Friday, September 30, 2022

REC net profit drops to Rs 1,307 cr y-o-y in Q2

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New Delhi: In Q2 of FY2019-20, REC Limited recorded a fall in its net profit at Rs 1,307 crore, as against Rs 1,765 crore during the corresponding quarter of the previous financial year. The interest income of REC on loan assets increased by 22 percent from Rs 5,999 crore in Q2 FY2018-19 to Rs 7,347 crore in Q2 FY2019-20. REC’s loan book has continued to grow on a sequential basis and has crossed Rs 3 lakh crores during Q2.

The loan book of the company has increased to Rs 3.01 lakh crores as on September 30, as against Rs 2.57 lakh crore as on September 30, 2018, reflecting a growth of 17 percent. The interest coverage ratio of the company has been at 1.
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42 with an earnings per share (EPS) of Rs 6.62 during Q2 of FY2019-20.

REC net worth stood at Rs 36,837 cr in Q2

The Net Worth of the company stands at Rs 36,837 crores in Q2, with a book value per share of Rs 187. The Capital Adequacy Ratio of the Company continues to stay healthy to support future growth for the company at 17.70 percent as on September 30, as against 16.14 percent in the corresponding quarter of the previous fiscal.

The company has provided an amount of Rs 300 crores towards provisioning during the current quarter, but it has primarily been used to cushion the provisioning coverage ratio against credit-impaired assets (NPAs). As a result, the Provision Coverage Ratio against the credit-impaired assets under the Expected Credit Loss (ECL) framework has improved to 49.40 percent as on September 30. With no incremental slippages, the asset quality has been improving steadily and the Net NPA levels improved from 3.72 percent as at June 30 to 3.47 percent as on September 30. Further, the loans to the government and public sector, forming 88 percent of the loan book, have not shown any indications of credit impairment.

CMD optimistic about power sector in time to come

Talking about the results, REC Limited’s Chairman and Managing Director (CMD) Ajeet Kumar Agarwal said, “The sentiments in the power sector has been improving. We saw a resolution sail through in respect of one of the stressed assets during the current quarter and we are hopeful of resolution of some more stressed assets in the coming quarters. With recent government initiatives like payment security mechanism for power generators, we continue to remain optimistic about the sector in the times to come.”

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