PFC, REC may be close to bottom: Credit growth, asset quality may improve

Credit growth, asset quality of companies likely to improve

Share prices of power sector financiers Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) have hit new lows this week after significantly underperforming on the S&P BSE Sensex for the last one year. 

  

The Q3 results were bad, with the companies reporting a yoy decline in net interest income (difference between interest earned and expended) and a double-digit fall in net profit. Going ahead, the pain might be much lower and, if analysts are to be believed, the situation could start looking better.  “In the last few quarters,  a large part of the stress emanated from known accounts and the