Delhi, 26th October 2024 – In a landmark announcement today, the Board of Directors of REC Limited has approved the financial results for the half-year ending September 30, 2024, revealing a stellar performance that underscores the company’s strong position in the market. This report reflects not just growth but a significant milestone, marked by the declaration of the 2nd interim dividend of ₹4.00 per equity share. This comes alongside the revelation of the highest-ever half-yearly profit of ₹7,448 crore.
Operational and Financial Highlights: A Year of Remarkable Growth
Q2 FY25 vs. Q2 FY24 (Standalone)
REC Limited’s performance for the second quarter of FY25 showcased impressive metrics, indicating a 17% increase in revenue from operations, climbing to ₹13,571 crore from ₹11,576 crore. The financial results for Q2 reveal a robust growth trajectory that signals strong operational efficacy and market positioning:
- Total Income: Rose to ₹13,596 crore from ₹11,590 crore, also marking a 17% increase.
- Net Interest Income: Surged by 22% to reach ₹5,012 crore, compared to ₹4,091 crore in the previous year.
- Disbursements: Increased significantly by 14%, amounting to ₹47,303 crore, up from ₹41,598 crore.
- Renewable Sector Disbursements: Showcased a remarkable 38% increase, reaching ₹5,946 crore from ₹4,309 crore.
H1 FY25 vs. H1 FY24 (Standalone)
The financial results for the first half of FY25 further substantiate REC Limited’s strong growth:
- Revenue from Operations: Increased by 18% to ₹26,594 crore, up from ₹22,552 crore.
- Total Income: Reached ₹26,633 crore, compared to ₹22,571 crore, reflecting an 18% growth.
- Net Interest Income: Rose significantly by 25% to ₹9,723 crore from ₹7,763 crore.
- Disbursements: Total disbursements reached ₹90,955 crore, a 20% increase from the previous year’s ₹75,731 crore.
- Renewable Sector Disbursements: Witnessed an extraordinary 93% year-on-year increase, amounting to ₹11,297 crore compared to ₹5,843 crore.
Profit and Earnings Per Share (EPS)
The impressive financial results translated into a net profit of ₹7,448 crore, an 11% increase from ₹6,734 crore in the previous fiscal year. The Earnings Per Share (EPS) accelerated to ₹28.28 (annualized at ₹56.56), compared to ₹25.57 (annualized at ₹51.14) at the end of September 2023, signaling robust profitability and growth in shareholder value.
Loan Book Growth: Sustaining Momentum
The Asset Under Management (AUM) has maintained its growth trajectory, recording an increase of 15.2% to ₹5.46 lakh crore, up from ₹4.74 lakh crore as of September 30, 2023. This growth in the loan book is a testament to REC Limited’s effective business strategies and market demand for its financing solutions.
Credit Quality Improvement
The company has successfully reduced its net credit-impaired assets to 0.88% from 0.96%, indicating effective asset quality management. The Provision Coverage Ratio stands at an impressive 65.12% on non-performing assets (NPA) as of September 30, 2024.
Strengthening the Balance Sheet: Net Worth and Capital Adequacy
The company’s net worth has seen substantial growth, reaching ₹72,893 crores as of September 30, 2024, up from ₹63,117 crore on September 30, 2023, marking a 15% year-on-year increase. The Capital Adequacy Ratio (CRAR) remains robust at 25.31%, highlighting REC’s ability to support future growth and lending activities effectively.
Dividend Declaration: Rewarding Shareholders
In alignment with its commitment to enhancing shareholder value, the REC Board has declared a 2nd interim dividend of ₹4.00 per equity share, based on a face value of ₹10 each. This decision reflects REC Limited’s strong financial performance and its tradition of rewarding shareholders consistently.
Market Positioning: Navigating the Future
With a market capitalization soaring to ₹1,46,011 crore, a remarkable 93% increase from ₹75,678 crore, REC Limited is positioned as a formidable player in the financial services landscape. The company’s strategic focus on renewable energy financing aligns with global trends towards sustainability, ensuring a steady stream of growth opportunities.
Outlook and Future Growth
The company’s sustained growth across all verticals, coupled with effective management of interest rates on loan assets and financial costs, positions it favorably for future success. The increase in disbursements, especially in the renewable sector, indicates a strategic pivot towards sustainable energy solutions, an area poised for exponential growth.
As REC Limited continues to leverage its strong financial foundation and capitalize on emerging market opportunities, stakeholders can look forward to continued positive performance, innovation in service offerings, and an unwavering commitment to supporting India’s infrastructure and energy sectors.
