Ladies and gentlemen, good day and welcome to Power Finance Corporation Q2 FY 2026 earnings call, hosted by Motilal Oswal Financial Services Limited. As a reminder, all participants' lines will be in 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 phone. Please note that this conference is being recorded. I now hand the conference over to Abhijit Tibrewal from Motilal Oswal. Thank you, and over to you, sir.
Yes, thank you, Danish. Good afternoon, everyone. I am Abhijit Tibrewal from Motilal Oswal, and it is our pleasure to welcome you all to this earnings call. Thank you very much for joining us for the Power Finance Corporation call to discuss their Q2 FY 2026 earnings. To discuss the company's earnings, I am pleased to welcome the senior management team at PFC, represented by Ms. Parminder Chopra, Chairman and Managing Director; Mr. Rajiv Ranjan Jha, Director of Projects; Mr. Manoj Sharma, Director of Commercial; Mr. Sandeep Kumar, Director of Finance. On behalf of Motilal Oswal, we thank the senior management and the investor relations team of Power Finance Corporation for giving us this opportunity to host them today. I now invite CMD Chopra for her opening remarks, post which we will open the floor for a Q&A from the participants on this call. With that, over to you, Chopra.
Thank you very much. Good afternoon, everyone, and a very warm welcome to all of you. We have declared our Q2 and H1 2026 results today. I am happy to connect with all the investors today to discuss PFC's performance. Starting with the consolidated performance, for H1 2026, the consolidated profit after tax today is INR 16,816 crore, a 17% increase on a year-on-year basis. The group loan assets booked registered a 10% growth on a year-on-year basis and is at INR 11,43,370 crore as of 30th of September 2025. On the asset quality front, we continue to see a declining trend in the NPA level. The consolidated gross NPA level for H1 2026 is at 1.45%, and net NPA is at 0.30%. Now coming onto the standalone performance, I am happy to share that in H1 2026, our loan asset book registered a 14% growth.
With this, our loan asset book is now at INR 561,210 crore. The growth was driven by strong disbursement of around INR 86,000 crore, which is a 30% increase from the previous half-year. Out of the total H1 disbursement, about 57% were in distribution segment, and 30% were in generation segment, which includes a mix of renewable and conventional generation projects. For FY 2026, we continue to maintain our loan book growth guidance of 10%-11%. On the lending business front, I would like to share that the vision to expand our footprint, Power Finance Corporation entered into its first-ever cross-border financing deal in Bhutan with the special approval of Reserve Bank of India. It is an INR 4,800 crore deal for financing 600 MW Kolang Chu Hydro Power Project. The lending would be denominated in rupees.
The project is a strategic partnership between Bhutan government-owned Druk Green Power Corporation Limited and Tata Power Company Limited, with 60% and 40% shareholding, respectively. Now, I would like to share highlights on PFC's financial performance. I am pleased to inform that for H1 2026, we have delivered a net profit of INR 8,960 crore versus INR 8,088 crore in H1 2025. This was mainly led by 23% year-on-year growth in net interest income. The net profit for Q2 2026 is at INR 4,462 crore. Continuing with the intent to share our success with the shareholders, the board has declared an interim dividend of INR 3.65 per share. With this, the cumulative interim dividend for FY 2026 stands at INR 7.35 per share. Now coming onto our key financial indicators, the yield for H1 2026 is at 9.98%. The cost of funds is at 7.43%. The spread and NIM continue to be within our guided range at 2.55% and 3.62%, respectively.
We continue to maintain comfortable CRAR levels quarter on quarter. As of 30th September 2025, our CRAR is at 21.62%, with Tier 1 capital at 19.89%. The CRAR is well above the minimum regulatory requirement. Now moving on to the asset quality, I am happy to share that the net NPA ratio is at the lowest level in the last 10 years and is at 0.37%. Owing to the resolution of KSK Mahanadi in the last financial year, our gross NPA levels have declined by 84 basis points, from 2.71% in H1 2025 to 1.87% in H1 2026. With this, now our stage three, that is NPA book, is at INR 10,490 crore, with healthy provisioning coverage of 80%. On the resolution status, I would like to share that currently we have 22 stressed projects of INR 10,490 crore in stage three.
