REC Q1 net profit jump 23% to Rs2,247 crore
16 August 2021
State-run Rural Electrification Corporation Ltd (REC) has reported a 23 per cent year-on-year increase in its net profit at Rs2,247 crore for fiscal first quarter ended 30 June 2021, mainly on higher revenues.
REC had reported consolidated net profit of Rs1,845.30 crore in the quarter ended on 30 June 2020, the company stated in a BSE filing.
Total income during April-June 2021 quarter rose 18 per cent to Rs9,639.98 crore, from Rs8,136.37 crore in the year-ago quarter.
The spike in revenues follow government leveraging power sector lenders such as REC and Power Finance Corporation (PFC) to instil financial discipline at state-owned electricity distribution companies (discoms). PFC bought a controlling stake in the REC in 2019, making it a group company.
REC’s loan book stood at Rs3,79,000 crore at the end of the first quarter.
“Continuing with the tradition to reward its shareholders, the board of directors of the company has also declared final dividend of Rs1.71 per share of Rs10 each, in addition to Rs11 per share already paid as interim dividend for the financial year 2020-21 and the record date for such final dividend has been fixed at 17 September 2021," the company stated in a release.
“Additionally, the company has also declared an interim dividend of Rs2 per share of Rs10 each for the financial year 2021-22 and the record date for such interim dividend has been fixed at 17 August 2021," the statement added.
This comes in the backdrop of the Cabinet Committee on Economic Affairs last month approving a Rs3,03,000-crore power discom reform scheme, wherein the centre’ share will be Rs97,631 crore. The funds will be released to discoms subject to their meeting reform-related milestones, with REC and PFC nominated as nodal agencies for the scheme’s implementation.
“With a net worth of Rs45,690 crore as of 30 June 2021, the company’s book value per share is Rs231," the statement added.
PFC and REC have reduced lending rates by 2 percentage points for the current financial year. The losses of state-owned discoms have also dropped sharply by more than a third to Rs38,000 crore in 2019-20 from Rs61,360 crore in FY19.
The lender’s board of directors in its meeting held on Thursday also approved an interim dividend at the rate of Rs 2 per share for 2021-22, and a final dividend Rs1.71 per share for 2020-21, subject to approval in the ensuing annual general meeting (AGM).