REC reports net profit of ₹3,460 crore in Q1 FY25

State-run REC on Saturday reported a 17 per cent Yo-Y growth in its consolidated net profit at ₹3,460 crore in Q1 FY25 aided by growth in all the verticals, resetting of interest rates on loan assets and effective management of finance costs.

However, the power sector non-banking financial company’s (NBFC) net profit slipped 15 per cent on a sequential basis.

The company’s consolidated total income during Q1 FY25 stood at ₹13,092 crore compared to ₹12,707 crore in Q4 FY24 and ₹11,108 crore in Q1 FY24. The company has declared the interim dividend of ₹3.50 per equity share (on face value of ₹10 each).

The total loan sanctions rose by 24 per cent Y-o-Y to ₹1,12,791 crore in Q1 FY25, of which sanctions to the renewable energy sector are at 59 per cent Y-o-Y to ₹39,655 crore.

Loan disbursements were up 28 per cent to ₹43,652 crore in Q1 FY25, of which disbursements to renewables constituted a major component with Y-o-Y increase of 249 per cent, REC said. The Maharatna company’s Net interest income rose by 30 per cent Y-o-Y to ₹4,713 crore in the April-June quarter in the current financial year.

• Also read: NTPC reports net profit of ₹5,506 crore in Q1 FY25

The yields were higher by 17 basis points (bps) on an annual basis to 9.99 per cent in Q1 FY25. The average cost of funds declined by 18 bps Y-o-Y to 7.05 per cent. REC’s Net interest margin (NIM) rose by 36 bps Y-o-Y to 3.64 per cent in the last quarter. Its return on net worth stood at 19.51 per cent.

“Owing to growth in all the verticals, resetting of interest rates on loan assets and effective management of Finance Cost, REC is able to maintain its spreads and NIMs resulting in robust quarterly profit after tax of ₹3,442 crore. As a result, the Earnings Per Share (EPS) for the period ended June 30, 2024 accelerated by 16 per cent to ₹13.07 per share as against ₹11.24 per share as at June 30, 2023,” REC said.

The loan book has maintained its growth trajectory and has increased by 17 per cent on a sustained basis to ₹5.30 lakh crore as against Rs 4.54 lakh crore as at June 30, 2023.

The net credit-impaired assets as at June 30, 2024 have reduced to 0.82 per cent from 0.97 per cent as at June 30, 2023 with Provision Coverage Ratio of 68.48 per cent on NPA assets, as at June 30, 2024. Aided by growth in profits, the Net Worth has grown to ₹72,351 crore as on June 30, 2024, registering an increase of 19 per cent Y-o-Y.

Indicating the ample opportunity to support the future growth, the Capital Adequacy Ratio (CRAR) of the company stands at a comfortable 26.77 per cent as at June 30, 2024.