Out of these 22 projects, 11 projects worth INR 8,470 crore are being resolved under NCLT, of which 6 projects of INR 2,600 crore are under liquidation, on which 100% provisioning is being maintained. On the remaining 11 projects of INR 2,015 crore are being resolved outside NCLT. Now, I would like to share an update on one of the major stressed assets, which is Sinnar Thermal Park, which is an outstanding of INR 3,000 crore. It's a 1,350 MW coal-based plant. This project is being resolved under NCLT, and the resolution plan has been submitted for NCLT approval. Currently, 80% provisioning is maintained on this project. Now moving on to the borrowing side, as of 30th September 2025, our outstanding borrowing is at INR 4,74,430 crore. Out of this, around 20% of the outstanding borrowing are foreign currency borrowings.
As of 30th September 2025, outstanding foreign currency borrowing is at $10.4 billion, out of which 68% is U.S. dollar denominated, 19% JPY, and 11% in euro. We continue to maintain 95% hedging on the total foreign currency portfolio for exchange risk. Now, I would like to discuss the movement in the exchange gain loss line item in profit and loss. In H1 2026, we saw exchange loss of around INR 1,100 crore on our unhedged portfolio and also on some portion of the derivative book. The loss was primarily due to movement in euro/USD exchange rate, wherein euro has appreciated against U.S. dollar by around 8% in H1 2026. Further, in case of positive exchange rate movement, we would have the opportunity to reverse these losses as the loans have long-term maturity. Also, currently, in the last few days, we are seeing a positive euro/USD movement.
I would like to share that we remain fully focused on actively managing our forex exposure to ensure resilient financial performance. Also, on the foreign currency borrowing front, I am happy to share that in H1 2026, we executed two milestone agreements to further strengthen PFC's support for India's energy transition. We signed a JPY 60 billion loan agreement with JBIC to fund a bamboo-based bioethanol project in Assam. We also partnered with Export Finance Australia, raising $180 million for clean energy projects, marking EFA's first financing initiative in India. These collaborations highlight our commitment to diversify global funding sources and accelerate India's clean energy journey. I would like to highlight that PFC continues to be the largest renewable sector financier in India, with a renewable loan book of INR 84,680 crore as of 30th September 2025.
Now, before I close, I would like to share some updates on the recent RBI circulars. The first one is with respect to RBI's project financing directions, which were issued in June 2025. These directions are now effective from 1st of October 2025 on new project loans sanctioned on or after this date. The existing loans will continue to be guided by the earlier norms unless there is a fresh credit event or a material change in terms, in which case the new guidelines will apply. As per these directions, provisioning of 1% is required to be maintained during the construction phase and 0.40% during the operational phase after commencement of repayment of interest and principal. I would like to share that PFC, on average, is maintaining provisions of around 1.01% on its stage one and stage two assets. Accordingly, the current provisioning levels are more than the statutory requirement.
Further, for the purpose of provisioning, we follow the expected credit loss model. Therefore, any incremental provisioning required under RBI norms over and above the ECL model will be created through impairment reserve without impacting the profit and loss account. The second update relates to the draft circular released by RBI on 24th of October 2025 regarding the applicable risk weights for infrastructure exposures of NBFCs. The draft circular prescribes the methodology for assigning risk weights on the infrastructure assets for the CRAR calculation purposes. The circular is applicable from next financial year, that is 1st of April 2026, and would be applicable on the outstanding loan portfolio. Unlike the current simplified framework, this draft introduces a more detailed approach to classify projects as high-quality infrastructure assets eligible for lower risk weights.
In the current framework, 50% risk weight is applicable for eligible commissioned infrastructure projects which are in existence for over a year of commercial operation. However, in the draft framework, risk weight is now split into two slabs of 50% and 75%. The split is based on the percentage of amount repaid and other various conditions which are not there in the extant regulation. I would like to share that our loan book covers projects across generation, transmission, distribution, and other infrastructure segments. We are currently reviewing the draft circular in detail to understand its implications across different portfolios. As always, we will continue to keep our investors informed as we gain further clarity on this and we receive the final guidelines from Reserve Bank of India in this regard. With this, I would like to close my remarks. Thank you once again for joining us today.
We can now have the question asked.
Thank you very much, ma'am. We'll now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use headsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. A first question comes from the line of Shreepal Doshi from Equrius Capital. Please go ahead.
