4.80% Dividend Yield: Maharatna PSU Stock Declares 45% Interim Dividend For FY24; Buy?

With a Maharatna categorization, Power Finance Corporation Ltd. is a large-cap firm in the financial services industry. Established on July 16th, 1986, Power Finance Corporation (PFC) Ltd. is a prominent non-banking financial corporation in the nation, classified as a Schedule-A Maharatna CPSE. PFC has regional offices in Mumbai and Chennai in addition to its registered office in New Delhi. The firm has released its Q2FY24 results and announced a 45% interim dividend for FY24.

Power Finance Corporation Dividend

The Board of Directors made a "Declaration of interim dividend @45% Rs.4.50/- (Rupees Four paisa Fifty only) per equity share (subject to deduction of TDS) on the face value of the paid-up equity shares of Rs 10/- each for the FY 2023-24. Further, it is to inform that 27.11.2023 (Monday) shall be reckoned as the 'Record Date' for the purpose of ascertaining the eligibility of shareholders for payment of Interim Dividend for the FY 2023-24," said Power Finance Corporation (PFC) in a stock exchange filing.

A 132.50% equity dividend, or Rs 13.25 per share, at a face value of Rs 10 has been declared by Power Finance Corporation for the fiscal year ended in March 2023. This translates into a 4.80% dividend yield at the current share price of Rs 279. The company has a strong dividend history and has paid out dividends on a regular basis over the previous five years. Trendlyne data shows that since September 7, 2007, Power Finance Corporation Ltd. has issued 34 dividends.

Power Finance Corporation Q2 Results

In comparison to the same period last year, the state-owned Power Finance Corporation (PFC) reported a roughly 27% boost to its consolidated net profit to Rs 6,628.17 crore on Wednesday. According to BSE findings, the company's consolidated net profit for the quarter that ended on September 30, 2022, was Rs 5,229.33 crore. From Rs 19,344.39 crore during the same time last year to Rs 22,403.69 crore in the quarter under review, total income surged over 15% YoY. According to the firm, its consolidated Loan Asset Book jumped by 20% from Rs 7,71,119 crores in Q2FY23 to Rs 9,23,724 crores in Q2FY24, crossing the Rs 9 lakh crore milestone.

Under the Late Payment Surcharge Scheme, the PFC has approved Rs 70,499 crore and disbursed Rs 31,508 crore till September 30, 2023, according to PTI.

The company's consolidated net NPA (bad loans) dropped to 0.98 per cent in April-September 2023 while its gross non-performing assets (NPA) decreased dramatically by 98 basis points, from 4.38 per cent in H1'23 to 3.40 per cent in H1'24.

Power Finance Corporation Share Price Target

Deven Mehata-Equity Research Analyst at Choice Broking said, "PFC's current position at its all-time high (ATH) of 279 marks a significant milestone. The stock demonstrates robust support in the range of 225-235 levels, coinciding with the 50-Day Exponential Moving Average (EMA). This convergence of support factors strengthens the stock's overall foundation. On the daily chart, PFC is exhibiting a pattern of higher highs and higher lows, indicative of underlying strength in its trend. Furthermore, the stock is trading above all key moving averages, affirming its bullish trajectory."'

"The momentum indicator RSI has surpassed the 70 mark, suggesting a robust bullish momentum. Investors are advised to consider buying the stock on declines, taking advantage of potential opportunities. For investors who entered positions at lower levels, it may be prudent to book partial profits as the stock reaches higher levels.

Meanwhile, a trailing stop loss near the strong support of 225 can help protect gains and manage risk. For those contemplating fresh investments, it's advisable to wait for dips and consider purchasing near the first support level of 250. Setting a stop loss at 225 can enhance the risk-reward ratio for a more prudent investment strategy," said the analyst.

KKunal V Parar, Vice President - Technical and Algo at Choice Broking said, "On a daily chart, the stock has given a breakout of its Rectangle formation with above average volume which shows further upside movement in the counter. Moreover, the stock has been trading above all its Long Term Moving Average which suggests strong uptrend in the counter. As the stock has been trading in an uncharted territory with above average volume showing change in rhythm based on which further upside would be there. A daily momentum indicator +DMI is trading above its -DMI which is showing positive breath in the counter. Based on the above technical structure, we are expecting a good upside move upto the level of 300-322 with support of 250.00."

Disclaimer

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