REC to announce Q4 results today; NII likely to rise 22.3% YoY

REC Q4 Results Preview: REC, a 'Maharatna' company under the administrative control of the Ministry of Power, will announce its financial results for the quarter ended March 31, 2024 (Q4 FY24) on April 30. The company is registered with the RBI as a non-banking finance company (NBFC), a public financial institution (PFI), and an infrastructure financing company (IFC).

Zee Business Research analysts expect the PSU to report a 22.3 per cent rise in its net interest income (NII) on a standalone basis to Rs 4,280 crore against Rs 3,497.2 crore registered in the year-ago quarter. Profit is expected to increase by 13.2 per cent to Rs 3,400 crore from Rs 3,000.9 crore logged in the March 2023 quarter.

REC is expected to report loan growth of 19 to 20 per cent. Both gross non-performing assets (GNPA) and net non-performing assets (NNPA) are estimated to be flat at 2.78 per cent and 0.82 per cent, respectively, on a sequential basis. 

Due to increasing expenses, NIM, or net interest margin, is expected to slip to 3.5 per cent from 3.61 per cent. The research team notes that NPA resolution will lead to a reduction in GNPA.

About REC

REC was incorporated in 1969, against the backdrop of severe drought and famine in the country, to energise agricultural pump sets for irrigation purposes, thereby reducing the dependency of agriculture on monsoons. Over the years, REC has evolved and expanded its financing mandate to cover the entire power infrastructure sector. It has recently diversified into the non-power infrastructure sector, comprising roads and motorways, metro rail, airports, and IT communication, among others. 

REC provides long-term loans and other financing products to state, centre, and private companies for the creation of infrastructure assets in the country.

REC loan book 

As per the company's website, as of December 31, 2023, REC had a loan book of Rs 4.97 lakh crore with 90 per cent loans to the state sector. The net worth of the company stood at Rs 64,787 crore. As per the Public Enterprises Survey FY2021-22, REC is ranked 8th in terms of net profit among all 188 profit-making CPSEs.

REC share price performance

Shares of the company have given 266 per cent returns in the past 12 months. In comparison, the S&P BSE PSU index has risen 97 per cent while the Nifty50 has surged over 25 per cent.