Let’s discuss the business aspect of Power finance corporation limited.
Table of Contents
BUSINESS ANALYSIS
Power Finance Corporation Ltd (P.F.C) is an Indian Financial institution under the ownership of the Ministry of Power, Government of India.
The company is engaged in power sector financing and in the integrated development of the power and associated section.
Power Finance Corporation is the 8th highest profit making CPSE as per the Department of Public Enterprises Survey for FY 2017-18.
Power Finance Corporation is India’s largest NBFC and also India’s largest infrastructure finance company.
The company has three wings each headed by a Functional Director namely, Commercial Division, Project Division and Finance and Financial operations division.
The Commercial Division looks after the credit appraisal and categorization of borrower entries, power sector reforms, review and analysis.
The Project Division controls the operation in various states & project appraisal.
The Finances Division looks after the fund mobilization and disbursement.
Power Finance Corporation has presently ten subsidiary companies.
Now, coming to the financials of Power Finance Corporation Ltd.
FINANCIAL ANALYSIS
The Market Capitalization of Power Finance Corporation Ltd is Rs 32,710 Cr.
Power Finance Corporation has a price to earnings ratio of 2.78 which is lesser than the industry price to earnings of 5.13.
The return on capital employed is 9.45% which is quite decent with respect to other government companies.
The return on equity is 21.3% which is quite awesome which shows that the company is focusing on profit generation.
Power Finance Corporation has a PEG Ratio of 0.20 and which is less than one which indicates the stock is undervalued.
Power Finance Corporation has been maintaining a healthy dividend of 19.23%.
Based on market capitalization, Power Finance Corporation stands tall at 1st position and operates in the Term Lending Institutions Sector.
The company has a profit growth of 64.9%.
From the last 4 quarters (Jun 2020, Sep 2020, Dec 2020, Mar 2021) the sales have increased from Rs 16,914 Cr to Rs 18,149 Cr.
From the last quarter (Dec 2020) to this quarter (Mar 2021), the net profit of Power Finance Corporation has increased from Rs 2894 Cr to Rs 2922 Cr.
The earning per share of the company is Rs 11.07.
In the past 4 years (Mar 2018, Mar 2019,Mar2020, Mar 2021), the operating profit has drastically increased from Rs 42,041 Cr to Rs 64,549 Cr.
The share capital of the company is Rs 2640 Cr which is the same from the last 5 years.
In the year 2021, the reserves have increased to Rs 58,127 Cr from Rs 46,760Cr in the year 2020.
The net cash flow of the company is Rs 3023 Cr.
Promoters have a holding of 55.99% till June 2021.
The Flls have a 17.35% holding.
The Dlls have a 19.37% holding while only 7.28% is with the public.
This is a brief overview of the financials of the Power Finance Corporation Ltd which showcase the company’s dominance in their respective market.
Now, let’s deep drive into the technical of the Power Finance Corporation Ltd.
Technical analysis is the most important factor of investing and trading which consists of technical chart patterns and technical indicators. The technical indicators like moving average and super trend helps to make an investors judgement more accurate.
CHART PATTERN ANALYSIS
There is a formation of a complex reverse head and shoulder pattern in a daily time frame.
Power finance corporation share price has fallen near to its support area. As the financials are superb it is likely that the stock will rally in upward direction in a very short span.
Recently there was a good amount of volume built up in the Power finance corporation finance share.
The Power finance corporation share price on 28th July 2021 is Rs 123 which would definitely change in the upcoming future.
MOVING AVERAGE
For Power finance corporation share price analysis, we are taking 9 days and 21 days moving average.
The 9 days moving average had crossed the 21 days moving average some time ago. There is some weakness in the stock for the current phase, but the financials are superb and hence the stock will definitely move in the upward direction.
21 days moving average is indicated by blue line while 9 days moving average is shown by red line.
SUPER TREND
In the above chart, the super trend is indicating a buying signal. With such good financials the Power finance corporation share price is bound to achieve new heights.
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