PFC margin rebounds as expenses fall, but revenue slips 1.18% YoY
Net profit grew 2.87% year on year, while a higher tax rate and 4.52% growth in interest expense limited the benefit from lower costs.
Filed 13 May 2026, 19:18 IST · after market close · Power Finance Corporation Ltd (PFC)
Key takeaways
- Consolidated net profit rose 2.87% year on year to Rs 8,597.61 cr despite a 1.18% revenue decline.
- Operating margin expanded 5.84 percentage points as expenses fell 80.49% year on year, reaching 98.56%.
- The stock gained 1.22% on the first trading day, within its 1.48% median post-results move over the last eight quarters.
Price around the results
Lower expenses lift profit despite softer revenue
PFC's consolidated revenue fell 1.18% year on year and 0.60% sequentially, but operating profit rose 5.05% and 1.57%, respectively. Expenses fell much faster than revenue, declining 80.49% year on year and 59.66% sequentially, which drove the margin expansion. Profit before tax increased 5.09% year on year and 5.62% sequentially, while net profit growth was lower at 2.87% and 4.70%.
Margin recovery continues, with tax and interest limiting gains
Operating margin expanded 5.84 percentage points year on year and 2.10 percentage points sequentially because costs did not grow with revenue. Interest expense rose 4.52% year on year, although it fell 1.36% sequentially, while the tax rate increased 1.68 percentage points year on year and 0.69 percentage points sequentially. Other income was negative and represented -0.57% of pre-tax profit, so it did not support earnings quality.
PFC remains well above the reported sector margin
The 98.56% operating margin was 39.15 percentage points above the 59.41% median for the 52 Financial Services peers that had reported the quarter. Margin has now recovered for two consecutive quarters after falling to 94.76% in Q2FY26 from 99.26% in Q1FY26, but remains below that Q1 level.
Initial market reaction was ordinary, followed by weaker returns
The stock gained 1.22% on the first trading day after the results, close to its recent results-day pattern and below the 1.48% median absolute move across eight quarters. It was down 3.36% after five trading days and 4.83% after 30 trading days. The longer history is mixed, with five positive and three negative reactions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹28,920 cr | ₹29,095 cr | -0.60% | -1.18% |
| Other income | ₹-63 cr | ₹27 cr | — | — |
| Expenses | ₹416 cr | ₹1,031 cr | -59.66% | -80.49% |
| Operating profit | ₹28,504 cr | ₹28,064 cr | +1.57% | +5.05% |
| Operating margin (%) | 98.56% | 96.46% | — | — |
| Interest | ₹17,333 cr | ₹17,572 cr | -1.36% | +4.52% |
| Depreciation | ₹16 cr | ₹18 cr | -12.94% | -1.40% |
| Profit before tax | ₹11,092 cr | ₹10,502 cr | +5.62% | +5.09% |
| Tax | ₹2,494 cr | ₹2,290 cr | +8.93% | +13.56% |
| Net profit | ₹8,598 cr | ₹8,212 cr | +4.70% | +2.87% |
| EPS (₹) | ₹21.21 | ₹19.07 | +11.22% | +10.82% |
Operating margin of 98.56% compares with a Financial Services sector median of 59.41% across 52 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.22% | +0.04% |
| Next session | -0.06% | — |
| 5 sessions | -3.36% | -4.40% |
| 15 sessions | -3.20% | — |
| 30 sessions | -4.83% | — |
Volume on the results session was 0.71× its 20-day average.
What to watch
- Whether operating margin holds near 98.56% after its 2.10-percentage-point sequential recovery.
- Whether revenue returns to growth after falling 0.60% sequentially and 1.18% year on year.
- Whether the tax rate moves below 22.49% and interest expense remains below Rs 17,333.46 cr.