Power Finance Corporation - March 2013 Results Preview - Motilal Oswal

- Loan growth is expected to remain healthy at ~20% YoY. On a sequential basis, loans and borrowings are expected to grow by ~5.5% and ~5.4% respectively.

- Margins are likely to remain stable QoQ as the wholesale cost of borrowings has come off. Thus, NII is expected to grow by ~42% YoY and 4.4% QoQ.

- We expect an MTM loss of INR330m during the quarter, compared to INR460m booked in 3QFY13 and a forex gain of INR200m in 4QFY12.

- We expect NIMs to remain stable at 4.60%, compared to 4.61% reported during 3QFY13.

- Asset quality to be a key monitor given issues related to fuel linkages.

- The stock trades at 0.9x FY14E and 0.8x FY15E BV. Maintain Buy.

Source : Equity Bulls

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