REC Limited , a Maharatna public sector enterprise specializing in power sector financing, has reported stellar financial results for the first quarter, marking significant growth across key metrics.

Record-Breaking Performance

The company achieved its highest ever quarterly net profit of ₹4,451.00 crore, representing a robust 29% year-on-year growth. This impressive performance was underpinned by record quarterly disbursements of ₹59,508.00 crore, a substantial 36% increase from the previous year.

Strong Financial Indicators

REC's loan book expanded to ₹5.85 lakh crore, reflecting a 10% growth. The company's net interest income saw a healthy rise of 17%, reaching ₹5,247.00 crore. Notably, the net interest margin improved to 3.74% from 3.64% in the previous year, while the yield increased to 10.08%.

Asset Quality Improvement

The company made significant strides in asset quality, resolving one stressed asset (TRN Energy) worth ₹1,504.00 crore. This resolution contributed to a reduction in gross non-performing assets (NPAs) to 1.05% and net NPAs to 0.24%. Management expressed confidence in potentially becoming a net zero NPA company by the end of the financial year.

Sector-wise Sanctions and Disbursements

REC sanctioned over ₹1 lakh crore worth of projects. The distribution sector accounted for 43% of sanctions, while renewable energy projects constituted 20%. The company's focus on the power sector remains strong, with plans to maintain this strategy in the coming quarters.

Capital Adequacy and Dividend

REC maintains a comfortable capital adequacy ratio of 23.98%, well above the required 15%. The Board of Directors approved an interim dividend of ₹4.60 per share, continuing the company's tradition of rewarding shareholders.

Management Outlook

The management has set a target of 12% loan growth for the year, expressing confidence in maintaining net interest margins between 3.5% to 3.75% and spreads between 2.75% to 3%. They anticipate potential provision reversals of ₹700.00-800.00 crore during the year from the resolution of stressed assets.

Recognition for Risk Management

REC became the first Indian public sector NBFC to receive ISO 31000:2018 certification for its risk management practices, underscoring its commitment to maintaining robust financial health and operational excellence.

As REC Limited continues to play a pivotal role in India's power sector financing, its strong quarterly performance sets a positive tone for the fiscal year, reflecting the company's resilience and strategic focus in a dynamic market environment.

REC Limited , a Maharatna company in the power sector financing space, has announced significant growth in its loan portfolio and outlined optimistic projections for the future.

Loan Book Expansion

REC's total loan book reached Rs 5,84,568.00 crores as of June 30, marking a substantial 10% increase from the previous year. This growth underscores the company's strong position in the power sector financing market and its ability to capitalize on the growing demand for energy infrastructure funding.

Projected Growth

Looking ahead, REC has set an ambitious target of 12% loan growth for the upcoming year. This projection reflects the company's confidence in the continued expansion of India's power sector and its own ability to meet the financing needs of various energy projects across the country.

Potential Provision Reversals

In a positive development for the company's financial health, REC expects potential provision reversals of Rs 700.00-800.00 crores during the year. These reversals are anticipated to come from the resolution of stressed assets, which could significantly boost the company's profitability and strengthen its balance sheet.

Investor Communication

As part of its commitment to transparency and shareholder engagement, REC held an Investors Conference Call on July 31. The company has made the audio recording of this call available on its website, allowing investors and analysts to gain deeper insights into REC's performance and future strategies.

Upcoming Annual General Meeting

REC has also announced that its 56th Annual General Meeting (AGM) will be held on Wednesday, August 27, at 11:00 A.M. IST. In line with ongoing digital trends, the AGM will be conducted through Video Conferencing (VC) or Other Audio Visual Means (OAVM), ensuring widespread participation while maintaining safety protocols.

The company has advised shareholders to update their KYC details, including bank information, to ensure smooth processing of any dividend payments. Additionally, REC has opened a special window for re-lodgement of transfer requests for physical shares, which will remain open until January 6.

As REC continues to play a crucial role in financing India's power sector, these developments signal the company's robust growth trajectory and its proactive approach to addressing both opportunities and challenges in the market.