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Investing.com - UBS maintained its Buy rating on Power Finance Corp Ltd (NSE:POWF) while lowering its price target to INR580 from INR600.
Power Finance Corp reported quarterly results that exceeded UBS expectations in both loan growth and profit after tax. The company achieved 15.7% year-over-year loan growth, surpassing UBS’s estimate of 13.8%, with quarterly disbursements increasing by 86% compared to the same period last year.
Net interest income grew by 26.4% year-over-year, exceeding UBS projections by 3.6%, while margins remained steady excluding a one-off event from the previous quarter. Higher translation losses led to pre-provision operating profit growth of 5.0% year-over-year, missing UBS estimates by 8%.
The company recorded negative provisions at 0.5% of assets under management for the quarter, attributed to declining Stage I/II provisions following rating upgrades for certain distribution companies. Among key segments, renewable energy showed strong performance with 36% year-over-year growth, while distribution growth also accelerated.
UBS upgraded its earnings per share estimates for fiscal years 2026 and 2027 by 3%, maintaining a constructive outlook on the stock with the revised price target of INR580, which implies a standalone price-to-fiscal year 2027 estimated book value per share of 1.3x.
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