01 — At a Glance
The Government’s ATM for Power Projects Just Got a Raise
- 52-Week High / Low₹444 / ₹330
- Q3 FY26 Revenue₹29,095 Cr
- Q3 FY26 PAT₹8,212 Cr
- TTM EPS₹76.4
- Annualised EPS (Q3 Avg × 4)₹73.60
- Book Value / Share₹385
- Price to Book1.09x
- Gross NPA (Dec 2025)1.26%
- Net NPA (Dec 2025)0.23%
- AUM (Sep 2025)₹11,51,407 Cr
Flash Summary: PFC just delivered Q3 FY26 PAT of ₹8,212 crore — up 8.14% YoY. Gross NPA has collapsed from 3.91% in Dec 2022 to 1.26% in Dec 2025. The stock is at ₹408, has returned 17.3% in 3 months, yet trades at just 5.32x P/E. And then the Finance Minister walked to the podium in February 2026 and announced PFC-REC merger. Nobody’s lunch was fully digested that day.
02 — Introduction
The Banker Nobody Talks About But Everyone Needs
Let’s set the scene. You want to build a 2,000 MW coal plant, a 500 km transmission corridor, or a solar farm the size of a small district in Rajasthan. Your banker of first resort is not HDFC Bank. It is not SBI. It is Power Finance Corporation — a government-owned NBFC that has been quietly bankrolling India’s power sector since 1986, with less glamour than a fintech startup but considerably more zeros on the balance sheet.
PFC’s loan book stands at over ₹11.5 lakh crore. To put that in perspective, this single entity is lending more than the GDP of several sovereign nations combined. It finances everything from transmission lines to renewable energy parks to distribution upgrades. 82% of disbursements go to government-sector entities, which is essentially lending money to yourself at sovereign backing — not a bad business model when you think about it.
The Q3 FY26 story has three chapters. First: another excellent quarter of earnings, with PAT growing 8.14% YoY to ₹8,212 crore. Second: NPA ratios reaching near-laughably good levels — gross NPA at 1.26%, net NPA at a whisper-quiet 0.23%. Third: a bombshell in the Union Budget 2026-27 — the government announced PFC and REC will be merged. The merged entity will be the largest power sector financing entity in India. If you were asleep in the back row of the investor presentation, now would be a good time to wake up.
CARE Ratings Note (Feb 2026): CARE AAA; Stable / CARE A1+ — both PFC and REC retain top ratings. CARE confirmed the merged entity is expected to maintain comfortable capital levels without any material breach of regulatory limits. Nothing to see here. Just a ₹22 lakh crore combined AUM merger being executed like a routine board approval.
03 — Business Model: WTF Do They Even Do?
They Fund Electricity. So You Can Charge Your Phone. You’re Welcome.
PFC is a Systemically Important Non-Deposit taking NBFC registered with the RBI as an Infrastructure Finance Company. In plain English: they borrow money cheaply (thanks to sovereign backing), lend it expensively to power sector entities, and pocket the spread. Rinse, repeat, since 1986.
Their loan portfolio is a tour of India’s power sector value chain — conventional generation at 39%, transmission and distribution at 47%, renewable energy at 12%, and a sliver of “others.” They do project term loans, lease financing, short/medium term loans to equipment manufacturers, debt refinancing, deferred payment guarantees, and Letters of Comfort. Basically, if it has something to do with electricity and requires capital, PFC will find a way to lend you money for it.
The sovereign backing matters enormously. The Government of India holds 56% via the President of India. This means PFC borrows at rates that private NBFCs can only dream of. Their funding cost advantage is structural, not cyclical. And their Maharatna status (awarded October 2021) gives them greater financial and operational autonomy, which is government speak for “we trust them to make large decisions without asking us first.”
T&D Loans47%of loan book
Conventional Gen39%of loan book
Renewable12%of loan book
Govt. Sector~82%disbursements
Fun fact: PFC has supported approximately 25% of India’s entire installed renewable energy capacity. While the rest of us debate solar vs wind on Twitter, PFC quietly wrote the cheques that made it happen. No Instagram post. No press conference. Just ₹81,031 crore in renewable energy loans by March 2025.
04 — Financials Overview
Q3 FY26: The Numbers Go Brrr
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