REC India’s Q3 Net Profit Rises 3.6% YoY to ₹28.7 Billion on Improved Asset Quality
REC’s total loan disbursements to the renewable sector jumped by 79% YoY to ₹10.01 billion
Government-owned power sector lender REC India posted the highest-ever quarterly net profit at ₹28.78 billion (~$351.37 million) in the third quarter (Q3) of the financial year (FY) 2022-2023, up 3.8% year-over-year (YoY).
The company said that the improving asset quality and resolution of stressed assets primarily drove the growth in the net profit. REC said that none of its accounts has turned into non-performing assets during the April-December 2023 period.
The improving asset quality is also reflected in the declining gross and net credit-impaired asset share, which measures an entity’s creditworthiness.
Fig: Asset quality as on December 21, 2022. Source: REC
For the quarter, REC’s total loan disbursements to the renewable sector jumped by 79% YoY to ₹10.01 billion (~$122.2 million) compared with ₹5.6 billion (~$68.4 million).
For the third quarter, the company’s net interest income stood at ₹35.21 ($429.9 million), down by 12.4% YoY from ₹40.22 billion ($491.08 million). The decline was due to higher finance costs which include fees and commissions.
For the October-December quarter, the company’s loan book reached ₹4.1 trillion (~$50.2 billion), up 6% YoY.
The net profit for the first nine months (9M) of FY 2023 increased by 4% YoY to ₹80.5 billion (~$984.6 million).
Net interest income came in at ₹112.04 billion ($1.3 billion), down 5.5% YoY.
The cumulative loan disbursements to various companies was ₹599.07 (~$7.3 billion), up 23% YoY from ₹486.64 (~$5.9 billion).
The loan disbursal to renewable companies for the 9M period was up 336% YoY with ₹93.3 (~$1.1 billion) compared to ₹21.4 billion (~$262.2 million).
Last month, REC inked a memorandum of understanding with Rewa Ultra Mega Solar to commit to funding ₹10 billion (~$122.6 million) for developing renewable energy parks and projects and the associated infrastructure, including power evacuation in Madhya Pradesh.