In Short:
State-run REC reported a 7% increase in its net profit, reaching ₹4,038 crore for Q2 FY25, supported by strong growth across its sectors. Total income rose to ₹13,706 crore. The loan book grew by 15.2%, and net credit-impaired assets decreased. The Net Worth increased by 15% to ₹72,893 crore, and a second interim dividend of ₹4 per share was declared.
REC Celebrates Impressive Growth in Q2 FY25
In a remarkable turn of events, state-run **REC** has announced a robust growth of approximately **7% year-on-year** in its consolidated net profit, reaching an impressive **₹4,038 crore** for the second quarter of FY25. This surge is attributed to strong performance across all business verticals.
Sequential Growth Highlights
On a quarter-over-quarter basis, this leading **non-banking financial company (NBFC)** saw its net profit jump by **17%**, showcasing its consistent upward trajectory.
Robust Total Income Figures
In terms of total income, REC reported around **₹13,706 crore** for Q2 FY25, a notable increase from **₹13,092 crore** in Q1 FY25 and **₹11,685 crore** in Q2 FY24. This growth underscores the resilience and adaptability of the company amidst changing market conditions.
Strong Management Driving Results
Thanks to well-strategized growth initiatives, including a reset of interest rates on loan assets and effective finance cost management, **REC** has successfully maintained its spreads and **Net Interest Margins (NIMs)**.
Performance Metrics: Earnings Per Share (EPS)
For the quarter ending on **September 30, 2024**, the company reported an Earnings Per Share (EPS) of **₹28.28** (annualized **₹56.56**), compared to **₹25.57** (annualized **₹51.14**) from the previous year. This growth reflects REC’s solid financial health.
Asset Growth Continues
The **Assets Under Management (AUM)**, essentially the loan book, has shown a steady growth of **15.2%**, now standing at a commendable **₹5.46 lakh crore**, compared to **₹4.74 lakh crore** as of September 30, 2023. This demonstrates REC’s expanding reach in the financial sector.
Decline in Net Credit-Impaired Assets
In a positive sign for risk management, the net credit-impaired assets have decreased to **0.88%** as of September 30, 2024, down from **0.96%** a year earlier, with a **Provision Coverage Ratio** of **65.12%** on NPA assets.
Strengthening Financial Position: Net Worth and Capital Adequacy
Thanks to the profit growth, **REC’s net worth** has climbed to **₹72,893 crore** as of September 30, 2024, marking a **15% year-on-year** increase from **₹63,117 crore** on the same date last year. This robust position indicates substantial opportunities for future expansion, buoyed by a healthy **Capital Adequacy Ratio (CRAR)** of **25.31%**.
Shareholder Reward: Interim Dividend Declared
Staying true to its commitment to rewarding shareholders, the **REC Board of Directors** has declared a second interim dividend of **₹4 per equity share**. This will no doubt be well-received by the company’s investors.
REC’s solid performance in Q2 FY25 certainly sets a positive tone for the future, reinforcing its position as a key player in the financial landscape.
