REC Profit Rises 29% on Interest Income, Write-back

REC Ltd. reported a 29% year-on-year rise in net profit to ₹44.51 billion for the April–June quarter, driven by higher interest income and a significant write-back. Sequentially, profit was up 5.1%.

Interest income rose 14% on year to ₹145 billion, though it declined 2.9% from the previous quarter. Total income rose 13% on year to ₹147.34 billion.

Earnings were boosted by a ₹6.17 billion write-back, compared with an impairment of ₹4.73 billion a year ago and ₹7.80 billion in the March quarter.

Net interest income grew 17% on year to ₹52.47 billion, and net interest margin improved 10 basis points on year to 3.74%.

Revenue from operations increased 12.5% on year to ₹146.46 billion, supported by a 36% jump in disbursements to ₹595.08 billion. Sanctions during the quarter declined nearly 10% to ₹1 trillion.

The loan book stood at ₹5.85 trillion as of June 30, up 10% on year. REC aims to scale this to ₹10 trillion by 2030.

Asset quality improved, with the gross NPA ratio falling to 1.05%, from 1.35% in the March quarter and 2.61% a year earlier. Net NPA dropped to 0.24%, from 0.38% a quarter ago and 0.82% a year earlier. Provision coverage rose to 77.05%, from 71.73% in March and 68.48% a year ago.

Total borrowings stood at ₹5.09 trillion, with ₹3.54 trillion from domestic sources and ₹1.55 trillion via foreign borrowings. The cost of funds during the quarter was 7.12%, up 7 basis points from a year earlier.

The board approved an interim dividend of ₹4.60 per share, with August 1 as the record date.