REC (RECLTD) Q4 07/08 earnings summary

Executive summary

• FY08 set records across sanctions, disbursements, recoveries, operating income and profits; PAT rose 30% YoY to Rs 860.15 crore.

• February 2008 IPO raised Rs 819.63 crore in fresh equity; the offer was subscribed about 27 times and shares listed on NSE and BSE in March.

• Navratna status was conferred on 5 May 2008, granting greater operational and investment autonomy.

Financial highlights

• Operating income increased 27% YoY to Rs 3,378.21 crore from Rs 2,651.70 crore.

• PBT rose 30% YoY to Rs 1,312.42 crore; PAT increased 30% to Rs 860.15 crore, versus Rs 660.26 crore.

• Gross income was Rs 3,537.66 crore; interest and other charges were Rs 2,062.40 crore, and tax provision was Rs 452.28 crore.

• Loan sanctions rose 63% to Rs 46,770 crore, disbursements 19% to Rs 16,304 crore, and recoveries 37% to Rs 9,042 crore.

• Recommended dividend was 30%, or Rs 3 per Rs 10 share; total payout Rs 257.59 crore versus Rs 177 crore in FY07.

Outlook and guidance

• FY11th Plan power-sector funding need was estimated above Rs 10,316 billion; the lending ambition was about Rs 1,000 billion over the plan period.

• FY09 borrowing of Rs 16,000 crore was expected to exceed the existing Rs 45,000 crore limit; shareholder approval was sought to raise it to Rs 60,000 crore.

• FY09 through 30 June, generation loans sanctioned were Rs 6,560 crore and disbursements about Rs 978 crore; T&D sanctions were Rs 5,182.52 crore and disbursements Rs 1,168.55 crore.

• ERP implementation was at an advanced stage and expected to become operational in FY09.

• Sector outlook was described as robust, with sustained investment needs in generation and transmission/distribution to support long-term economic growth.