Ladies and gentlemen, good day, and welcome to Power Finance Corporation Limited Q2 H1 FY 2025 conference call hosted by Equirus Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone telephone. Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not guarantees of future performance and involve risk and uncertainties that are difficult to predict. I now hand the conference over to Mr. Sripal Doshi. Thank you. And over to you, sir.
Thank you. Good evening everyone. We have the management of Power Finance Corporation to discuss the Q2H1FY 2025 performance of the company and sector trends. The management is represented by Ms. Parminder Chopra, Chairman and Managing Director. Mr. Rajiv Ranjan Jha, Director Projects. Mr. Manoj Sharma, Director Commercial and Mr. Sandeep Kumar, Director of Finance. I would now hand over the call to Parminder Ma'am for her opening remarks post which we can open the floor for question and answer. Over to you, Ma'am.
Thank you. Good evening and a warm welcome to all of you. We have declared our Q2 and H1 2025 results today, and I'm happy to connect with all our investors to discuss these PFC's quarterly and half yearly performance. To start this, I would like to highlight some of the key milestones which we have achieved this quarter. In this quarter we have achieved the lowest gross NPA ratio of 2.71% since FY 2019 which was then at 9.39%. This has been achieved with our active resolution efforts since 2019. We have resolved around 55% of our stress asset pool. On resolution of these stress assets on an average we have achieved recovery of more than 60% which is among the highest in the infrastructure financing.
Also this quarter I'm happy to inform that PFC has become the first Indian PSU to successfully execute the largest ever foreign currency term loan deal of $1.265 billion. This is a landmark transaction and was executed through a facility agreement with multiple banks based in IFSC GIFT City. In earlier calls we had expressed our vision to expand PFC's global footprint. In this direction we had shared that we were in the process of setting up a subsidiary in IFSC GIFT City, Gujarat. I am happy to share that our subsidiary PFC Infra Finance IFSC Limited has received approval from the International Financial Services Centres Authority to commence operations as a finance company in IFSC. GIFT City, Gujarat. PFC Infra Finance IFSC Limited is the first finance company in IFSC dedicated to power and infrastructure lending.
As earlier shared with you, the company will provide foreign currency loans to domestic as well as international power and infrastructure projects catering to both government and private players. This strategic move reinforces PFC's position as a leader in the infrastructure financing space. Now coming on to the numbers and if we talk of the consolidated performance for H1 2025 the consolidated profit after tax stood at INR 14,397 crore, a 14% increase year- on- year. The group loan assets book registered a growth of 13% on year- on- year basis. The consolidated loan asset book as on September 3 0th, 2024 stands at INR 1,039,472 crore. On the asset quality we continue to see a decreasing trend in the NPA level. The consolidated gross NPA has reached below 3% and is at 2.62% in first half of financial year 2025 compared to 3.40% in 2024 first half,
The consolidated net NPA ratio for H1 2025 is at 0.80% compared to 0.98% in H1 2024. Now moving on to standalone performance in Q2 2025, we have registered the highest ever quarterly net profit of INR 4,370 crore, 14% increase on a year-on-year basis. For H1 2025, the net profit stands at INR 8,088 crore, an 18% increase from previous H1 . This increase is mainly driven by healthy growth in the net interest income. The net interest income for H1 2025 saw a 21% increase on a year-on-year basis and is at INR 8,736 crores. On the ratios front, we saw a positive trend over H1 2024. The yield rose by around 19 bp s from 9.92% in H1 2024 to 10.11% in H1 2025. The spread also improved from 2.55% in H1 2024 to 2.61% in H1 2025. The NIM also improved by 20 bp s over H1 2024.
The NIM for H125 is at 3.57%. These ratios continue to remain within our guided range. Further, the cost of funds also continues to be within our expected range at 7.50%. Also, our balance sheet remains exceptionally strong with a capital adequacy ratio of 24.38% and a net worth of INR 85,924 crore. Continuing with our endeavor to share our success with the shareholders, this quarter also the Board had declared interim dividend of INR 3.5 per share. With this, the cumulative interim dividend for FY 2025 stands at INR 6.75 per share. Now moving on to asset quality. In line with the guidance shared in earlier call this quarter, the Lanco Amarkantak loan of INR 2,376 crore has been resolved. Pursuant to receipt of NCLT approval, we saw a provision reversal of around INR 200 crore on resolution.
