REC Ltd., a Maharatna company under India's Ministry of Power, has reported stellar financial results for the second quarter of FY24. The company's net profit surged by nearly 39% year-over-year to a record ₹3,789.90 crore, compared to ₹2,732.12 crore in the same quarter last year. This remarkable performance was primarily driven by higher interest income, improved asset quality, and effective management of finance costs.
Key Financial Highlights
1. Profit and Revenue Growth:
Consolidated net profit reached ₹3,789.90 crore, marking a 38.71% increase from Q2 FY23.
Total income rose to ₹11,701.26 crore, up from ₹9,964 crore in the same period last year.
Interest income on loan assets grew 18%, reflecting a robust lending portfolio.
2. Operational Performance:
Loan sanctions for the quarter totaled ₹1.04 trillion, with 24% allocated to renewable energy projects.
The company saw a significant jump in disbursements, reaching ₹41,598 crore—up 133% from the previous year.
REC's loan book expanded by 20% year-over-year to ₹4.74 lakh crore as of September 2023.
3. Asset Quality and Capital Position:
The company's asset quality continued to improve, with net credit-impaired assets reducing to 0.96%.
Capital Adequacy Ratio stood at a comfortable 28.53%, providing ample cushion for future growth.
Dividend Announcement
In line with its strong financial performance, REC's Board of Directors declared a second interim dividend of ₹3.50 per share for FY24. This brings the total interim dividend for the fiscal year to ₹6.50 per share. The dividend is payable on or before November 30, 2023, with a record date set for November 13, 2023.
Strategic Initiatives and Green Finance Goals
REC continues to align its business strategy with India's sustainable energy goals. It aims to achieve a green finance loan book of ₹3 trillion by 2030, supporting the country's transition to clean energy. The company has also diversified into infrastructure and logistics, strengthening its position in non-power sectors.
Conclusion
The Q2 results underscore REC Ltd.'s robust growth trajectory and strategic focus on sustainable finance. As it continues to diversify its portfolio and optimize financial performance, the company is well-positioned to capitalize on opportunities in India's evolving energy landscape.
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