as a “Year Where Resilience Met Results.” Standalone net profit reached an all-time high of INR 20,051 crore, supported by 13% net interest income growth and INR 1,800 crore in provision reversals. On a consolidated basis, PFC maintains the largest NBFC loan book in India at INR 11.64 lakh crore, with a leading renewable energy portfolio of INR 1.65 lakh crore.
Strategic Merger with REC
A primary focus for the company is the upcoming merger with REC, aimed at creating a single-window financing institution for India’s power sector. Boards of both entities have provided in-principle approval, with advisors and valuers already appointed. The company is targeting the formal commencement of the merged entity by April 1, 2027. This integration is expected to unlock greater scale, capital efficiency, and accelerated decision-making capabilities.
Asset Quality and Growth Outlook
Asset quality showed significant improvement, with net NPAs at 0.15% and 80% of the NPA book resolved from its peak. Provisioning coverage on Stage-3 assets remains healthy at 86%. Looking ahead to FY27, management has set a 10% loan growth target. The company plans to leverage opportunities in short-to-medium-term distribution financing, thermal and nuclear capacity expansions, and emerging green technologies, including battery and pump storage solutions.
Dividend and Capital Position
Reflecting strong financial health, the Board has proposed a final dividend of INR 3.95 per share, bringing the total dividend for FY26 to INR 18.55 per share. The company remains well-capitalized with a CRAR of 23.44% and a Tier-1 capital ratio of 21.93% as of March 31, 2026, providing comfortable headroom for future business expansion.
Source: BSE
