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Government company Power Finance Corporation (PFC) closed with a gain of about 8.5% today. After the second quarter results, analysts are bullish on the stock. 10 analysts have given this stock a Buy rating. They estimate that this stock can reach the price of ₹ 680 per share. This stock has slipped by 22% from the peak of ₹ 580 per share till now. There is a gain of about 51% after the new target as compared to Friday's closing price.
In the September quarter, the total disbursement of PFC grew 45% year-on-year to ₹47,633 crore. Disbursement has almost doubled on a quarterly basis. The company's disbursement grew 9.8% year-on-year to ₹4.93 lakh crore.
During the July-September quarter, the company's asset quality has also improved on a quarterly basis. The company's gross NPA was 3.38% in June, which has now come down to 2.71%. During this period, net NPA has also come down from 0.87% to 0.72%. What is the analyst's opinion on the stock? Brokerage firm CLSA has a target price of ₹610 per share with a rating of Outperfom. The brokerage firm said that despite a strong recovery in disbursement, the company's loan growth has slowed down. A large part of the company's repayments were to be made in the first half of the financial year. About 96% of the company's infra loans will be to government companies. For a return on equity (RoE) profile of 18%, CLSA says that the valuation of 1.1 times for the financial year 2026 is cheap. Another brokerage firm Bernstein has also set a target price of ₹ 620 per share on PFC along with an Outperform opinion on this stock. The company has maintained guidance for the full year. The asset quality of the company is continuously improving. UBS has given a Buy rating on this stock along with setting a target price of ₹ 670 per share. UBS says that the company's credit cycle looks good and due to the write-back of previous assets, the total credit cost has been negative in the September quarter. DAM Capital has set the highest target of ₹ 680 per share on this stock.
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