In addition to above, two loans with a cumulative outstanding of INR 313 crore have been moved out of stage 3, t hat is the NPA category . One loan of INR 304 crore has been technically written off. There was no impact of this on the P & L as 100% provisioning on this was maintained. The other loan has been upgraded from stage 3 on account of resolution. With this the Gross NPA ratio has reduced by 96 basis points from 3.67% in H1 2024 to 2.71% in H1 2025. The net NPA ratio has come down from 1% in H1 2024 to 0.72% in H1 2025. The outstanding NPA book has reduced from INR 16,487 crore in H1 2024 to INR 13,377 crore in H1 2025 mainly due to resolution of Lanco Amarkantak loan. Now we have 18 stressed projects of INR 13,377 crore u nder stage 3.
Of these projects, six projects worth INR 1,861 crore are being resolved outside NCLT. Out of this, two projects worth INR 1,661 crore, that is, Shiga Energy with a loan of INR 522 crore and TRN Energy with an outstanding loan amount of INR 1,139 crore are in advanced state of resolution. On Shiga Energy loan, I would like to share that we have received approval from all the lenders. Subsequent to this documentation and implementation of resolution will be undertaken. We expect the asset to be resolved by the end of the financial year. Currently we have maintained sufficient provisioning of around 31%. Further 12 projects worth INR 11,515 crore are being resolved under NCLT. Out of which seven projects of INR 2,612 crore are under liquidation process on which 100% provisioning has been made. For these five projects worth INR 8,904 crore are at various stages of resolution.
One of these five projects, KSK Mahanadi project of INR 3,300 crore has the highest outstanding amount. It's a six into 600 MW partially commissioned project. The evaluation of the bids is underway and we expect more than 100% recovery against the project basis. The current bids received, we have maintained around 55% provisioning on this project. On Stage 3 assets we continue to maintain a healthy provisioning of 74%. Now coming on to the loan asset growth this quarter. In the last quarterly results we have shared that PFC from April 1st, had been implementing a BCG suggested transformation strategy for improving its business processes. This has resulted in subdued disbursement in Q1 2025. I am happy to share that we are progressing well on the transformation strategy. From this quarter onwards we are back on track on our disbursement trajectory.
This quarter we have disbursed INR 46,663 crore. Cumulatively our disbursement in H1 2025 is at INR 66,146 crores. With this our loan asset growth registered a 10% year-on-year increase. The loan asset book for H1 2025 is at INR 4,93,363 crores. I would like to share that. In H1 2025 we have sanctioned around INR1.6 Lakh crores worth of projects. So we have a healthy pipeline going forward a lso. For FY 2025 we expect to maintain similar growth levels as last financial year. Thank you very much. Now we are open for questions.
Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Raghu from Travis Capital. Please go ahead.
Am I audible?
Yes, sir.
Yeah, actually, Mike, regarding the Gujarat IFSC branch which we have opened. What is the projected growth we foresee from that over next one, two years? And do we really have a plan to fund foreign companies or Indian companies in their abroad projects.
We have just received the certificate for commencement of business and being a financial company, so we are expecting that we will be disbursing loans to the various infrastructure sector including power sector there. We are intending to target domestic as well as the foreign companies. From IFSC we can disburse only in foreign currency and once we infuse capital more and then we definitely raise debt as funds are the stock in trade for any NBFC. So we will start our operation and we have a healthy pipeline. But it will all depend on the basically capital what we are infusing that how much business we can take up. But otherwise we have lot of interest from various especially power sector developers in India for taking a foreign currency loan from our GIFT City.
Just to follow up with that, I understand there are some tax benefits if you do that. So generally our profit margins and all will be much higher once the business there takes off. Is that something I can assume?
See, there is a tax holiday of 10 years in IFSC GIFT City, so it's very difficult to answer this question that how our profit margins are going to be there in the IFSC GIFT City subsidiaries.
Okay, just the last question regarding the same thing. Can we expect maybe something like a 10% loan book at the end of 10 years? Do you foresee something like that? From the foreign borrowings side.
10% I couldn't get 10%. Of what?