Hi ma'am, thank you for giving me the opportunity. My first question was pertaining to one of the exposures, a Kaleshwaram Irrigation Project. So I wanted to understand how have we sort of accounted for this? Have we not seen some rundown or prepayments from this exposure? And what was the total exposure?
Till now, we have not received any prepayments from the Kaleshwaram project. Our exposure is approximately INR 26,000 crore.
Okay. So ma'am, we will see prepayments or let's say some prepayment coming in Q3 from this exposure?
Right now, normal repayments are happening, but we do not have any request from the borrower for prepayment of this portfolio.
It remains in, let's say, stage two for us. Unlike our subsidiary, we will not see any prepayment request from them coming in.
Yeah, till now, not.
Got it. Got it. The second question was pertaining to, in our filing in note six, we have highlighted a fraud amounting to closer to INR 262 crore. What is this exposure, if you could just throw some light?
Yeah, I think we have, in the last quarter, clarified that it was primarily on account of Gensol exposure, which we—
Acha, okay. Okay, okay, okay. Okay. Got it. Got it. Thank you for clarifying that, ma'am. The last question was pertaining to the incremental yield for the quarter. Have we seen some moderation there, let's say, versus what our blended yield was in Q1 and what is the same in Q2? Have you seen some moderation there? If you could highlight the number that you did.
In the yield, I think we have marginally dipped, and that was due to the market forces and the competition which we are facing. It was marginally from 10.01% to 9.98%.
Okay. Okay. Got it, ma'am. Thank you so much for answering my question, ma'am. I'll come in the queue for more questions.
Thanks.
Thank you, sir.
The next question comes from the line of Shreya Shivani from Nomura. Please go ahead. Shreya ma'am, you can please proceed ahead with the question. As there are no responses from Shreya, we'll move forward to the next participant. Our next participant is Raghu from Travel Capital. Please go ahead.
Thanks for the opportunity, ma'am. My question is regarding the net transaction, whatever the forex loss which we are having. This quarter, it has been around INR 450 crore, and the previous quarter was something around INR 500 crore. Don't you feel this is just too much amount of transaction loss we are facing? For two quarters, we have faced around INR 100 crore for an exposure of INR 90,000 crore book. So one first part of the question is, do we expect some write-back if, suppose, the forex improves favorably towards us?
Second is, in the previous con call, you have mentioned saying for every rupee, the loss is something around INR 250 crore, but we see it is substantially more than that. So can you please give an idea of the present loss and the future, what is going to be for the next two quarters?
You know, because of the uncertainty which is there and the weakening of the dollar, we have seen that euro appreciating a lot. There has been euro has appreciated to approximately 8% during the half year. What we expect, and this is primarily the major amount, is towards the strengthening of the euro. I would like to mention that in case of euro, we have longer maturities, which is starting from four to five years and going up to eight to nine years in view of the multilateral loans.
In such cases, and with the strengthening of the dollar in the near future, we are expecting that these losses will be reversed gradually from quarter to quarter.
Okay. It is not that it's a book loss and then nothing can be recovered. In the next few quarters, there is a possibility we can recover something back, right?
Yeah, right. Once we have the positive movement in favor of rupee versus euro, then these will be reversed.
Sure. The second question of mine is regarding, please again, excuse me if I'm raising one of your competitors' names. We have heard from the news that IRFC has gone now into infrastructure lending, and they are lending with a spread of around 120-130 basis points. Do you foresee any competition for us in this particular segment and some pressure for us in our names?
See, there has been definitely, I agree that there has been competition on various fronts. Earlier, we had competition with the banks. Now, we have been competing with IRFC is there, HUDCO is there, and we have seen NABARD also funding for few assets in the power sector. And NaBFID is also there. There is definitely competition in the market, but I would like to state, there is enough scope for each one of us to grow. Yes, we have to see how competitive we can be, but till now, we are expecting that we will be able to maintain our spreads and margins.
Okay. Any chance for us to weaken our growth in the loan book if, suppose, there is so much opportunity? Because 10%-11%, some of it is too low. Is there any chance we can raise it to 14%-15%?
Maybe a broader long-term outlook is what I'm looking for.
