REC (RECLTD) Q1 24/25 earnings summary

Executive summary

• Sanctions grew 24% year-over-year to INR 112,791 crore in Q1 FY25, with disbursements up 28% to INR 43,652 crore and assets under management (AUM) rising 17% to INR 529,739 crore.

• Net profit increased 16% year-over-year to INR 3,442 crore, with net interest income up 30% and total income up 19% to INR 13,037 crore.

• Asset quality improved, with net NPA at 0.82% versus 0.97% a year ago and no new NPAs reported in the last 10 quarters.

• Interim dividend of ₹3.50 per share declared for Q1 FY25, payable by August 23, 2024.

• Board and Audit Committee reviewed and approved unaudited financial results for Q1 FY25, with limited review by statutory auditors.

Financial highlights

• Borrowings outstanding increased 15% year-over-year to INR 458,794 crore, with 30% in foreign currency.

• Yield on interest-bearing loan assets rose to 9.99% from 9.82% year-over-year; cost of funds reduced to 7.05% from 7.23%.

• Net interest margin improved to 3.64% from 3.28% year-over-year.

• Standalone and consolidated net worth rose to ₹72,351 crore and ₹72,936 crore, respectively.

• Standalone and consolidated net profit margins were 26.41% and 26.43%, respectively.

Outlook and guidance

• Management targets 15%-20% AUM growth, aiming to double AUM to INR 1,000,000 crore by FY29.

• Disbursements for FY25 expected to exceed INR 190,000 crore, possibly reaching INR 200,000 crore, with 40% from transmission/distribution and 20% from renewables.

• Renewable energy portfolio projected to rise from 8% to 30% of AUM by 2030.

• No material deviation in utilization of funds raised; all proceeds from recent NCD issues fully utilized as per objectives.

• No defaults in debt servicing; all obligations met on time.