Here are the brokerage Reviews of PFC / Power Finance Corporation.
HSBC has the following recommendation,
Power Finance Corporation Limited has few concerns over interest rate fluctuation, RBI policy norms and delinquencies in power project companies, however, it leverages on strong NIM margins, better asset quality, attractive ROE and ROA followed by a reputed brand name with the management’s expertise, balances the cart. So, we would be suggesting the investors to subscribe the issue for long-term gains.
IIFL has the following recommendation,
We recommend investors to subscribe in the issue, which has a price band of Rs193-203 (4-9% discount to market price), as implied valuation is attractive at 1.4-1.5x P/BV as at December 2010.
GEPL recommends a SUBSCRIBE
PFC has posted consistent financial performance over the years. At the FPO price band of Rs193-Rs203, PFC is available at P/E of 8.54x and 8.98x at the upper and lower bands respectively. The company is available at P/BV of 1.78x and 1.88x at the price bands against 2.0x for REC. Considering the strong fundamentals and steady business flow of the company, we recommend “SUBSCRIBE” with a medium to long term perspective.
Anand Rathi says,
Leadership position, coupled with its lower exposure to the transmission and distribution segment gives it an edge over its closest peer. The issue price looks attractive and therefore we suggest for a long term Subscribe to the issue.
Nirmal Bang's views on PFC FPO
On valuation front, at the price band of Rs 193‐203, PFC is priced at 10.15x/10.68x P/E of its FY11 EPS of Rs 19.0 whereas 1.34x/1.39x P/BV of its post issue book value of Rs 144.1/145.7 respectively. Whereas its closest competitor REC is trading at 1.76x P/BV of its BV of Rs. 127.06. good track record of management and attractive valuations we recommend investors to ‘SUBSCRIBE’ to the issue with a medium to long‐term perspective.
Sunidhi Analyst Kanika Thakar has the following view,
Although PFCs NIMs and return ratios are likely to witness some pressure in the year ahead, we assign a subscribe rating to the FPO on the back of attractive valuations and long term fundamentals being intact. We expect the stock to trade at 1.5x FY13E ABV over next one year thus giving a target price of Rs 285.
Angel Broking has a Subscribe,
At the CMP, the stock is trading at 1.1x FY2013 P/ABV. Historically, the stock has traded at 1.2-2.2x one-year forward ABV with a median of 1.75x. Considering asset-quality issues that could creep up as exposure to private sector increases, we have assigned an FY2013E P/ABV multiple of 1.4x, 20% lower than PFC’s median P/ABV multiple since listing. The resultant target price of `254 implies an upside of 25% from the upper end of the price band. Hence, we recommend Subscribe to the issue.
Unicon Wealth review on the IPO,
Going ahead, power sector outlook remains strong due to huge demand-supply gap. This augurs well for power finance companies with strong domain expertise & relationships with government & private bodies. The stock is being offered at 1.1x and 1.2x of its current book value at the upper and lower price bands respectively, which is cheaper to its peers. At the upper band stock is offered at 6% discount to its CMP. Looking at tremendous growth prospects in the power sector and diversified portfolio of PFC, we recommend subscribing to the issue.
Kotak Secruities has a target price of Rs 250 on an expectation of Rs 27 EPS for FY 2012 which is a 19% growth YoY.
UBS has a 12 Month target price of Rs 320 on EPS expectations of Rs 25 for FY 12.