I think with a lot of routine repayments also, even if we have to grow at 10%-11%, we have to disburse around INR 2 lakh crore. And to grow at a base of last year, INR 541,000 crore itself is a huge amount. We would like to be prudent in our approach in lending. That is how we have given the guidance of 10%-11% for the growth in the loan book.
For the next few years, do you foresee any improvement there, selection there in the loan growth? I'm talking about three to five years.
As your base is growing, you can very well understand that the more pressure on the disbursement and because of the repayments also which is happening.
On an average, we have repayment to the tune of INR 85,000-INR 90,000 crore every year right now, as on date, if we say. It is a huge amount which we are talking of the disbursement.
What is the nature of this repayment, ma'am? Maybe you can clarify. Why are we having so much amount of repayments?
It is a routine repayment of our loan assets.
Okay. That means we have to look for a new customer each time, or? That is my question. The same customer we are lending it, or what is the exact nature of the transaction of repayment?
See, basically, once you lend, we lend for a period of 15 - 20 years and with a staggered maturity. After the moratorium, we get some amount repaid every year. It all depends on the new loan assets which are being funded.
It could be with the same customer, or it could be with new customers also.
Okay. Sorry, one last question, ma'am. Just adding to this. Suppose we are lending up to a project for about 10 years or something. Why would we get a repayment at second year or third year? The customer just faces the interest and maybe a very marginal amount of repayment, right? Why is it so high, almost 20% of the loan book?
What we are doing is we are doing a project funding. It has to match with the revenue structure of the project. Otherwise, we will be putting our assets at risk. We have to stagger the maturities to match with the revenues of the project. That is how the repayment structure is being decided.
It's on an average of five years, but there are a few fundings which we have done 10 years back for which the repayment is continuing. There is the current funding which may start, for which the repayment might start maybe after three to four years. It's an on-an-average funding of five and a half years asset profile. Around six years is the asset profile.
Okay. Six years to that. Okay. Fair.
Thank you. Our next question comes from the line of Sarvesh Gupta. Before that, I need to make an announcement, ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference. Kindly limit the question to two questions per participant. Should you have a follow-up question, please rejoin the queue. Sarvesh Gupta from Maximal Capital. Please go ahead with the question, sir.
Yeah, good afternoon, ma'am. Thanks a lot for giving the opportunity. First question is that the return on equity that we are earning is almost like 20%. I think a few quarters back, we were growing at a much more healthier pace. Now, the pace of growth has come down to 10% or 11%. Given that situation, now we have excess equity in the balance sheet, which can ideally be utilized for higher dividend payout ratio. Have you thought on those terms? Now the growth rate is no longer going to be around 15%-16%, but more like 10%, which is half the incremental profits that we are earning.
See, the profit, what we are earning is we have been paying a dividend at the rate of around 30% of our profit after tax.
For an MBSC, I think we need profit to be added to our retained earnings for growth also, because we have to maintain a capital adequacy. You know that the mandatory capital adequacy requirement is around 15%. With the higher, as I already said, with the higher base, we have to disburse around INR 200,000,000,000, or you can say around maybe if INR 5,400,000,000,000 is there, INR 540,000,000,000 is the incremental assets we need to book. On INR 540,000,000,000, you can very well work out how much capital I require to maintain a sufficient capital adequacy. Maintaining a balance between the investors' return on their capital and as well as the growth of the company, I think we are distributing the dividend, and we expect that 10-11% growth we will be able to maintain for the years to come.
Okay. The second question, ma'am.
Basically, as both you and the subsidiary have started moving more towards renewable power funding, and there, I think the tenures are lower and the asset is getting operationalized earlier, and then the bank transfer or something is happening because of which the prepayment rate has increased. I mean, going forward, are we also putting some terms in our agreement, in our loan agreement, which can lead to sort of lower prepayments? Because as I see the numbers, the major reason why the loan book growth has come down is not because of disbursement, which are actually growing quite heavy, but because the prepayments are increasing at an even faster pace than the disbursement growth. Are there some ways to arrest the prepayment or not?
See, I agree with you that we are trying our best to arrest the prepayments in our loan book, but the terms and conditions are to be in line with the market expectation. If any of the borrowers are getting better terms and conditions from any other lender, they would like to choose that lender. Nowadays, the borrowers are very choosy. They would like to negotiate on the interest rate. They would like to negotiate on the terms and conditions. We are also doing it. We, as a borrower, if we talk to the banks, we are also negotiating in that direction. We have to see the market conditions and the expectation of our clients.
