Retain 'buy' on Power Finance - TP hiked to Rs.242 - Geojit BNP Paribas Financial Services

- 'Buy' rating on Power Finance Corporation (PFC) has been maintained with an increased target price of Rs. 242 as against the earlier target price of Rs.206. The stock is currently traded in the range of Rs.211.

- Company's 3QFY13 earnings were ahead of consensus estimates due to higher NIM.

- Recurring PAT at Rs.1120 crore is up 7.8% qoq and up 66% yoy.

- Cost of funds declined 19 bps qoq and yields increased 16 bps qoq on account of re-pricing.

- NPA slightly declined to 0.82% in 3QFY13 from 0.86% in 2QFY13.

- Net loan grew 26% yoy and expected that strong loan growth momentum to continue.

- Disbursements were up 20% and sanctions are upby 5.5%.

- Exposure to the private sector loans remained unchanged at 12% of total loans.

- TP is hiked to Rs.242 from Rs.206 to factor low NPA and higher growth.

Source : Equity Bulls

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