Of the total loan book.
BSE has a INR 5 lakh crore loan book. So it's not a branch, it's a separate independent subsidiary which will be functioning. So even if we infuse hypothetically say if I infuse INR 1,000 crore as the capital so we can take, there are always exposures which we need to take and the capital adequacy we need to maintain. So to start with I think we have to go a bit slow till the time we build on the capital.
Sure. Thank you so much. I'll join back.
Thank you sir. The next question is from the line of Shreya Shivani from CLSA. Please go ahead.
Hi. Thank you for the opportunity. I have two questions. First is on the disbursement side. So while the disbursements have picked up well after the glitch we saw in Q1, I wanted to understand, have there been higher repayments in the renewable or the distribution sector? I n spite of the disbursements picking up, the loan growth has been at 10% only. So that's my first question. Second, on the asset resolution. You mentioned about Lanco and two other companies, two other loans forming up to INR 313 crore, but one of your peers had reported that there was some cash recovery from KSK project approved by NCLT and doesn't that flow in? Didn't that come for you guys? Wouldn't you see some negative credit cost from that as well? These are my two questions. Thank you.
Yeah, I would like to answer your second question first about some cash recovery from one of the stressed assets. We have not accepted that and that remains unallocated and we are waiting for the final resolution to be achieved before we do allocation in the particular asset. So that is lying in the unallocated fund for PSC.
I mean I didn't understand what's the r eason for not accepting it?
See how much recovery is there. It will all depend on the final NCLT order. Once we receive the NCLT order then only we can decide that how much is the principal to be adjusted and how much has to be accounted for as the interest. So in our view we can't allocate it right now. It will not disputing. So we have not done any provision reversal to that extent.
Understood? Understood. Sure. And on the loan growth, ma'am?
On the loan book, see, our recoveries were scheduled a bit higher in the first half as compared to in the second half. So that is the reason that you are not seeing the growth coming in the first half even despite we are having disbursed around INR 64,000 crore.
Got it. So the repayments, the bigger chunk of repayments happened in Manish? Got it. Got it. And ma'am, just a last follow-up question on the conventional generation book. That book has been steady at the same level for the past couple of quarters. Are we seeing any movement on the ground in terms of thermal CapEx? Any sanctions that you could talk about?
Yes, definitely. The focus of the government is to almost double the capacity by 2030 and for that a major chunk maybe around 84 GW is going to be contributed from the thermal or the conventional part. So this, if we talk of the first half of FY 2025 we have sanctioned around INR 50,000 crore worth of loan to the conventional projects. So there is a movement and it's picking up.
Sure. But it's very difficult to give the timeline on disbursement for this INR 50,000 crore. Is that fair to say?
See, now you can very well understand that if the projects are being sanctioned at this stage, it always takes some time, even though I think the basic infrastructure because these are mostly the expansion projects. So basic infrastructure being always there. But in any case, it's going to take another three to four years for disbursement to have completed this.
Got it, ma'am. Very useful. Thank you so much and all the best.
Thank you.
Thank you, ma'am.
The next question is from the line of Manish from Phillip Capital. Please go ahead.
Yeah, thanks for the opportunity. I have a couple of questions I will start with. Can you quantify the Stage 2 assets and when is AP DISCOM account expected to be regularized?
I think I couldn't get your second question.
We understand that it was a part of Stage 2 last quarter. So is that account regularized now? Like overdues are cured or still under.
Stage 2 Andhra Pradesh utility they have. They have the regularization now in payment and the Stage 2 as you already know that we always have in. Most of the 80% of our book is from the state sector. And in the state we have never experienced any of the NPAs coming out. There is slight delays. So few of the states there are around that they may fall in one quarter in the Stage 2 but in the next quarter they are upgraded to Stage 1. So this off and on is happening and most of the Stage 2 projects are in the state sector.
Okay. Would you want to quantify this number right for the end of Q2 or?
I think that it doesn't make much relevance because if these are all the power sector projects. Sure.
My next question is on your disbursement target. So you have given some sense on loan growth. Can you give us the disbursement target for the full year?
See disbursement. I think it's why you want to have the disbursement target. It ultimately boils down to the growth, and we have therefore given a very clear-cut guidance that we are expected to have the similar level of growth as we have in the previous years, and it's around 14%.
