Power Finance Corp. Gets Target Price Cut By UBS On AUM Growth Miss In Q3

Power Finance Corp. received target price cuts from analysts on "disappointing" growth, with credit cost expected to remain negative in the near term.

The company reported a net profit growth of 23.3% on the year to Rs 5,829 crore versus Rs 4,727 crore.

The company said its total income rose 13.7% on the year to Rs 26,822 crore, compared to Rs 23,593 crore. Net interest income rose 16.3% on the year to Rs 9,840 crore from Rs 8,456 crore.

UBS maintained 'buy' and cut the target price to Rs 600 from Rs 670 per share. The firm reported profit, but posted a small miss on the asset under management growth, the brokerage said. However, the stock looks attractively priced, and the management is confident of closing the year at 14% AUM growth, with better disbursement in the final quarter.

Weakness in the name provides a good opportunity to buy at the current levels, UBS said.

Macquarie maintained an 'outperform' rating with a target price of Rs 660 per share. All eyes are on the growth trajectory, the brokerage said. The current fiscal growth target of 14% year-on-year looks difficult, and it expects the credit cost to remain negative in the near term.

The board also approved the declaration of a third interim dividend of Rs 3.50 per equity share on the face value of the paid-up equity shares of Rs 10 each for 2024-25.

Power Finance Corp.'s share price rose 2.31% to Rs 382.5 apiece in early trade. It was trading 1.8% higher at Rs 381.2 apiece as of 9:18 a.m., as compared to a 0.13% advance in the NSE Nifty 50.

The stock declined 10.61% in 12 months. Total traded volume so far in the day stood at 9.3 times its 30-day average. The relative strength index was at 46.91.

Twelve analysts tracking the company maintain a 'buy' rating, according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 52%.