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REC Ltd Q4FY24 net profit soars 34% to Rs 4,016 cr
Photo courtesy: PIB

REC Ltd Q4FY24 net profit soars 34% to Rs 4,016 cr

| @indiablooms | 01 May 2024, 01:22 am

New Delhi: Public infrastructure finance company REC Limited reported a net profit of Rs 4,016 crores for the fourth quarter of fiscal year 2024, an increase of 34% from Rs 3,001 crores recorded in the same period of the previous fiscal year.

Revenue from operations surged to Rs 12,613 crores, marking a notable uptick of 25% from Rs 10,113 crores in the corresponding period of the previous year.

Similarly, total income soared to Rs 12,643 crores, reflecting a robust growth of 25% compared to Rs 10,124 crores in the fourth quarter of the previous fiscal year.

Net interest income, a critical indicator of the company's financial health, witnessed a significant upswing, reaching Rs 4,407 crores, up by 29% from Rs 3,409 crores in the fourth quarter of the preceding fiscal year.

The company's total comprehensive income registered a substantial growth, reaching Rs 5,183 crores, compared to Rs 3,645 crores in the fourth quarter of the previous fiscal year, representing a notable surge of 42%.

In terms of operational efficiency and financial performance indicators, REC’s yield stood at 10.03%, showcasing an increase of 38 basis points from 9.65% in the fourth quarter of the previous fiscal year. The average cost of funds experienced a slight reduction, decreasing to 7.14% from 7.17%, marking a decrease of 3 basis points.

Moreover, the spread expanded to 2.89%, up by 41 basis points from 2.48% in the fourth quarter of the previous fiscal year.

Similarly, the net interest margin improved to 3.60%, representing an increase of 31 basis points from 3.29% in the corresponding period of the previous fiscal year.

REC Limited also demonstrated enhanced profitability, with return on net worth surging to 24.06%, reflecting a significant increase of 13% from 21.34% in the fourth quarter of the preceding fiscal year.

Overall, REC Limited's robust financial performance in the fourth quarter of fiscal year 2024 underscores its resilience and strong operational capabilities amidst challenging market conditions, positioning the company for sustained growth and value creation in the future.

For the 12-month period ending in fiscal year 2024, total sanctions, a key indicator of REC Limited's financing activities, reached Rs 3,58,816 crores, marking an increase of 34% from Rs 2,68,461 crores in the previous fiscal year.

Sanctions to the renewable sector experienced an exponential growth of 533%, soaring to Rs 1,36,516 crores from Rs 21,554 crores.

The breakdown of renewable sanctions highlights significant investments across various segments, including solar, module manufacturing, large hydro, pumped storage, green hydrogen, e-mobility, wind turbine manufacturing, wind, hybrid, and others, reflecting REC Limited's commitment to renewable energy initiatives.

Disbursements surged to Rs 1,61,462 crores, up by an impressive 67% from Rs 96,846 crores in the previous fiscal year, underlining the company's robust financing activities and support to infrastructure projects.

In terms of financial performance, REC Limited reported a notable increase in revenue from operations, which reached Rs 47,146 crores, up by 20% from Rs 39,208 crores in the previous fiscal year.

Similarly, total income witnessed a corresponding growth, rising to Rs 47,214 crores, reflecting a 20% increase from Rs 39,253 crores.

Net interest income, a crucial financial metric, registered a solid growth of 18%, reaching Rs 16,167 crores compared to Rs 13,714 crores in the previous fiscal year. The net profit surged to Rs 14,019 crores, marking a significant increase of 27% from Rs 11,055 crores in the previous fiscal year.

Moreover, REC Limited reported a substantial increase in total comprehensive income, which reached Rs 15,063 crores, representing a remarkable growth of 49% from Rs 10,084 crores in the previous fiscal year.

The company also demonstrated improvements in key financial ratios, including yield, average cost of funds, spread, net interest margin, and return on net worth, further underlining its financial strength and operational efficiency.

Furthermore, REC Limited's market capitalization witnessed a significant upswing, reaching Rs 1,18,757 crore, reflecting a remarkable growth of 290% from Rs 30,400 crore in the previous fiscal year.

Overall, REC Limited's robust operational and financial performance for the 12-month period ending in fiscal year 2024 underscores its pivotal role in financing infrastructure projects, particularly in the renewable energy sector, and positions the company for continued growth and value creation in the future.

Owing to the improving asset quality and effective resolution of stressed assets, and resetting of the lending rates and effective management of finance cost, REC has been able to record its highest ever annual profit after tax of Rs 14,019 crores.

As a result, the Earnings Per Share (EPS) for the year ended 31st March 2024 accelerated by 27% to Rs 53.11 per share as against Rs 41.85 per share as at 31st March 2023.

Aided by growth in profits, the Net Worth has grown to Rs 68,783 crores as on 31st March 2024, registering an increase of 19% YoY.
The loan book has maintained its growth trajectory and has increased by 17% to Rs 5.09 lakh crores as against Rs 4.35 lakh crores as at 31st March, 2023.

Signifying improving asset quality, the net credit-impaired assets as at 31st March, 2024 have reduced to 0.86% from 1.01% as at 31st March 2023 with Provision Coverage Ratio of 68.45% on NPA assets, as at 31st March, 2024.

Indicating the ample opportunity to support the future growth, Capital Adequacy Ratio (CRAR) of the company stands at a comfortable 25.82% as at 31st March, 2024.

Continuing with the tradition to reward its shareholders, the Board of Directors of the Company has declared the final dividend of Rs 5 per equity share (on face value of Rs10/- each) and the total dividend for FY 2023-24 is Rs 16 per equity share.

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