REC's Net Profit Jumps 16% To 3,442 Cr In Q1, Declares Dividend Of Rs 3.5 Per Share

REC recorded a record-breaking first-quarter profit of Rs 3,442 crore which is a rise of 16 per cent as compared to Rs 2,961 crore in Q1 FY24, marking the highest ever for the company.

The company believes that this growth is attributed to the effective management of finance costs and the resetting of interest rates on loan assets.

REC also declared an interim dividend of Rs 3.5 per share, reflecting the company’s commitment to rewarding its shareholders.

The total sanctions for Q1 FY25 reached Rs 1,12,791 crore, up by 24 per cent compared to Rs 90,797 crore in Q1 FY24. Sanctions to the renewable sector were particularly robust, increasing by 59 per cent to Rs 39,655 crore from Rs 24,985 crore.

The company disbursed Rs 43,652 crore in the first quarter, an increase of 28 per cent from Rs 34,133 crore in the same period last year. Disbursements to the renewable sector constituted a major component, with a year-over-year increase of 249 per cent.

REC's revenue from operations rose to Rs 13,023 crore, up 19 per cent from Rs 10,976 crore in the previous year.

Earnings Per Share (EPS) for the period ended 30 June 2024, increased by 16 per cent to Rs 13.07 per share compared to Rs 11.24 per share as of 30 June 2023.

Financial metrics also improved as REC reported a net interest income of Rs 4,713 crore, a 30 per cent increase from Rs 3,612 crore in the previous year. The company's yield rose to 9.99 per cent, with a spread of 2.94 per cent, up by 35 basis points (bps). The net interest margin also increased to 3.64 per cent, up by 36 bps from 3.28 per cent in Q1 FY24.

REC's market capitalisation surged by an impressive 219 per cent to Rs 1,38,348 crore from Rs 43,356 crore, underscoring its strong financial position. The company's loan book maintained its growth trajectory, expanding by 17 per cent to Rs 5.30 lakh crore from Rs 4.54 lakh crore as of 30 June 2023.

The net credit-impaired assets reduced to 0.82 per cent from 0.97 per cent as of 30 June 2023, with a Provision Coverage Ratio of 68.48 per cent on NPA assets. Aided by strong profit growth, net worth also increased by 19 per cent year-over-year, reaching Rs 72,351 crore.

The Capital Adequacy Ratio (CRAR) stands at a 26.77 per cent, indicating ample opportunity to support future growth.

Sangeet Kumar Sanu

BW Reporters Sangeet Kumar Sanu as a Correspondent reports on Defence, Space and Foreign Affairs for BW since 2022.