Powering India's Future: Power Finance Corporation's Robust Q3 FY26 Performance and Strategic Vision

Power Finance Corporation Ltd. (PFC), a Maharatna Public Sector Undertaking (PSU), has once again demonstrated its pivotal role in India's energy sector with a strong performance for the quarter and nine months ended December 31, 2025 (Q3 FY26). The company's latest investor presentation highlights significant growth in profitability, robust asset quality improvements, and strategic advancements that underscore its commitment to powering the nation's development and leading the energy transition.

On a consolidated basis, PFC reported a commendable 13% increase in Profit After Tax (PAT) for the nine-month period of FY26, reaching ₹25,028 crore, up from ₹22,157 crore in 9M FY25. This growth reflects the company's sustained operational efficiency and expanding financial muscle. The consolidated loan asset book also saw a healthy year-on-year increase of 7.67%, standing at ₹11,51,407 crore as of December 31, 2025, compared to ₹10,69,436 crore a year prior. This expansion is a testament to PFC's continued financing prowess across various segments of the power sector.

Financial Highlights: A Snapshot of Growth

The financial summary table below offers a quick glance at PFC's consolidated performance, showcasing its consistent growth trajectory.

Beyond the consolidated figures, PFC's standalone performance also exhibited strong momentum. The standalone Net Interest Income for 9M FY26 surged by 22% to ₹16,374 crore, compared to ₹13,430 crore in 9M FY25. This robust growth in NII translated into a significant increase in standalone Profit After Tax, which rose to ₹13,727 crore for 9M FY26 from ₹12,243 crore in 9M FY25. The company's net worth on a standalone basis crossed the ₹1 lakh crore mark, reaching ₹1,00,737 crore as of December 31, 2025, an increase of 14% year-on-year.

Strengthening Asset Quality and Strategic Diversification

One of the most impressive aspects of PFC's recent performance is the continuous improvement in asset quality. The net credit impaired asset ratio for 9M FY26 stood at a remarkable 0.23%, representing a decline of 50 basis points from 9M FY25 and marking the lowest in the last 10 years. The gross credit impaired asset ratio also declined significantly by 104 basis points to 1.26% for 9M FY26. This improvement is underpinned by proactive risk management and a high provisioning coverage of 84% maintained on Non-Performing Assets (Stage III Assets).

PFC's strategic initiatives are clearly geared towards diversification and leadership in emerging energy sectors. The company has solidified its position as the largest renewable financier in India, with its Renewable Energy (RE) loan book doubling over the last five years. The RE share in the generation loan book has doubled to 33% by 9M FY26, demonstrating a strong commitment to India's energy transition. PFC has supported approximately 60 GW of renewable energy capacity, which constitutes about 27% of India's non-fossil fuel-based installed capacity till FY 2025.

The Path Ahead: Merger and Global Ambitions

A significant development on PFC's strategic horizon is the proposed merger with Rural Electrification Corporation (REC). Following an announcement by the Hon'ble Minister of Finance regarding the restructuring of Public Sector NBFCs to achieve greater scale and efficiency, PFC's Board of Directors has accorded in-principle approval for this merger. This move is expected to create a more formidable entity, further consolidating its leadership in the power sector while ensuring PFC continues to operate as a 'Government Company'. The detailed merger scheme will be shared upon finalization.

Beyond domestic growth, PFC is also expanding its global footprint. The company has forayed into international lending by establishing its first power and infrastructure finance company, PIFIL (PFC IFSC Limited), in IFSC GIFT City. This initiative, coupled with the introduction of new business lines such as infrastructure and logistics financing, highlights PFC's ambition to diversify its portfolio and tap into broader growth opportunities. Furthermore, PFC's prudent financial management is evident in its hedging strategy, with 98% of its total foreign currency loan portfolio being hedged, effectively mitigating exchange rate risks.

Conclusion: A Resilient and Forward-Looking Leader

Power Finance Corporation's Q3 FY26 performance and strategic initiatives paint a picture of a resilient, growth-oriented, and forward-looking financial institution. With strong profitability, improving asset quality, a leading role in India's energy transition, and strategic moves like the proposed merger with REC and international expansion, PFC is well-positioned to continue its trajectory as a key enabler of India's infrastructure and energy development. The consistent foreign institutional shareholding further reflects strong investor confidence in PFC's strategic direction and execution capabilities.