Okay, ma'am. Thank you, ma'am, and all the best.
Thank you, sir.
Our next question comes from the line of Suraj Das from Sundaram Mutual Fund. Please go ahead.
Hello. Am I audible?
Yes, sir, you are.
Yeah. Hi. Thanks, ma'am, for the opportunity. I think I joined a bit late. Sorry if this question is a bit repetitive. Ma'am, there are incremental news articles saying that there would be some cancellation on the renewable tenders, some sort of 40 GW-45 GW type. So any comments on that, ma'am? I mean, and if, I mean, this will have any impact on the growth on the renewable side or not?
Yeah. There was a news article about cancellation of some allocations made by SECI, NTPC, and NHPC, etc. That was where the PPA could not be signed with the DISCOMs.
For us, if I say precisely, we do not have any impact right now because in all our funding, we have PPAs tied up in advance. I do not think that is going to impact the present sanctions which we have in place.
Sure. Effectively, we are having very minimal, probably, exposure towards unsigned PPA. I mean, without any PPA exposure, right? Ma'am?
Huh? Tell me.
Sorry, ma'am. Go ahead. Sorry.
Generally, wherever PPA is envisaged, it is a pre-disbursement condition from PFC side to have those PPAs, and only then we start doing the disbursement.
Okay. Sure. Understood. Ma'am, last, again, on some of the news articles saying that there would be some DISCOM bailout news or something of that sort. I think last time also, 2016-2017, during UDAY, we had some accelerated prepayment.
This time, I mean, if this kind of things goes ahead, any assessment from your side, what could be your accelerated prepayment on that front?
See, a committee of group of ministers have been formed to assess the viability of the DISCOMs, and they are working on the various ways and means, and they have not yet submitted the report. Once we have some clarity on the report, only then we will be able to comment on anything.
Okay. Sure, ma'am. Would it be fair to assume that if this happens, then there would be accelerated—
I'm really sorry to interrupt you, sir. You may rejoin the queue. We have a lot of questions. Thank you, sir.
Sure, sir.
Lizzan, can you check signal on my call, please? Our next question comes from the line of Kushagra Goel. Please go ahead. Thank you.
Thank you, ma'am, for taking the question. Mostly, just sort of continuing last participant's question regarding the discom segment. Even if we set aside some bill or some government action coming in, just wanted to understand how the discom segment growth will look like for us going forward. I understand that RDSS will be sort of we will see higher disbursals and then higher repayments. Now that LPS repayments will start coming, how does this segment sort of grow? I just wanted to understand that.
See, Government of India is working for strengthening of the distribution network across the country along with the respective state governments.
I think with more and more demand coming in for power, there is a need to further strengthen, as you are already aware, that there is already the RDSS scheme going on, and some of the CapEx has been taken up by the state. We are expecting that going forward also, the CapEx work will be undertaken by the DISCOMs to address their basically strengthening of their network. The LIS, LPS schemes, I agree that they were only one-time schemes and sort of LIS, you know, that was a bailout package at the time of COVID, and then LPS was to infuse liquidity into the power sector value chain. Going forward, we will see more and more CapEx coming in in the distribution sector.
Okay. Got it. Second question was on the margins front.
Just wanted to understand, one, from the perspective that as the share of renewable projects increases, will it have sort of negative pressure on our margins? Secondly, how do our margins get impacted by repo rate changes? If you could give some more color on that.
The impact of the repo rate change directly, we may not have much, but indirectly, the market benchmark rates moved with any reduction in any repo rate cut. We have seen that in the last year when we were raising the funds through bonds, the yields have dropped from then 7.3038% to current year to 6.7%. That was the result of the repo cut in the market. Going forward also, if there is some repo rate cuts and the liquidity is improved, we may see reduction in the PFC's cost of borrowing.
Ultimately, the reduction in the cost of borrowing temporarily may improve the spread, but on an overall basis, we presume that since we will also be passing on to our borrowers, it is going to be within a range bound.
Okay. Got it, ma'am. On the renewable segment share increasing, will that affect?
I do not think that increase in the renewable segment is going to impact our margins and spreads adversely because right now, due to the competitive reason, the transmission, distribution, lending also is at a very competitive rate, and so is the other conventional generation lending.
