New Delhi: REC Ltd has reaffirmed its loan book growth guidance of 11–12 percent for FY26 despite large prepayments from borrowers in the first half of the year. “We have a committed order book of nearly Rs 2.5 lakh crore,” Chairman and Managing Director Jitendra Srivastava told investors during REC’s Q2 FY26 earnings call recently. “Even if we continue our disbursement at around 9–10 percent, we are confident of getting 11–12 percent loan growth in the coming years.”
The CMD said REC had already achieved its highest-ever half-yearly disbursement of Rs 1.15 lakh crore, aided by strong demand in the power and infrastructure sectors. “Had this prepayment not been received, the growth in the loan book would have been almost around 16 percent on a year-on-year basis,” he added, referring to Rs 49,000 crore in early repayments, including Rs 11,000 crore from the Kaleshwaram Irrigation Project.
REC’s Stage-2 assets fell sharply by 52 percent in Q2 FY26 — from Rs 33,000 crore to Rs 16,000 crore — following recoveries from the Kaleshwaram project. “This we consider as a major achievement,” Srivastava said, calling the reduction a sign of improving asset quality.
REC's Director (Finance) Harsh Baweja said the company expects full resolution of its stressed assets in the current fiscal. “We expect that these main assets, that is Sinnar and Hiranmaye, will be resolved by Q4. These are at the advanced stage of resolution. We are confident that all assets, around 11 or 12 assets, will be resolved in FY26,” he told investors.
Srivastava reaffirmed REC’s long-term target to grow its loan book to Rs 10 lakh crore by 2030, with 30 percent from renewables. “We are maintaining our steady pace,” he said. “Come 2030, REC will be a Rs 10 lakh crore loan book company.”
He estimated India’s power sector would require Rs 46 lakh crore in investment over the next five years, with REC aiming to maintain a 20–25 percent market share across conventional, renewable, and distribution segments.
The CMD said REC’s infrastructure financing portfolio will now extend to the maritime and transport sectors. “We will be signing an MoU with the Ministry of Shipping for investment in the shipping and maritime sector,” Srivastava said. “Similarly, the metros, the ports, the road transport schemes, and the road transport projects… any good infrastructure project which has steady revenue streams is going to be our priority.”
Srivastava confirmed that a debt restructuring package for state distribution companies (DISCOMs) is under discussion. “Government of India is working for a debt restructuring package that is in the process of development. Consultations are at an advanced stage,” he said.
He added that an improved balance sheet for DISCOMs would be beneficial for lenders: “A better balance sheet on the distribution sector will only yield better results for us because then CapEx can really take off.”
Addressing investor queries on cost of funds, Baweja said almost all of REC’s foreign borrowings were insulated from currency risk. “As far as my hedging for this foreign borrowing portfolio is concerned, almost 99 percent is hedged, which is as per the RBI guidelines,” he said.
He added that the company has taken additional protection against rupee volatility. “Up to Rs 90, there should not be any issue. We are hedged much beyond that… we are hedged to beyond Rs 100,” he noted. Despite these measures, Baweja said REC expects to maintain its net interest margin between 3.5 percent and 3.75 percent.
REC’s implementation of the PM Surya Ghar: Muft Bijli Yojana has also picked up speed. “We are very happy that so far roughly 17 lakh households have been covered under the rooftop solar scheme,” Srivastava said. “If you look at the progress in the last six months, that alone accounts for almost 7 lakh households being added to this.”
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