Rural Electrification Corporation (REC) recorded 16.2% year-on-year (y-o-y) rise in profit for the quarter ended December 31 to Rs 1,274.6 crore on a standalone basis on the back of higher interest income and gains from foreign currency fluctuations. The state-owned company, which finances the power sector, posted a 19.5% increase in interest revenue to Rs 6,623.9 crore. Net gains from transaction exchanges went up by more than seven times y-o-y to Rs 532.4 crore.
The company’s loan book at the end of the quarter increased 20% y-o-y to Rs 2.69 lakh crore as disbursements went up 53% y-o-y to Rs 19,727 crore. The capital adequacy ratio went up by 70 basis points from the preceding quarter to 16.8%. Net NPAs at the quarter stood at 3.96%, 32 basis points lower than the level at the end of September, 2018. The company said that there are no indications of credit impairment in the loans to the government sector, which forms 88% of the loan book.
PV Ramesh, managing director, REC, said that the lender is optimistic on the power sector outlook with the revival of the investment cycle in the sector. “A healthy capital adequacy ratio of 16.84% also provides us the necessary cushion to support the business growth,” Ramesh added. The earnings per share during Q3, FY19 increased 16.2% y-o-y to Rs 6.45.
The cabinet committee on economic affairs, on December 6, 2018, had given its ‘in principle’ approval for strategic sale of the government of India’s 52.6% shareholding in the company to Power Finance Corporation. The net worth of the company was Rs 35,367 crore, as on December 31, 2018. REC is also the nodal agency for implementing the government flagship power-related schemes such as Uday, Saubhagya and Deen Dayal Upadhyay Grameen