REC (RECLTD) Q4 04/05 earnings summary

Executive summary

• FY05 delivered record lending activity and profitability: sanctions ₹16,316 crore, disbursements ₹7,885 crore, PBT before depreciation ₹1,037.80 crore and net profit ₹800.75 crore.

• Rural electrification expanded through 111 village-electrification projects and the launch of RGGVY, targeting electricity access for all rural households by 2009.

Financial highlights

• Total income rose to ₹2,302.09 crore from ₹1,996.71 crore; PBT before depreciation increased to ₹1,037.80 crore from ₹802.57 crore.

• Net profit was ₹800.75 crore vs ₹612.39 crore; management reported 31% growth YoY.

• Sanctions reached ₹16,316 crore vs ₹15,978 crore; disbursements hit a record ₹7,885 crore vs ₹6,017 crore, up 31% YoY.

• Recoveries rose to ₹6,816.64 crore from ₹5,003 crore, up 36% YoY; highest-ever dividend was ₹234.50 crore, including ₹58 crore interim dividend.

Outlook and guidance

• RGGVY is intended to provide electricity access to all rural households by 2009, with 90% central capital subsidy and franchisees supporting sustainable collections and system maintenance.

• 2005-06 priorities include separately targeted generation and other-scheme sanctions and disbursements, lower funding costs, stronger asset-liability management and expanded business flows.

• International funding from multilateral agencies and external commercial borrowings were being pursued; ECB plans remained subject to RBI approval.