Got it, ma'am. Thank you.
Thank you, sir. Our next question comes from the line of Rohit Deshmukh from Vishwa Investment. Please go ahead.
Hello. Am I audible?
Yes, sir, you are. Yes, sir, you are audible. Please go ahead with the question.
Hello.
Yes, Mr. Deshmukh, you are audible.
Please go ahead with the question.
Ma'am, I just want to ask that what H2 FY 2026 loan growth or disbursement targets are you building versus H1?
See, we have given for FY 2026.
Okay. With that, what's between generation, I mean, thermal, renewable, transmission, and distribution?
It's very difficult to say at this stage what is going to be the mix. Since we are sector-specific NBFC, we have a lot many sanctions in our hand, and as and when the project matures a bit and the disbursement starts, the actual position will be depending on them.
Okay. Okay. Thank you, ma'am. That's all from my side. Thank you.
Thank you, sir. Our next question comes from the line of Punit Bahlani from Macquarie. Please go ahead.
Yeah. Hi, ma'am. Thanks for taking my question.
Just firstly, on the Kaleshwaram project side, we have not received any repayments, but REC had received. How should I read through into this? Because there are various issues surrounding the project. Receiving that prepayment would have been good. An extension to that question, if we say we receive 3Q and the prepayments in 3Q and 4Q with respect to the same project, do we still maintain the growth guidance of 10%-11%? Are we factoring in that? Also, on the second bit, sorry, the Euro USD book, what percentage of our book is linked to the Euro USD book? You mentioned around 5% of the book is unhedged. What proportion of that is linked to the Euro USD book? Yeah. I'll stop here.
With respect to the Euro exposures, out of the total book, around 11% is Euro denominated loans. That is there. On the other question about the Kaleshwaram, we know that we have been receiving some news clipping that there have been some issues with the project. Under this project, we have a government guarantee as well as the budgetary support from the government, and the funding was based, apart from other things, on the security of the state government. We do not see any risk in the repayment of the loan to PFC. If, as you asked, some repayment comes, then we will see how we are going to make it up for that. We expect that we will be able to maintain around 10%-11% growth.
Got it. Now, you said 11% is Euro denominated, right?
This is entirely hedged, or how is the mechanism here? Just wanted to understand.
Only 5% is unhedged.
5% of the, okay. 5%, and the entire portion which is unhedged is Euro denominated, basically?
Yeah. Majorly, it is Euro denominated loans which is unhedged.
You can rejoin the queue for more questions. Our next question comes from the line of Shreya Shivani from Nomura. Please go ahead.
Yeah. Hi. Thank you for the opportunity. Hope I'm audible. Congratulations on a good set of numbers. I have three questions. First one is on the sanction book of one edge. We have the sanction amount on annual basis for FY 2024-2025, about INR 2.8 lakh crore, INR 3.6 lakh crore. Can you let us know what has been the trend in sanction book in the first half? My second question is on the repayments.
So the repayment rate in the generation book is quite elevated. I just wanted to know, is there some large one-off or one-two projects or names who have made some prepayments or something has happened in that book? My last question is to do with we had been discussing with you about the different formats of PPAs need to be launched in our country as more of renewable projects come into play. Is there any progress on that discussion, or have we heard anything from the Ministry of Power on that matter to solve for the crisis of PPAs not getting signed and PPAs being too long-term for renewable projects, etc.? Those are my three questions. Thank you.
Yeah. With respect to the sanctions during H1, we have sanctions to the tune of around INR 152,000 crore under various segments.
Your next question was about the prepayments which PFC has received. In the generation book particularly, yes. In the generation book, prepayments, I think it is in total, we have received INR 19,000 crore of prepayments, and out of which, under generation, this is repayment. This is my figure. I do not have the figure right now, but I think there were two major projects to the tune of, if I am correct, around INR 10,000 crore repayment was towards the generation project.
Okay. Two projects accounting for INR 10,000 crore, which has, okay.
Yeah.
Okay. Sure.
Ma'am,
on the last question,
you can rejoin the queue. I am sorry to interrupt you, but you can rejoin the queue for more questions. Thank you. Participants are requested to please go ahead with only two questions. Thank you. Our next question comes from the line of Ankit Mehta, an individual investor.