Got it. And finally one on the renewable side.
So.
Hello?
Hello Mr. Manish.
Hello?
Hello, Mr. Manish, are you there? As there is no response from the participant we will move to the next question. Before we take the next question we would like to remind participants that you may press Star and one to ask a question. The next question is from the line of Shweta from Elara. Please go ahead.
Thank you, ma'am, for the opportunity. Ma'am, couple of questions. Can you provide color on the infra portfolio? Infra and Others.
Hello.
Yeah, I wanted to know if you can provide some color on this 21,000 odd crores of infra plus.
Other projects like what are these?
Are these pure core infra assets and allied? Can you just allude to these?
see infrastructure around. We have an outstanding book of around INR 21,000 crore and the major outstanding balances are. One is the HPCL Rajasthan Refinery and there are. We have also funded the manufacturing facilities to the various private sector developers and there are small, small other infrastructure segments where the outstanding is around INR 9,400 crores that majorly consist of the various ports which are there. Okay. Okay.
Also, ma'am, just a follow-up question. So Q1 you mentioned that the due diligence process is underway for support group loan. And you also mentioned that the finalization will depend upon completion of the processes. So what is the color on that? And plus are we lending to Vodafone Group?
We have done a detailed due diligence but somehow the board in its wisdom has decided that it's a new sector for us, so it may not be. We may not take that high an exposure, so finally we have decided not to go ahead with the sanctioning of the loan for Shapoorji Pallonji and the other known Vodafone. It was never in the consideration zone in PFC. I don't know from where all these media news are coming from.
Okay ma'.
Ma'am, third question is: can you provide sanction break-up across key?
Sanctions. In the generation we have sanctioned in this financial year around 15,000-60,000 crore. Around 60% is in the generation and distribution constitute to around 17%. Infrastructure 15% transmission and other sectors maybe around 8%.
Okay, ma'am, last one, last question. What is our incremental cost of funds and the latest FCB borrowing which you also mentioned in the opening remarks? What is the blended cost? Thank you so much.
My blended cost for the raisings made during the H1 is around 6.27%. If we consider the first foreign currency loans and of that the foreign currency borrowing without hedging it we consider is around 3%.
Okay. And, ma'am, the incremental cost of borrowing?
This is the incremental cost of borrowing. I said otherwise the weighted average cost of borrowing is around 7.5%. Okay, noted, ma'am.
Thank you so much.
Thank you, ma'am.
Am.
The next question is from the line of Alok Srinivasan from UBS. Please go ahead.
Yeah, hi, thanks for taking my question, ma'am. Firstly, on assets under resolution, could you help me with this number? On KSK Mahanadi, 100% recovery is on principal or admitted claims in NCLT because I understand your admitted claims are higher. This is the principal that is there. And also on Sinnar thermal power plant, could you let us know what is happening over there and what could be the likely recovery from that one?
The recovery. Hello.
Yeah, ma'am.
Yeah. Your first question was on KSK, right? Yeah. Yeah. So in KSK, our recovery is more than the claim amount.
Okay.
Your second question was on.
Yeah.
I couldn't get your second question, ma'am.
On Sinnar, what kind of write back are we expecting, and I mean, is there any timeline when that can happen?
We have invited the bids and at one stage we have received the bids, but the evaluation process is still on. So I think in a month or so we may finalize the evaluation and then we will submit it to NCLT. After that, after the approval of NCIT, only that will be able to adjust it.
Okay. Got it, ma'am. Secondly, on infra projects, as you mentioned that for that particular project it went to the board and was decided not to do it. But ma'am, how does it work? Means do all infra projects go to the board? And is the board, whatever board is saying, is it mandatory for you to stick to what the board is saying in these kind of projects?
See, as per our internal delegation of power infrastructure project sanctions will go to the board. And in board a collective decision is always done for whatever proposal has been made by the company concerned appraising unit. Then it will go to the board and board takes a collective.
Okay. And then ma'am, it is mandatory then for the company to accept what the board is saying, right?
Yeah, definitely. Board is the competent authority to approve projects.
Yeah. Just one more question, ma'am. On that generation disbursement of around 15,000 crore during this quarter, how much will be renewable.
