Thursday, November 10, 2011

Bend in the Back - dimal performance of PFC stock

The Power Finance Corporation, also termed as the 'financial backbone of the Indian Power Sector' has come up with a weak Q2 performance for FY12. Net Profit is down by about 40%, from Rs. 41933.70 lacs for the quarter ending on 30-SEP-2011, as against Rs. 70083.74 lacs for the same quarter ending in last year.

The company has reported that this sudden drop is on account of forex losses, given the company did not have enough time to take action with a rapidly sliding rupee. While the same can be a one-off incident, reduction in share price has to be seen more closely. The second quarter results of most of the power sector scrips are not heartening. To top-up the gloom are the constant feed of news on mounting losses of the State Distribution Utilities. In such a scenario it is evident that if the State Discoms are not able to turn the coluor of their balance sheet, the whole sector and participant companies could go for a toss.

We need some quick fix solutions to the financial problems of the state companies.

No comments:

Post a Comment