---
title: "Buy Power Finance Corporation; target of Rs 500: Emkay Global Financial"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/286393384.md"
description: "Emkay Global Financial has reiterated a 'BUY' rating for Power Finance Corporation (PFC) with a target price of Rs 500, up from Rs 450. Despite a soft Q4 in AUM growth and disbursement, PFC showed strong profitability due to higher recoveries. The management expects a ~10% growth in FY27, with margins slightly moderated. EPS estimates for FY27-28E have been trimmed by ~4-5%, but a 16-17% RoE is still anticipated. The restructuring of PFC-REC is expected to be completed by FY27-end, pending regulatory approvals."
datetime: "2026-05-14T09:47:29.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/286393384.md)
  - [en](https://longbridge.com/en/news/286393384.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/286393384.md)
---

# Buy Power Finance Corporation; target of Rs 500: Emkay Global Financial

**Emkay Global Financial' research report on Power Finance Corporation**

PFC reported a soft Q4 in terms of AUM growth and disbursement, but delivered strong profitability led by higher recoveries and provision writeback. Loan book grew 6.8% YoY; the management attributed the soft growth to high prepayments and resolution in stressed assets. It guided for ~10% growth in FY27, as it expects prepayments to moderate as the rate-cut cycle has paused and disbursement share of short-term schemes like RBPF will reduce. Margins in the quarter moderated slightly, as yields moderated due to rising competition and improving DISCOM ratings while CoF inched up on a combination of forex volatility and lagged liability repricing. The management guides for spreads at 2.4-2.5% in FY27. It also indicated that the proposed PFC-REC restructuring is targeted to be completed by FY27-end, subject to requisite regulatory approvals; the final structure remains under discussion.

**Outlook**

Factoring in Q4 performance and management commentary, we trim our growth and margin estimates, resulting in a ~4-5% cut in FY27-28E EPS; we still expect PFC to deliver 16-17% RoE. We reiterate BUY and raise Mar-27E TP by ~11% to Rs500 from Rs450 (implying FY28E standalone P/B of ~1.0x, based on Rs440 TP for REC and 25% holdco discount).

**Disclaimer**

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Power Finance Corporation - 1405026 - emkay

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