Generation? Disbursement you are asking?
Yeah, because last quarter I believe we had said 18% of the total was renewable.
See, with respect to disbursement, this particular quarter we have disbursed around 30% to the generation. Out of which 13% is towards the renewable and 19% is towards the conventional project. This is about the Q2 2025.
Got it, got it. Thanks a lot, ma'am.
Thank you, sir. The next question is from the line of Abhijit from Motilal Oswal, please go ahead.
Yeah.
Good evening everyone. Thank you for taking my questions. Ma'am, I had three questions. The first thing is, I mean a clarification. You already said that for FY25, we are expecting loan growth to be similar to last year which is around the 14% levels. Again, I mean, I assume that this is in the context of a first half where you were implementing a transformation program. Now that it is over and like you said in your opening remarks, we're going to be embarking on a stronger disbursement trajectory from the second half onwards. From next year onwards, what is the loan growth that we have in mind?
See, the loan growth, I think as our base is expanding, so any higher percentage of the loan growth may not be possible. And at this stage also if you see the last year disbursements were to the tune of around INR 1,25,000 crore. And that's a huge sum. So it will all depend on how the economy grows and how the infrastructure sector picks up within the overall economic growth of the country. So as you are already aware that we are one of the largest lenders in the infrastructure and especially for the power sector. So our contribution is going to be according.
Got it. The second question I had was on margins. Given that given our expectations that very soon we might be heading into a declining interest rate environment in India as well. Can you just explain with regards to our assets and liabilities, when you look at assets, what proportion of your assets are fixed and what proportion of them are floating within floating at what frequency they come up for repricing? Likewise on the liability side, what proportion of our liabilities are fixed and floating?
On the liabilities front, we have around 27% as the floating rate liabilities and around 72%-73% as the fixed rate liabilities. As you know that most of our borrowing is from the bond market and the bond market doesn't have the depth and the appetite for the floating rate bonds. Whereas on the asset side, we have our around 95% of the assets are on the floating rate. As in most of the assets lending, we have either a three-year reset clause or a one-year reset clause. So based on our overall weighted average cost of borrowing, we do fix the lending rate and whatever is the current lending rate, repricing of the assets is going to happen at those rates.
Got it? Ma'am. Just to clarify on that, when you say three year reset clause or a one year reset clause, those resets will depend on your internal card rate which again is dictated by your cost of borrowings. Is that understanding correct?
Cost of borrowing will be the basis for the internal MCLR?
Yes ma'.
Am.
So I mean from a sensitivity perspective, if there is a 25 basis cut in the repo rates, what will that translate into the impact on our margins?
See, it's very difficult to say one because our borrowing is not linked to the repo rate and we have already seen that there has been a downward trend in the bond market. Whereas if we see that on the bank loan book front the loans which we have taken from the banks banks marginal costs are either steady MCLR rate or is increasing. So there has not, we have not witnessed any decline in the bank rates, especially in the MCLR rate of the bigger. And there we have around 30% of our borrowings from the bank. So how that mix is going to be there and how the market benchmarks are going to be affected with any cut in the repo that we have to see before we work out any impact.
Got it, ma'am.
Thank you.
Just one last question coming within your infrastructure and others book, if you could just share one data point with me that as part of the outstanding infrastructure and others book that you have, what is the mix of public and private? And likewise if you look at one H sanctions that you have given in the infrastructure sector, what is the mix between public and private?
For the infrastructure sector, 96% sanctions are for the government sector and only around 4% is for the private sector. As we have earlier also shared, we are following a steady and slow process for funding of the infrastructure sector and we are a bit cautious because it's a new sector for us and out of the H1 book if you ask me, so the total sanctions for H1 is around 23,000, maybe 24,000 crores. And that too again the percentage may be the same.
Got it and thank you. In the interest of time, I just wanted to squeeze in one last question. You recall that RBI circular on ECL provisions for project financing? Recently there has been media coverage. Just wanted to hear from you. I mean any update that you heard either from the Power Ministry or from the Finance Ministry on that RBI circular on ECL provisions on project financing.
