Power Finance Corporation Q3 FY26 – ₹9 Lakh Cr Loan Book, 21% ROE, P/E 5.3: Cheap PSU Dinosaur or Cash-Printing Maharatna?

1. At a Glance – When the Government Prints Profits Too

Power Finance Corporation (PFC) is what happens when the Government of India decides to run a money factory and casually lists it on the stock exchange.

Market cap: ₹1.36 lakh crore
Current price: ₹412
Stock P/E: 5.35 (yes, you read that right)
Book Value: ₹385
Price to Book: 1.07
Dividend Yield: ~3.8%
ROE: 21%
Debt: ₹10 lakh crore+ (because why stop at 6 digits?)

Q3 FY26 consolidated PAT came in at ₹8,212 crore, up 8.1% YoY, while quarterly revenue hit ₹29,095 crore, growing 8.6% YoY. No fireworks, no drama — just a steady PSU uncle quietly counting cash in the corner.

Gross NPAs are down to 1.47%, Net NPAs at 0.31% as of Sep 2025. For a lender whose customers are mostly state utilities, that’s… shockingly clean.

And then there’s the loan book: ~₹9 lakh crore. That’s not a typo. That’s sovereign-scale lending with sovereign-scale confidence.

So the obvious question:
Is PFC criminally undervalued… or is the market just allergic to PSUs with too much government involvement?

Let’s open the files.

2. Introduction – Banker to India’s Power Addiction

India runs on electricity. Electricity runs on power plants. Power plants run on debt.
And debt runs on Power Finance Corporation.

PFC is a systemically important, non-deposit-taking NBFC registered as an Infrastructure Finance Company with the RBI. Translation: it doesn’t take your FD, but it happily lends to anyone who promises megawatts, transmission lines, or a vaguely defined renewable future.

With Maharatna status since October 2021, PFC enjoys operational autonomy, cheaper borrowing, and — most importantly — the implicit blessing of the Government of India, which owns ~56% of the company.

This isn’t some scrappy fintech lender chasing BNPL customers. This is a policy instrument disguised as a listed company.

Its job is simple:

• Fund India’s power sector
• Bail out stressed utilities
• Refinance legacy messes
• Smile politely while doing it

Over decades, PFC has financed thermal plants, renewable projects, transmission corridors, and distribution reforms — sometimes profitably, sometimes patriotically.

What’s changed in recent years is discipline. NPAs have fallen, margins have stabilized, and returns are consistently above 20%. Yet the valuation remains stuck in PSU jail.

So is PFC a boring dinosaur… or