Please go ahead.
Thank you for allowing me the opportunity for the question. I hope am I audible, right?
Yeah. Yes, sir, you are.
Y eah. I'm audible. Yeah. So I have been seeing some reports, and it's about the book value per share. I can see that in spite of having earning per share around 60 or 75 as earning per share, the book value per share is going down since 2023 onward. So in 2023, the book value per share was around INR 424. In 2024, it came down to INR 406. And in 2025, now it's hovering around INR 356. What is the reason of reduction in book value per share in spite of having healthy earning per share of around INR 75? Yeah. Thank you. This is the only question I had. Thank you.
I think, if you remember correctly, we have issued twice we have issued bonus shares.
At one stage, we have issued 1:1 bonus share, and at other time, we have issued 4/1 as a bonus share. That could be the reason for reduction in the book value.
Okay. Thank you very much. Thank you.
Thank you, sir. Our next question comes from the line of Raghu from Travest Capital. Please go ahead.
Thanks for the opportunity again. Just one small suggestion because one of the previous questions has asked a question. We have return on equities around 20%, and the loan book is 10%-11%. So we have a margin of around 10%. And assume we give out 30% as dividend according to the company policy, still we are left with maybe 6%, 6.5%. So do you have any plan of something of a buyback or something like that?
Because we see our share is traded at very, very cheap valuations, almost at book value. And there is a regulation change from the central government where Maharatnas do not need any other approval other than the board approval for a buyback if it is near book value. I think 1.2 times less than book value. So is the board considering something like that?
Right now, there are no plans.
Okay. Please do consider if there is an option arises.
Okay.
Thank you.
Thank you. Ladies and gentlemen, can we limit the question to two questions per participant? If you have a follow-up question, you may rejoin the queue. Thank you. Our next question comes from the line of Nikhil Kumar Agarwal from VT Capital. Please go ahead.
Hello. Hi. Can you hear me?
Yes. Yes, we can hear you.
Right. Hi. I am very good.
Has been transferred before, but I just want to know the reason behind the INR 241 crore of incremental closing. I understand that this is over-related to them.
I am really sorry to interrupt you, Mr. Agarwal, but your voice is not very clear. It's echoing.
Hello. Is it clear now?
Yes, it's better now.
Okay. Great. My question is regarding provisions. I am sorry if this has already been clarified, but I just want to understand the reason behind the INR 241 crore of incremental provisions during the quarter. I understand that there's no new fraud. Gensol Engineering Limited was reported as fraud in October to RBI, and it was already provided in quarter four. What is this INR 241 crore related to?
Yeah. Majority on account of this is increase in the standard assets because of the new disbursements which have happened during the quarter.
Is this related to the construction projects and 1% on that?
1% is not yet implemented because these were the sanctions prior to 1 October. As per the, we have been maintaining 0.40% on the PCA. For that, since we have disbursed around INR 80,000 crore during the quarter, this is the incremental provisioning on account of that.
Understood. Ma'am, could you also comment on provision write-backs expected in the second half? If there's any delay in provision write-backs, do we expect standard provisions to continue at such a rate?
There are few assets, as we said, that for Sinnar also, we have approved the resolution plan in NCLT, and there are few other assets on which the resolution is in advanced stage. If we get some cushion in that, then there will definitely be some reversal.
Okay.
If no write-backs, then the standard provision is going to 200+ ?
It all depends on the incremental disbursement or incremental growth in the loan book.
Okay. Can you provide any number on this? Any expectation on how this should turn out?
It would be very difficult to say because how much is the normal repayment or prepayment and how much we are going to incrementally disburse. It will be an outcome of those numbers.
Got it. One last question I have, which is regarding growth, which we have reported 13.75%, but our guidance is 10%-11%. Is it because we expect more repayments in the second half, or we can expect to be ab out 12.5%-13%?
Pardon?
I am saying there was growth of 13.75% in second quarter, but our growth guidance is 10%-11% for the year.
Is this because you expect more repayments in the second half?
See, this is 14%, 13.5% is year-on-year basis. So it's not for the current financial year. For the current financial year, what we have given is the guidance for 10%-11%.
Okay. Thank you. That's it.
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Ma'am, thank you for the opportunity. Like recently, the government proposed a $12 million bailout for.
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