See, as we understand that PFC as well as other lenders through their respective ministries and banks also through the Ministry of Finance have taken up the issue with RBI on the infrastructure provisioning circular. You know what you are mentioning. So we have to see whatever suggestions have been given. What finally comes out in the final version of the circular and only then we will be able to say something because there were numerous I think suggestions which were made as a part of by various lenders on this circular.
Got it. Thank you so much for patiently answering all my questions. Wish you and your team the very best.
Thank you.
Thank you, sir. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two per participant. The next question is from the line of Romil Oza from Romil Oza & Co. Please go ahead.
Hi Ma'.
Am.
Company.
That's on a great quarter. So one thing that I have been calculating is that on a consolidated basis. Hello.
Hello. Yes. Yes.
On a consolidated basis our recoveries from the non-performing assets might be upwards of INR 8,000-8,500 crore pre-tax. And that is between REC and PFC because between KSK Mahanadi and Sinnar. What bids we've been seeing in the newspapers it seems that our provisioning has been quite conservative. So that would add like almost a quarter of earnings to PFC's earnings for the year. It would be like an additional quarter of earnings and that would increase our capital adequacy rate which is already hovering around 25% to a much higher level.
And.
If you go by the projections for electricity demand, I think we are lagging as a country in terms of putting up the demand. Aren't you going to pay a very large dividend which I think might be a second priority given that the growth required especially from PSE and REC, Power Finance Corporation and Rural Electrification Corporation, shouldn't that be much higher? Like I know you love being conservative but isn't 14% a very low number?
See, I think your observation is correct. We have been conservative in provisioning and as a result we have. We are expecting our recoveries to be good as compared to the provisioning, whatever we make. But on the other side that we require capital for growth. As you have seen that in the previous quarter we were at around 27% and this quarter we are at 24.5%. And that all depends on capital adequacy. The risk weight which we assign that is required to be assigned to each of the asset is very important. We had disbursed a lot of money under various schemes like LPS, LIS where it was all backed by common guarantee and a 20% risk weight was required to be assigned to those assets.
If we go for the growth in the current scenario where lot of capital works are happening and disbursements are going to be towards the capital work that is going to attract and not backed by common guarantee that is going to attract 100% risk weight on those assets for that purpose. Maintaining the capital I think is going to be for a consistent growth going forward. We need some capital on the regular basis. But yes, to some extent during the intervening period we may have some reversals resulting in higher profits. As you know what is our dividend policy, we always follow the Government of India guidelines for the dividend and we pay 30% of the profit after tax or 5% of the net worth as dividend, whichever is higher. We are going to follow that policy in the coming future years also.
In any case, if something is added on to that, and that we will be giving as a rewarding investors and giving them the handsome return.
And.
Ma'am, sorry to interrupt you, sir.
May we request you to return to the question queue?
Sure.
It's been only one question and I think my question is very relevant in that I think our company has been quite conservative in its projections and it's performing far better than the analysts are projecting. So I wanted to ask one more question.
Question. Yes, tell me.
I think, I know you know you've been here for 30 years. You've helped grow the company and the country, but you know, I think your growth projection is too conservative given the total addressable market and given the need from the country to add the power generation, and what's happening is that the market is not discovering the true value of Power Finance Corporation, and I know you like being humble but at a certain point you'll have to reveal that our Power Finance Corporation is one of the best companies in India right now and probably one of the best investments in India right now, so that's why, you know, I was asking you this question.
I think you observe that there is a lot of potential for infrastructure and power sector financing in the country. And looking at the overall target for funding of the power sectors like it is expected that 30 lakh crore is expected to be the funding requirement in 2030. So there's going to be a huge requirement but with a lot of institutions coming up for interested services financing in the infrastructure financing space. As you know that now PFC, REC in any case is there, IIFCL is there now NaBFID is coming up. Apart from that interest, traditionally other than power sector, all infrastructure sector is being taken care by the banks. So I think all the institutions have sufficient headroom available for the growth. And that is why we are saying that okay. We wanted for the infrastructure sector as per our earlier guidance.
We wanted to be a bit slow and cautious in our approach because it's a new area for us, the power sector. We agree that we understand the power sector. And I can assure you that the power sector business as much as we can do, we will definitely be doing. And right now I can say only this much.
Thank you for your time and thank.
you for your service to the country. Ma'am.
