Maintain 'buy' on PFC – TP Rs.206 - Geojit BNP Paribas

- Company's 2QFY13 earnings beat market expectations on better NIM. PAT at Rs.1040 crore increased 6.6% qoq and 148% yoy.

- Costs of funds increased 16 bps qoq and yield increased 27bps qoq on re-pricing.

- NPAs were kept low maintaining the strong earnings momentum.

- Net loan growth continued to be strong at 27%yoy and the management has maintained its loan growth target of 20% plus from the current level, implying an upside risk to the market estimates.

- Loan growth on a qoq basis was primarily on account of short-term loan growth.

- Leverage remained steady at 6.89. Foreign currency loans marginally increased to 6% vs. 5% in 1QFY13. Exposure to private sector remained steady at 12%.

- Retain buy rating on the stock with a target price of Rs.206.

Source : Equity Bulls

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