India's power financiers rise on bets of asset quality improvement, write-backs

Power Finance

06/03/2024 08:43

** Shares of Power Finance Corporation  PWFC.NS  and REC
 RECM.NS  gain 2% and 1%, respectively, on hopes of improvement
in asset quality
    ** "We expect at least a 60-70 basis-point sequential
improvement in gross NPA in March quarter," says CLSA
    ** Brokerage sees write-backs for both power financiers on
likely resolution of thermal power generator Lanco Amarkantak
Power
    ** CLSA says media reports suggest resolution proposal is
worth 41 bln rupees, implying 30% recovery for creditors
    ** PWFC and RECM's exposure to Lanco was 23.8 bln rupees and
22 bln rupees, respectively - CLSA 
    ** Reiterates "buy" on PWFC and RECM; prefers PWFC between
the two due to sharp valuation discount of 33% over RECM
    ** PWFC, RECM up 11% and 14%, respectively, YTD  - LSEG data

 (Reporting by Bharath Rajeswaran in Bengaluru)
 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))