Thank you.
Thank you, sir. Ladies and gentlemen, in order to ensure that management is able to address questions from all participants in the conference, please limit your question to one point. Participants, the next question is from the line of Jigar Jani from BNK Securities. Please go ahead.
Congratulations.
Sir.
Can you please use your handset?
Just. Is this better?
Yes.
So I just wanted to check two bookkeeping questions. One on TRN Energy. What would be our PCR.
TRN Energy we have on 50% provisioning. Right.
And.
Just confirming Sinnar TR would be 80 and KSK would be 55.
Yeah, yeah.
What would be the recovery expectations on TRN and Shiga given that we are very close to resolving them? Any recovery expectations or percentages that you could share?
See, I think our provisioning will be sufficient to take care of the resolution. And there would be slightly. Right back.
Thank you.
Sir.
The next question is from the line of Nikhil from Bernstein. Please go ahead.
Hi.
Thank you.
Ma'am. Just had one question. If you Adani Power plant supplying power to Bangladesh. If you could give some color on that. What is the exposure and what is the loan security mechanism? And if there is any stress foreseen on that asset.
I don't remember upfront what is the outstanding. But definitely we have funded the project in Jharkhand which is supplying power to Bangladesh. But there has not been any delay of a single day in our recoveries from this project. And I think the promoter is taking care and we have heard that they are going to get all their payments from the Bangladesh government soon. But otherwise there is no delay for the PFC servicing. This is what I did.
Thank you. That's very good.
Thank you, sir. The next question is from the line of Sanket Chheda from DAM Capital. Please go ahead.
Yeah.
Hi ma'.
Am.
Congrats on a very good quarter and a strong comeback. My question was on disbursement this quarter. Disbursements have been pretty strong. So was it like some disbursements of Q1 which could not be done because of the system change that happened too? Or should we see this run rate sustaining going ahead as well? Whatever we did in Q2 in terms.
For the first time, I think we will be able to keep the pace what we have achieved, and we will be able to get the growth numbers in line with the previous year.
Okay. This is after deciding not to go ahead with Shapoorji. You still think 30%-14% would be doable, right? Yeah, sure. Ma'am.
Am.
Yeah, that. That was only question from my side. Thanks. Thanks a lot.
Thanks.
Thank you.
Sir.
The next question is from the line of Raghu from Travis Capital. Please go ahead.
Sorry, just last thing. Confirming next two quarters. What is the expected write back? We can expect if the KSK Mahanadi and all get resolved in the next six months. Can we assume something around thousand crores?
See, the only thing is that once the evaluation is complete, we will be submitting it to NCLT. We can't say that when the NCLT approval is going to come. Once we receive the NCLT approval and the restructuring plan is implemented, what has been approved by NCLT, only then we can go for reversal of the provisioning. I can show you the number that in SH we have INR 159 crore of provisioning. In TRN we have around INR 550 crore provisioning. In KSK we have around INR 1800 crore provisioning.
Okay, so at least next three quarters can we expect around INR 1,000 crores? Maybe including these.
I have given you. It all depends on the stage of resolution, and we are expecting that in TRN and Shiga we will be able to conclude with this function.
Yes. Thank you so much. Thank you. Have a great day.
Thank you.
Thank you. The next question is from the line of Sripal Doshi from Equirus Securities. Please go ahead.
Hi ma'.
Am.
Just a question on margin front. So how do you see the margin trending for us for the second half? You know, in case of. Just wanted to understand that part.
See, we always have given guidance. We have always given guidance that our margins are going to remain at around 3%-3.5% range, and we expect that we will definitely be within these levels.
But given the current situation, will we be near to the upper end side of it or there could be, you know, or it could be lower side of the band?
It all depends on the growth numbers. And if you see that in first half we are slightly above 3.5. Right?
Got it.
Thank you.
Got it. Thank you. Thank you.
Thank you, sir. As there are no further questions, I would now like to hand the conference over to Mr. Sripal Doshi for closing comments.
Thank you everyone for being part of the call. And thanks to the management of Power Finance Corporation for giving us the opportunity to host this call. Thank you everyone and have a good weekend.
Thank you. Thank you.
Thank you, sir. On behalf of Equirus Securities, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.