* Power Finance Corporation (PFC) has emerged as a leading power finance company. Being a ‘Nav Ratna’ company, it enjoys higher levels of operational freedom and autonomy in decision-making.

* PFC is one of the best plays on power financing in India, with a projected funding requirement of Rs 10 lakh crore in the eleventh five-year plan. Taking advantage of its huge funding potential in power finance, PFC has managed to almost double its market share to 21per cent from the ninth to the tenth five-year plan.

* PFC’s asset quality has remained healthy over a long period of time. Despite significant exposure to State owned PSUs, which have been making cash losses, PFC has been able to receive timely interest payments from them. Here an escrow payment mechanism is formed in almost all loans given to SPSUs, where in case of a default; PFC reserves the right to direct the borrower’s banker to remit the amount to PFC for clearing the dues.

As far as the financial performance of the company is concerned, it has been strong in past. PFC’s management has given a positive guidance of 35 per cent in topline and 26 per cent in bottomline for FY08. On the basis of above guidance, we expect the company to post a profit of Rs 1250 crore as compared to Rs 983 crore in FY07. Based on that guidance, the EPS is Rs 10.83.