Q1: REC opens FY25 with 17% growth in net profit, declares interim dividend of Rs 3.50

New Delhi: Buoyed by a healthy growth of 16.27 percent in its standalone net profit in Q1 of FY2024-25 on year-on-year basis, state-run REC Limited declared an interim dividend of Rs 3.50/share in the first quarter of the ongoing financial year. REC posted a standalone net profit of Rs 3,442.45 crore in the April-June quarter of the current fiscal, up from Rs 2,960.73 crore recorded in the corresponding quarter of the previous fiscal. On quarter-on-quarter basis, REC’s standalone net profit dropped 14.3 percent even though both revenue from operations and total income for Q1 FY25 were higher in comparison to the previous quarter primarily due to higher impairment on financial instruments.

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REC’s consolidated net profit for Q1 was 17 percent higher on year-on-year basis at Rs 4,349.23 crore, up from Rs 3,721.16 crore recorded in the corresponding quarter of the previous fiscal. On quarter-on-quarter basis, the net profit was down 17 percent.

REC’s loan disbursements to RE projects up 249% y-o-y

The total sanctions by REC in Q1 stood at Rs 1,12,791 crore versus Rs 90,797 crore in the year-ago period, clocking a growth of 24 percent. Sanctions to the renewable energy sector went up by 59 percent at Rs 39,655 crore in Q1, up from Rs 24,985 crore recorded in the June quarter of the previous fiscal. REC disbursed Rs 43,652 crore in Q1 as opposed to Rs 34,133 crore, recording a growth of 28 percent y-o-y. Disbursements to renewables constituted major component with an year-on-year increase of 249 percent.

Net interest income at Rs 4,713 crore was up 30 percent in Q1 in comparison to Rs 3,612 crore recorded in the year-ago quarter. Yield improved 17 bps to 9.99 percent in Q1 FY25 as opposed to 9.82 percent in the year-ago period. On the other hand, average cost of funds reduced 18 bps from 7.23 percent in Q1 FY24 to 7.05 percent in Q1 FY25.

REC’s market cap grows 219%

REC’s market capitalisation has grown 219 percent, up from Rs 43,356 crore to Rs 1,38,348 crore, said Chairman and Managing Director (CMD) Vivek Kumar Dewangan. “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 Rs 3,442 crore. As a result, the Earnings Per Share (EPS) for the period ended 30th June 2024 accelerated by 16 percent to Rs 13.07 per share as against Rs 11.24 per share as at 30th June 2023,” said a statement.

The loan book has maintained its growth trajectory and has increased by 17 percent on sustained basis to Rs 5.30 lakh crore as against Rs 4.54 lakh crore as on 30th June 2023. The net credit-impaired assets as at 30th June 2024 have reduced to 0.82 percent from 0.97 percent as at 30th June 2023 with Provision Coverage Ratio of 68.48 percent on NPA assets, as on June 30, 2024. Aided by growth in profits, REC’s net worth has grown to Rs 72,351 crores, registering an increase of 19 percent y-o-y.

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