Power Finance Corporation (PFC), the largest non-banking finance company (NBFC) with over Rs 12.4 trillion (Rs 12.4 tn) in assets, reported a marginal three per cent rise in consolidated net income for the March quarter to Rs 85.98 billion (Rs 85.98 bn).

The quarter was weighed down by lower interest income as borrowers opted to prepay amid easing rates and foreign exchange losses from the rupee decline. For the full fiscal the company posted a consolidated net of Rs 336.25 bn, up 10 per cent on year.

Core net interest income declined 11 per cent to Rs 108.33 bn as net interest margin narrowed to 3.55 per cent in FY26. The loan book expanded seven per cent year on year, short of guidance, with standalone assets under management close to Rs 5.65 tn, and management said growth would have been nearly 11 per cent but for prepayments.

The chairman and managing director Parminder Chopra expressed concern over a Reserve Bank draft proposing a cap on single group exposure at 35 per cent from the present 50 per cent and noted that a couple of groups would exceed the proposed limit. She characterised the proposed merger with Rural Electrification Corporation as creating a financial institution of significant scale, recalling that PFC already owns 62.60 per cent in REC. The company plans to borrow Rs 1.6 tn in FY27 to fund growth, while the split between domestic and foreign sources remains undecided.

Chopra said the lower rate environment prompted prepayments and capped bottom-line growth, while rupee depreciation produced a mark-to-market loss of Rs 15 bn in FY26. A provision reversal of Rs 18 bn from resolved stressed projects and additional Rs 10 bn set aside under the expected credit loss framework supported overall profit. The company identified demand pockets in power distribution, thermal and nuclear capacity expansion and infrastructure and did not foresee stress in repayments from current geopolitical tensions.