141% Dividends, 2.9% Yield: Maharatna REC Records 'MAHA-PROFIT' Of Rs 10,003 Crore, Highest Ever 9-Monthly

Maharatna company, REC Ltd, a leading financier to government-backed power projects, has reported 'Maha' profit in the period ending December 31, 2023, for the financial year 2023-24. REC is also among the top PSU stocks that pay high dividends and hold one of the highest yields. REC records its highest ever 9-month profit of Rs 10,003 crore.

As per the Power Ministry's data, owing to the improving asset quality, increase in lending rates and effective management of Financing Costs, REC recorded its highest ever 9M profit of Rs 10,003 crores. As a result, the annualised Earnings Per Share (EPS) for the period ended 31st December 2023 accelerated to Rs 50.65 per share as against Rs 40.79 per share as of 31st December 2022.

Further, supported by the growth in PAT, the company's net worth climbs to Rs 64,787 crore as of December 31, 2023, recording an upside of 18% YoY.

Also, REC's loan book has maintained its growth trajectory and has increased by 21% to Rs 4.97 lakh crore as against Rs 4.11 lakh crore as of 31st December 2022. Signifying improving asset quality, the Net Credit-impaired assets have reduced to 0.82% from 1.12% as of 31st December 2022 with a Provision Coverage Ratio of 70.41% on NPA assets, as of 31st December 2023.

The ministry said, indicating the ample opportunity to support future growth, that the Capital Adequacy Ratio (CRAR) of the Company stands at a comfortable 28.21% as of 31st December 2023.

Key highlights of REC's financial results on a standalone basis are:

Q3FY24 versus Q3FY23:

- Loan Sanctions: ₹ 1,32,049 crores vs. ₹ 47,712 crores, up 177%, Renewable sector constitutes 57%

- Disbursements: ₹ 46,358 crores vs. ₹ 29,639 crores, up 56%

- Interest Income on Loan Assets: ₹ 11,812 crores vs. ₹ 9,660 crores, up 22%

- Net Profit: ₹ 3,269 crores vs. ₹ 2,878 crores, up 14%

9M FY24 vs 9M FY23:

- Loan Sanctions: ₹ 3,25,941 crores vs. ₹ 1,92,496 crores, up 69%, Renewable sector constitutes 39%

- Disbursements: ₹ 1,22,089 crores vs. ₹ 59,907 crores, up 104%

- Interest Income on Loan Assets: ₹ 33,490 crores vs. ₹ 28,456 crores, up 18%

- Net Profit: ₹ 10,003 crores vs. ₹ 8,054 crores, up 24%

On Wednesday, REC shares will be in focus on stock exchanges. On Tuesday, the share price closed at Rs 434.35 apiece, down by 5.6% with a market cap of Rs 1,14,374.08 crore.

On the current market price, REC's dividend yield is at 2.9%. In 2023, the company paid dividends up to 141% amounting to Rs 14.1 per share.

REC is a 'Maharatna' Central Public Sector Enterprise under the Ministry of Power and is registered with RBI as a Non-Banking Finance Company (NBFC), and Infrastructure Financing Company (IFC). REC is financing the entire Power-Infrastructure sector comprising Generation, Transmission, Distribution, Renewable Energy and new technologies like Electric Vehicles, Battery Storage, Pumped Storage projects, Green Hydrogen and Green Ammonia projects.

Recently, REC also diversified into the Non-Power Infrastructure sector comprising Roads & Expressways, Metro Rail, Airports, IT Communication, Social and Commercial Infrastructure (Educational Institutions, Hospitals), Ports and Electro-Mechanical (E&M) works in respect of various other sectors like Steel and Refinery.

REC continues to play a key strategic role in the flagship schemes of the Government for the power sector and has been nodal agency for Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGAYA), Deen Dayal Upadhaya Gram Jyoti Yojana (DDUGJY), National Electricity Fund (NEF) Scheme which resulted in strengthening of last mile distribution system, 100% village electrification and household electrification in the country.