REC Limited’s Profits Soar by 16% in First Quarter of 2025
New Delhi [India], July 28: REC Limited, a company owned by the Ministry of Power, has reported a net profit of Rs 3,442 crore for the first quarter of the financial year 2025. This marks a 16% increase from the same period last year, when the company posted Rs 2,961 crore.
REC Limited is a ‘Maharatna’ company under the Ministry of Power, Government of India. It is registered with the RBI as a Non-Banking Finance Company (NBFC), Public Financial Institution (PFI), and Infrastructure Financing Company (IFC).
According to the company’s financial statement, revenue from operations grew by 19% to Rs 13,023 crore, while total income rose to Rs 13,037 crore, marking a 19% increase. Net interest income saw a growth of 30%, reaching Rs 4,713 crore. The company’s return on net worth was 19.51%, and market capitalisation saw a remarkable 219% increase, reaching Rs 1,38,348 crore.
The Board of Directors declared an interim dividend of Rs 3.50 per equity share, with a face value of Rs 10 each. The company stated, “Owing to growth in all the verticals, resetting of interest rates on loan assets and effective management of Finance Cost, REC is able to maintain its spreads and NIMs resulting in robust quarterly profit after tax of Rs 3,442 crore.”
REC’s total sanctions increased by 24% year-on-year to Rs 1,12,791 crore, with a notable 59% rise in sanctions to the renewable sector, reaching Rs 39,655 crore. Disbursements also saw a major increase of 28%, amounting to Rs 43,652 crore, with disbursements to renewables showing a year-on-year increase of 249%.
The loan book maintained its growth trajectory, increasing by 17% to Rs 5.30 lakh crore as of June 30, 2024, compared to Rs 4.54 lakh crore a year ago. The company’s net worth grew by 19% year-on-year to Rs 72,351 crore as of June 30, 2024, and the Capital Adequacy Ratio (CRAR) stood at a comfortable 26.77%. The stocks of the company were trading at Rs 623.55, up 2.56% or 15.55 points. In the last six months, REC Limited has given a return of 24.78% to the stockholders.
Doubts Revealed
REC Limited -: REC Limited is a company in India that helps provide money for power projects. It is under the Ministry of Power, which is a part of the Indian government.
Ministry of Power -: The Ministry of Power is a part of the Indian government that looks after electricity and power supply in the country.
Net profit -: Net profit is the amount of money a company makes after subtracting all its costs and expenses.
Rs 3,442 crore -: Rs 3,442 crore means 3,442 times 10 million rupees. It’s a way to show a very large amount of money in India.
FY2025 -: FY2025 stands for the financial year 2025, which is a one-year period used for accounting and financial purposes.
Revenue from operations -: Revenue from operations is the money a company makes from its main business activities, like selling products or services.
Net interest income -: Net interest income is the money a company earns from interest after paying interest on its own debts.
Market capitalisation -: Market capitalisation is the total value of a company’s shares of stock. It shows how much the company is worth in the stock market.
Total sanctions -: Total sanctions are the total amount of money that a company has agreed to lend or invest in different projects.
YoY -: YoY stands for Year over Year. It means comparing one year to the previous year to see how things have changed.
Renewable sector sanctions -: Renewable sector sanctions are the money that a company has agreed to invest in projects that use renewable energy, like solar or wind power.
Interim dividend -: An interim dividend is a payment made to shareholders before the company’s annual profits are calculated. It’s like getting a part of the profit early.
Rs 3.50 per share -: Rs 3.50 per share means that for each share of the company someone owns, they will get Rs 3.50 as a dividend.
