REC Q2 net profit of Rs. 1,307 crore, loan book crosses 3 lakh crores

By Sarkaritel November 5, 2019 19:54

New Delhi, 5^th November 2019: The Board of Directors of REC Limited (formerly Rural Electrification Corporation Limited) approved the unaudited standalone and consolidated financial results for Q2 and H1 FY20 today.

During the current quarter ended 30^th September 2019, the Company has registered a Net Profit of Rs. 1,307 crore, as against Rs. 1,765 crore during the quarter ended 30^th September 2018. The interest income on loan assets has increased by 22% from Rs. 5,999 crore in Q2 FY19 to Rs. 7,347 crore in Q2 FY20. The loan book has continued to grow on sequential basis and has crossed Rs. 3 lakh crores during the current quarter. The loan book of the Company has increased to Rs. 3.01 lakh crores as at 30^th September 2019, as against Rs. 2.57 lakh crore as at 30^th September 2018, reflecting a growth of 17%. The interest coverage ratio of the Company has been at 1.42 with an Earnings per Share (EPS) of Rs. 6.62 during Q2 FY20.

The Net Worth of the Company stands at Rs. 36,837 crores as on 30^th September 2019, 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% as at 30^th Sept. 2019, as against 16.14% as at 30^th Sept. 2018.

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% as at 30^th September 2019.

With no incremental slippages, the asset quality has been improving steadily and the Net NPA levels improved from 3.72% as at 30^th June 2019 to 3.47% as at 30^th September 2019. Further, the loans to Govt. and public sector, forming 88% of the loan book, have not shown any indications of credit impairment.

Talking about the results, Ajeet Kumar Agarwal, Chairman and Managing Director, 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 Govt. initiatives like payment security mechanism for power generators, we continue to remain optimistic about the sector in the times to come.”