REC's Profit in June Quarter up by 29.3%

New Delhi, Jul 24:  REC Limited (NSE: RECLTD, BSE: 532955) has posted a year-on-year increase of 29.3% in its net profit in the June quarter. Its profit in the quarter stood at Rs 4,451 crore.

The company also declared an interim dividend of ₹4.60 per share.

Following the announcement, the shares of REC Limited closed 1.22% or ₹4.90 higher at ₹404.90.

Key Financial Highlights (Standalone)

For Q1 FY26, REC’s standalone financial performance demonstrated robust growth. The Total Income reached ₹14,733.81 crore, marking a 13.0% year-on-year (YoY) increase from ₹13,037.06 crore in Q1 FY25. Profit Before Tax (PBT) saw a significant surge of 30.6% YoY, rising to ₹5,646.90 crore from ₹4,325.82 crore. Consequently, the Net Profit for the quarter stood at ₹4,451.02 crore, reflecting a 29.3% YoY growth compared to ₹3,442.45 crore in the prior year. Basic and Diluted Earnings Per Share (EPS) also increased by 29.3% YoY, reaching ₹16.90 from ₹13.07. Furthermore, interest income grew to ₹14,502.23 crore, up from ₹12,690.35 crore YoY. Total expenses rose moderately to ₹9,086.91 crore, contributing to improved profitability, and the company’s provisioning coverage improved, while impairment losses decreased significantly YoY. The company’s P/E Ratio (TTM) is 6.64 against an industry P/E of 21.96.

Consolidated Financials

On a consolidated basis, REC also reported strong results for Q1 FY26. Total Income increased to ₹14,823.98 crore, a 13.2% YoY growth from ₹13,092.44 crore in Q1 FY25. The consolidated Net Profit reached ₹4,465.71 crore, marking a 29.1% YoY increase from ₹3,460.19 crore. Basic and Diluted EPS mirrored this growth, standing at ₹16.96, a 29.1% increase from ₹13.14 in the previous year.

Dividend Payouts

The Board has approved an interim dividend of ₹4.60 per equity share (of ₹10 face value) for FY26. The record date for this interim dividend has been fixed as 1st August 2025, with the payout scheduled to be made on or before 21st August 2025. Additionally, REC has set 14th August 2025 as the record date for a proposed final dividend of ₹2.60 per share for FY25, which is subject to shareholder approval at the upcoming Annual General Meeting (AGM).

Other Board Approvals

Beyond the financial results and dividend, the Board approved several other key items:

• Appointment of Secretarial Auditor: M/s Agarwal S. & Associates has been appointed as the Secretarial Auditor for the period FY26–FY30, pending approval at the AGM.
• Policy Amendment: The ‘Code of Conduct for Regulating, Monitoring & Reporting of Trading by Designated Persons’ has been amended, with the updated policy now published on the company’s website.
• Fund Utilisation & Security Cover: The company confirmed no deviations in the utilisation of funds across recent Non-Convertible Debenture (NCD) issuances totalling ₹25,047.50 crore. All secured NCDs are adequately covered with a 1.51x security cover as of 30th June 2025.

Management Commentary

Jitendra Srivastava, Chairman and Managing Director, stated:

“REC continues to deliver strong financials underpinned by robust asset quality and prudent provisioning. With consistent growth in interest income and stable cost structures, we remain well-positioned to support India’s energy infrastructure ambitions.”

Strategic Outlook

REC reaffirmed its strategic focus on lending to critical sectors, including power, logistics, and infrastructure. During the quarter, no new loan transfers or acquisitions were recorded under the RBI’s Master Directions, and the company reported no defaults in servicing its debt obligations.

What Does This Mean For The Investors?

• Robust Profit Growth: REC posted a 29% YoY rise in standalone and consolidated net profits, reflecting strong operational efficiency and healthy interest income growth.
• Attractive Dividend Payout: The interim dividend of ₹4.60 per share (with a record date of August 1) adds near-term income visibility, reaffirming REC’s commitment to shareholder returns.
• Strong Asset Quality and Reduced Impairments: Lower provisioning costs and stable asset quality signal reduced credit risk—positive for long-term investors.
• EPS Growth Supports Valuation Expansion: EPS rose over 29% YoY, improving the company’s valuation outlook and making it attractive for earnings-focused portfolios.
• Stable Financial Discipline: With no deviation in fund usage and a 1.51x security cover on NCDs, REC’s disciplined financial management adds to investor confidence in its debt profile.

About the Company

REC Limited, a listed Maharatna CPSE under the Ministry of Power, provides financial assistance to state electricity boards, state governments, central and state power utilities, independent power producers, rural electric cooperatives, and private sector utilities. The company is listed on both NSE and BSE and is known for consistent dividend payouts and conservative financial management.

REF:https://nsearchives.nseindia.com/corporate/RECLTD_24072025153603_DSC_outcome_of_board_meeting20250724_15162667.pdf

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